Pete A.: Proposed wage hike unrealistic

The recent introduction of two minimum wage legislations affecting the CNMI, which Washington Rep. Pete A. Tenorio described as “drastic,” only underscores the need for a CNMI delegate in the nation’s capitol.

“This is the one of the biggest reasons the CNMI needs a delegate in the U.S. House of Representatives. It would be very difficult for other members of Congress to introduce legislation affecting us so drastically if we had a delegate,” said Tenorio.

He said the two wage bills—H.R. 4256 and S. 2370—introduced in both the U.S. House and Senate, calls for an unrealistic increase in the CNMI’s minimum wage in a very short period of time.

“Implementation of such a law, if it were passed, would drive many of our struggling businesses to close their doors all together. There would be dramatic losses in the number of jobs,” he stressed.

He said both bills are exactly the same as those introduced last year and the year before and, as what he had done before, he said he has contacted the CNMI’s friends in Congress to be ready to introduce an amendment to these bills if they are ever actually brought to a vote.

The amendment Tenorio is referring to is the tiered wage system similar to what is currently in use in American Samoa. This system provides for an industry-by-industry examination of wages, productivity, profits, cost of living, and viability of wage increases.

“One of the primary reasons I have proposed this amendment is to change our emphasis from fighting an unrealistic increase in wages to working on a realistic solution. Until the U.S. Congress either passes these or similar bills as is, or passes them with our amendment, we will have to address this issue every session of Congress. This is my third year in this office and my third time to address this issue,” he said.

“There is no doubt in my mind that we need to raise our wages. Currently the wages in our government are much higher than in the private sector, but there are few jobs in the government. We must look at raising wages in the private sector, but it has to be done in a manner that will not drive the employers out of business,” Tenorio said. “Our government must take the initiative to gradually increase our wages locally rather than continually fight national legislation where the CNMI is included for political reasons.”

Tenorio said he has concerns about what would happen if these bills became law, but added that he has faith that the CNMI’s allies in Congress will once more help the Commonwealth as they have before.

“I maintain close contact with several members of the Senate and the House on this issue. Without a delegate to speak directly for us, it’s the best thing I can do,” Tenorio added.

Saipan Garment Manufacturing Association executive director Richard Pierce had earlier said that any wage increase at this time would certainly not be in the best interest of the CNMI.

“It will harm the businesses. It will hurt the industry directly and the CNMI economy as a whole. To unilaterally introduce that in the U.S. without talking about that here is not a good idea. I don’t think they have done a study here,” he said.

He said such move would also be “a recipe for disaster for the local autonomy.”

“They [federal officials] just think that the problems out here will be fixed if they raise the minimum wage. They think it’s the solution,” he said.

House Speaker Benigno R. Fitial had also said any attempt to increase the CNMI minimum wage level would spell economic disaster to the already eroding economy of the Northern Marianas. In fact, to tamper with the existing minimum wage law is an attempt to tinker with the U.S.-CNMI Covenant and could open the floodgates for another attempt by the federal government to take over control of immigration in the Commonwealth.

Fitial stressed that the two bills would have a damaging impact on the CNMI economy, just when the apparel industry is on the verge of collapse.

The first proposal, S. 2370, was introduced by Sen. Edward Kennedy at the Senate, with the support of 26 others, including Hawaii Sen. Daniel Akaka and leading Democratic presidential candidate John Kerry.

An exactly identical bill, H.B. 4256, was introduced at the U.S. House by long-time CNMI critic, Rep. George Miller.

Titled “Fair Minimum Wage Act of 2004,” S.2370 passed on second reading and has been placed on the Senate calendar. It aims to amend the 1938 Fair Labor Standards Act to increase the federal minimum wage to $5.85 an hour. After a year, this will be further increased to $6.45 an hour and then $7 an hour by the second year.

The bill’s provision that directly affects the CNMI is Section 3, which seeks to increase the minimum wage from $3.05 an hour to $3.55 an hour, to be made effective two months after the bill becomes law. It will then be further increased by 50 cents every six months until the minimum wage in the Commonwealth attains the federal level.

The bill has not been referred to a Senate committee.

At the U.S. House, H.B. 4256 was referred to the House Committee on Education and Workforce on April 30. On May 14, the measure was referred to the House Subcommittee on Workforce Protection.