Most minimum wage earners in the CNMI will see a 50-cent increase in their salary starting tomorrow as required by federal law—from the current $5.55 an hour to $6.05 an hour.
The new minimum wage of $6.05 an hour effective Sept. 30 is almost double the wage set by CNMI law.
The CNMI skipped a 50-cent minimum wage increase last year, and will have another reprieve in 2015. The law mandates the CNMI to increase its minimum wage by 50 cents annually until it reaches the federal minimum wage floor of $7.25 an hour.
Delegate Gregorio Kilili C. Sablan (Ind-MP) said getting the increase right has been one of his toughest jobs as the CNMI’s representative in Congress.
“Workers tell me they worry that, if wages rise too quickly, they will lose their job or have their hours cut. Employers say they cannot invest in growing their business, when wages go up too fast. But my heart tells me that families need more money to meet their needs,” Sablan said.
Sablan has amended federal law twice to stretch out the increase, relying on the U.S. Government Accountability Office’s economic analysis.
GAO’s March 2014 report says that “the inflation-adjusted earnings of minimum wage workers who retained their jobs and work hours rose… by about 39 percent for the entire period from 2006 to 2012” and “the hourly wage of minimum wage workers increased by more than inflation.”
“As long as wages stay ahead of prices and the increases do not cost us jobs, I think we have the right policy in place,” Sablan said.
A 50-year old minimum wage earner said her employer has yet to notify her and her fellow employees whether they will be covered by the minimum wage increase tomorrow.
“I’m hoping that I will get a wage increase because prices of goods have been going up and it’s hard to catch up,” the worker told Saipan Tribune yesterday. In her 24 years of working on Saipan and on her fourth job, she remains a minimum wage earner.
Some business managers said the CNMI should expect increases in the price of consumer goods and services because employers or businesses will have to cover for the minimum wage increases.
Workers previously reported losing certain privileges such as free housing and transportation to and from work when their employers were required to increase their minimum wage every year.
The Saipan Chamber of Commerce, the largest business organization in the CNMI, sought a skip in minimum wage increase in 2014 to give employers breathing room, now that they have only recovering from years of economic slump.
That request was granted in a form of legislation that Sablan worked on. The same 2013 law also gave the CNMI control over its 3-mile submerged lands.