There ought to be a better way
WAGE hike proponents say they want to “put more money into the pockets of working people.” Right on. But what if a wage-hike results in reduced work-hours or even unemployment for the working people? Surely the wage-hike proponents do not support that.
In the CNMI, as required by federal law, the local wage rate reached the federal level over two years ago, a few weeks before Super Typhoon Yutu kneecapped the islands’ only industry, tourism.
As everyone knows, if we want workers to be paid more, we should also want their employers to have the ability to pay higher wages. These are usually made possible by an improving economy. (In the U.S., which has the world’s largest economy, many states and cities have wage-rates higher than the federal level, and thriving companies were already paying at least $15 or more an hour in 2019.) We are also aware, of course, that not all businesses are the same, nor, for that matter, the economies of the territories or states of a huge country like the U.S.
Today, with the tourism industry still in a coma due to the Covid-19 restrictions, the remaining businesses in the CNMI simply cannot afford additional costs. If the hourly wage rate is raised to $9.50 from $7.25, and then by $1.50 annually until reaching $15 in 2025 as proposed in the U.S. Congress, many companies in the CNMI will likely reduce work-hours, benefits or the number of their employees. Some businesses may have to shut down. Others may have to increase their prices. Again, these are not what the wage-hike proponents want to happen in the Commonwealth. But in light of the CNMI’s current economic conditions, enacting wage-hike legislation would be like using a shotgun to catch atulai.
There should be a better way to help workers. These may include a federally funded Earned Income Tax Credit and/or an increase in the federal Child Tax Credit.
The CNMI, in any case, had no voice in the U.S. Congress when it federalized the local wage rate in 2007. Since 2009, however, the CNMI has a congressional delegate who caucuses with the now majority party, and he is currently a chair, vice chair or member of committees/subcommittees that deal with issues vital to the Commonwealth.
So we join the Saipan Chamber of Commerce in commending Congressman Kilili for his efforts to delay the implementation in the CNMI of the federal wage hike measure. Like the chamber, we also support the congressman’s proposal to commission an “independent, non-partisan examination of the Northern Marianas’ economy, gross domestic product per capita, unemployment rate, wages and other indicators [that] would lead us toward a sound policy on minimum wage.”
“The idea of using a minimum wage to overcome poverty is old, honorable — and fundamentally flawed. It’s time to put this hoary debate behind us, and find a better way to improve the lives of people who work very hard for very little.” — Editorial of the New York Times, Jan. 14, 1987.
DESPITE the CNMI’s seemingly bleak prospects, there are at least three public-policy issues in the not-too-distant past that are no longer pressing concerns (as of today, at least): the government’s pension fund, CHCC and CUC.
How many of us still remember that the Retirement Fund was supposed to go belly up in June 2014; that CHCC was sanctioned by CMS and was in real danger of losing its CMS certification; or that amid rolling power outages on Saipan and the scrambling for funds to pay for its fuel, CUC’s main power plant was about to shut down?
Today, amid a severe economic downturn, the main concern with the Settlement Fund is the 25% for retirees that is not required by the settlement agreement. CHCC is still not out of the proverbial woods, but is doing so much better now compared to when it was established with a $5 million budget (the Department of Public Health received at least $30 million a year), but with actual monthly allotments of $200,000 only. CHCC today is at the forefront of the CNMI’s impressive response to the Covid-19 pandemic.
As for the primary government agency that stands between us and a life that is poor, nasty, brutish and quite possibly short, CUC continues to comply with most of the key requirements of the federal stipulated orders. The CUC board is satisfied with the executive director’s performance. (This is no small feat on the executive director’s part as anyone familiar with CUC history would attest) The federal court is not dissatisfied. Federal assistance continues to be provided to CUC. The lights are on. Water supply remains available in this dry season. After so much political drama at CUC, it is now one of the least controversial government entities in the CNMI.
In the midst of a global pandemic and the worst economic meltdown in Commonwealth history, there are, so far, no apocalyptic, life-and-death crises bedeviling the general public.