CNMI Congressman: Delay In Minimum Wage Hike Unnecessary

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Sablan supports move by Am. Samoa but wants increase in Marianas

By Alexie Villegas Zotomayor

SAIPAN, CNMI (Marianas Variety, Oct. 2, 2015) – The islands’ businesses are already preparing for another round of federally mandated minimum wage increase in 2016, says U.S. Congressman Gregorio Kilili Camacho Sablan who believes that a postponement may not be necessary.

Sablan is supporting H.R. 2617, a bill authored by U.S. Congresswoman Amata Radewagen of American Samoa, which calls for the delay in the minimum wage increase in American Samoa.

But Sablan said the CNMI is not part of the bill.

"I did support the measure, which passed in the House on Monday. A delay in the next wage hike may be appropriate for American Samoa, but I do not believe that a similar delay for the Northern Marianas is warranted at this time," he added.

In his statement in the U.S. House on Monday, Congressman Sablan said: "I would not want to imply a further delay for the Northern Marianas is called for at this time."

He added, "Household median income in the Marianas was just $20,000 in the last census compared to $53,000 nationwide. For that reason, I have always supported the decision made in the 110th Congress to raise the minimum wage in the Marianas to the U.S. level in a series of graduated steps."

When U.S. P.L. 110-28 was enacted, the minimum wage in the CNMI was $3.05 an hour. It is now $6.05 an hour and will increase by 50 cents every other year until it reaches the federal level of $7.25 an hour.

"That doubling of the [local] minimum wage has occurred during a period of economic difficulty for the Mariana Islands," Sablan said. "Gross domestic product was dropping by 8 percent, 12 percent, 19 percent in the first three years of minimum wage increase. I should say, however, that these drops had nothing to do with the wage but everything to do with the loss of [garment] manufacturing because of the General Agreement on Tariffs and Trade and because of a loss of tourism."

Citing the most recent GDP data, Sablan said the CNMI has now grown by 4.4 percent, reflecting a growth in tourism — especially an increase in arrivals from China.

He said there is also "a growth in consumption because workers who are paid more can spend more and that is good for the economy."

He added, "So I look forward to next year’s increase of another 50 cents in the minimum wage in the Mariana Islands. I look forward to reaching the national minimum wage in 2019, and I support legislation raising the national minimum wage because I have now seen in my district that increasing wages can have a positive impact on economic activity and improve people’s lives."

In supporting Radewagen’s H.R. 2617, Sablan said the specific economic factors in American Samoa are different from the CNMI’s.

Moreover, raising minimum wage too quickly could have a detrimental effect and may shrink employment opportunities, he said.

He said, in the last seven years, he has asked his colleagues in the U.S. Congress to tailor the increases to the specific realities in the CNMI.

He said they listened to businesses and the experts of the Government Accountability Office who looked into the effect of the periodic wage increases.

"We have successfully walked the fine line," he said.

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