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On minimum wage increase Chamber asks: where will the money come from to raise wages?
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Posted on Oct 05 2000
Saipan Chamber of Commerce President Lynn Knight yesterday warned that any forced increase in minimum wage would force businesses to shut down and lay off workers.
Ms. Knight was reacting to the move of eight Democrats in the U.S. Congress to include the CNMI in the planned $1 minimum wage increase claiming the Northern Marianas has been given enough time to comply with the federal standards since it joined the U.S. political family 14 years ago.
The House of Representatives will pass a resolution today asking the U.S. Congress to exclude the Northern Marianas in the planned federal minimum wage increase because it will send the CNMI government to bankruptcy.
House Speaker Benigno R. Fitial said that such move “will effectively annihilate the livelihood of the people of the Commonwealth. It will bankrupt the CNMI government and would take us back to the Trust Territory era where our economy was dependent on Uncle Sam.”
Minimum wage in the CNMI has been pegged at $3.05 an hour while minimum wage in the U.S. mainland is $5.15 per hour.
The business community has always opposed any increase in minimum wage claiming that most of them are already paying close to, if not the $5.15 federal minimum wage because of subsidies they give on food, housing and transportation to their nonresident workers.
“If anything, our economy has gotten worse so where will the money come from to raise wages,” Ms. Knight said.
While the economy in the U.S. mainland is in a boom, she emphasized that the Northern Marianas has been in a serious downturn. “How can we be held to the same standards when we are a remote island economy more closely tied to the economic situation in Asia,” she added.
As businesses have been reeling since the Asian crisis three years ago, the Chamber president said any increase in wages would cause rapid price increases for goods and services.
While some people in the community might like the idea of a wage increase, the Chamber head said they will also be paying more for everything as the cost of living will surely go up.
