Locals and the minimum wage

In response to my last minimum wage column, a reader e-mailed to ask me some pretty fair and worthwhile questions. For the benefit of others who may share the same concerns, let me address these pressing questions in today’s column. Here goes.

Question: “Who can support a family on $3.05 an hour? Who can maintain a decent quality of life on such wages?”

Answer: Well, first off, local people should not have a family unless they are able to provide for the needs of a family. Part of the problem is cultural: Local kids are having kids way before they have

acquired the skills and education needed to make a decent living. Local people should take it upon themselves to practice intelligent family planning and not commit themselves to a family unless they are first able to offer financial security.

Keep in mind that many successful local people in the private sector have no problem supporting their families and maintaining a decent standard of living. They succeed because they practice proper planning. They succeed because they behave intelligently and responsibly. Above all, they succeed because they place themselves well above and beyond the minimum wage level in the labor market place.

Although I am by no means a financial success, as a local person who has never worked for the government in his life, I used to save as much as $1,000 a month while working in the CNMI private sector. Although I had no college degree at the time, I still earned more than the CNMI minimum wage. I had no complaints. The CNMI tax rebate was great. I had no wife, no children, no outstanding loans.

I lived with my mother and was quite content, except for the occasional entertainment splurge (in which I had a great time!), to save as much as I possibly could before finally starting a family, which I still have yet to do, and which I absolutely will not do unless I first feel completely financially secure.

The way I see it, a man simply has no right to have a family unless he can safely and securely provide for their needs. For a man to shirk his individual responsibilities–i.e., to abandon his education and then start producing as many babies as he possibly can–only to later blame the government for not raising the minimum wage in order to give him (and his family) a “living wage”: well, to me, this is the pinnacle of moral outrage to say the least!

Secondly, it should be pointed out that nonresident workers can live quite comfortably on $3.05 an hour. They can do so because of all the expenses that their employers automatically shoulder for them by law: food, housing, transportation, and medical expenses, among still others. They can then use a considerable part of their earnings to support their families back in their home countries, where the dollar is strong.

Question: If you do not raise the minimum wage, how are you ever going to attract locals out of big government and into the private sector? How will $3.05 an hour induce a local person into the private sector?

Answer: If you raise the minimum wage, you will hurt the private sector; you will hurt profits, which will, in turn, hurt tax collections and harm job creation. The weak CNMI economy cannot withstand a severe labor price shock. Besides, competent, capable, valuable, talented, experienced, educated locals do not have to settle for $3.05 an hour.

Question: Won’t a low minimum wage keep talented locals in the US mainland?

Answer: Generally speaking: Heck no! In the States, you are just a small fish in a huge lake. In the CNMI, one can be a big fish in a small pond. Barring a federal takeover, there are all sorts of benefits to returning to the CNMI: family, networks, taxation. Why would anyone want to pay federal, state and local taxes in the states? Sales tax and property tax?

Strictly a personal view. Charles Reyes Jr. is a regular columnist of Saipan Tribune. Mr. Reyes may be reached at charlesraves@hotmail.com