CNMI BUSINESSES WARY OF FEDERAL WAGE HIKE BILL

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By Gemma Q. Casas

SAIPAN, CNMI (Mariana Variety, Dec. 5) - Congressional Democrats are poised to include the Commonwealth of the Northern Mariana Islands in a wage hike bill that they vow to pass within the first 100 hours of the incoming 110th Congress.

Charles P. Reyes Jr., the governor’s press secretary, said if the Commonwealth of the Northern Mariana Islands’ decade-old US$3.05 an hour minimum wage is raised to the federal level of US$5.15 an hour, more local businesses may shut down and the cash-strapped government’s revenue would further decline.

"If the minimum wage is raised rather quickly and to such an extent that businesses can no longer afford to operate profitably, then we might expect more business closures, more unemployment and lower tax revenues for our local government," Reyes told Variety.

The Associated Press reported that incoming Speaker Nancy Pelosi wants to fast-track efforts to increase the federal minimum wage.

The wage hike measure is likely to call for a phased-in increase of US$2.10 as proposed by Representative George Miller, D-Ca., the incoming chairman of the House Education and Workforce Committee and one of the foremost critics of the Commonwealth of the Northern Mariana Islands’ labor and immigration policies.

Miller wants to include the Northern Marianas in the national wage hike measure.

According to Washington Representative Pete A. Tenorio the draft proposal calls for a 50-cent increase in the Commonwealth of the Northern Mariana Islands minimum wage within two months after the enactment of the measure.

Richard Waldo, an economist and the outgoing finance director of the Public School System, said US$3.05 is definitely not a living wage.

Currently, US$3.05 can buy just a gallon of gas, a few pounds of vegetables and imported meat products.

Some minimum wage earners who requested anonymity said, "it’s very difficult" to get by with the current wage level.

"In 1996, I could buy a pack of cigarettes for US$1.25, now it costs me US$4. I could get by on the US$3.05 in 1996 because it had more value," an alien worker said.

He said even if foreign workers are provided with free housing and transportation to and from their worksite, the islands’ current minimum wage is still not good enough.

Waldo said the 50-cent increase is not really that much but it would definitely impact employers, particularly in light of the islands’ worsening economic crisis.

He said lowly paid workers are usually frugal in their spending and don’t contribute much to Commonwealth of the Northern Mariana Islands economic activity.

Increasing their wages would give them more purchasing power, Waldo said.

"People making US$6,000 to US$8,000 a year -- they don’t really boost the economy. They live in a savings mode and leave the island eventually," he said.

Lobbying

Reyes said the Commonwealth of the Northern Mariana Islands government would argue in Washington, D.C. that federalizing the islands’ minimum wage is not in its best interests.

The Strategic Economic Development Council, a group of local businesspersons, said it is considering hiring an economist and a lobbyist.

But Reyes said no lobbyist or economist has been hired due to funding concerns.

"No lobbyist has been hired so far, but among people in the private sector, as represented by SEDC, there seems to be a consensus that any change in minimum wage policy should be justified by an objective study based on prevailing economic realities," said Reyes.

"The private sector generally supports the hiring of economists and other related experts to address the issue. It is not clear that the private sector is willing to pay for the hiring of these experts. Some may prefer that the government shoulder the cost and this would present some challenge to our financially ailing government," he added.

The Commonwealth of the Northern Mariana Islands previously retained the now disgraced Washington lobbyist Jack Abramoff to block, in the Republican Congress, the extension of federal minimum wage and immigration laws to the islands.

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