GUAM BUSINESSES WRING HANDS OVER POSSIBLE WAGE HIKE

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By Mark-Alexander Pieper

HAGÅTÑA, Guam (Pacific Daily News, Jan. 11) - Regional leaders and businessmen are examining the possible impact an increase in the federal minimum wage would have on the economies of Guam and the Commonwealth of the Northern Mariana Islands.

But for minimum wage earners and the Democratic Congressman who authored the bill, the increase is long overdue. It's been 10 years since the last increase to the minimum wage.

House Education and Labor Committee Chairman George Miller, D-Calif., introduced the Fair Minimum Wage Act of 2007, which would raise the federal minimum from US$5.15 an hour to US$7.25 over a two-year period.

The bill must first pass the House and then its Senate version must do the same before final legislation is sent to President Bush. Congressional support for the legislation is overwhelming.

House Speaker Nancy Pelosi has said that the measure would be passed within the first 100 hours of the now Democratic-controlled House. President Bush has said he would approve the increase. The House was expected to vote on the bill late last night, Guam time.

The proposed federal legislation for the first time would cover the CNMI, which has been exempt from national labor laws as a result of its commonwealth status. Miller included the CNMI in the bill.

CNMI Lieutenant Governor Timothy P. Villagomez is expected to lead a CNMI delegation to Washington, D.C., next month to present its case before Congress to "fend off the imposition of minimum wage," CNMI House Speaker Oscar M. Babauta told the Saipan Tribune.

Governor's spokesman Shawn Gumataotao said Gov. Felix Camacho and administration officials are looking at the proposed legislation and the effects that an increased minimum wage would have on Guam.

Guam Chamber of Commerce Chairman Mike Benito said businesses already are bracing themselves to implement a measure signed into law locally that increases the minimum wage on Guam to US$5.75 a hour beginning July.

"The minimum wage increase by our Legislature was going to be pretty big, but the federal one --that's going to be huge," said Benito, who also is general manager of Pay-Less Supermarkets.

On Guam, Benito said the federally proposed wage increase not only will affect wages, but will drive up the overall cost of doing business. He said that the federally proposed increase represents a 25 percent jump in labor costs, which will lead to increases in freight and fuel costs.

"Because of the inflationary nature of things, you're going to see a corresponding jump on everything, and the additional price increases are endless these days," he said.

He said there is no new money yet in Guam's economy that would offset the impact of the wage increase to businesses.

"With the military buildup there's going to be a lot of money going around this island but that's not going to happen yet," Benito said. "So these next two years will be very difficult for this island -- our government is not flushed with cash, actually, we don't have enough because we're borrowing and this will make it even harder."

Benito said companies may need to cut back employees' benefits or eliminate full-time positions and hire part-time workers who don't get benefits.

"This is just going to make it more difficult on business on Guam, especially a lot of the smaller businesses struggling as is," Benito said.

"Even with more buying power for people, prices are going to go up and I'd hate to see the benefits that people were meant to receive from this increase be minimized or made irrelevant by price increases."

By including the CNMI, congressional Democrats say they hope to put an end to abusive sweatshops, especially in the garment industry.

Miller has told of harrowing accounts of meeting veiled or masked indentured servants and wage slaves in Mariana Islands churches, who told their stories under the threat of grievous retaliation from their employers, according to a Washington Post report. But Miller's efforts to bring the islands under U.S. labor laws were thwarted repeatedly by Jack Abramoff, the once-powerful Republican lobbyist now in federal prison, and his allies.

Abramoff spent millions of dollars from the CNMI and its business interests to curry favor with Republicans and align support with conservative interest groups against efforts to intervene in the Northern Marianas' economy.

"I have been trying to fix the deplorable situation in the Northern Marianas since I first held hearings on the issue in 1992, 15 years ago," Miller said in the report. "But under Republican control, the House never even held a hearing."

In the CNMI, the bill calls for a US$1.50 increase to the current rate of US$3.05 per hour during the first year, and 50 cents after every six months until the federal level is achieved.

Babauta said the CNMI Legislature has agreed "reluctantly" to accept Miller's bill.

"Regardless (of) whether we support it or not, Congress seems determined to pass it," he said. "What we are fairly asking Congress is that the CNMI be allowed to have a provision to create a federal wage review board to determine the incremental increases."

The Saipan Chamber of Commerce has expressed frustration over Congress' seeming lack of initiative to consult with the CNMI on the issue, the Saipan Tribune reported.

"The problem is U.S. Congress believes that they have the best solutions for us," said Chamber President Juan "Pan" Guerrero.

Guerrero said the CNMI business community agrees with the minimum wage hike increase but not on the terms as proposed by Congress.

"Bring in an economist to look at our economic situation," Guerrero told the Saipan Tribune. Guerrero, whose family runs various businesses in the CNMI, said that the Congress' plan for the CNMI would "kill" the commonwealth.

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