‘Include hotels, construction in wage hike exemption’

Northern Islands Mayor Valentin I. Taisakan urges caution over what might be the impact of the proposal to increase the minimum wage in the CNMI, pointing out the need for a comprehensive study of the issue and its potential impact on the Commonwealth.

Although he is not opposed to the idea of increasing the local minimum wage, he is concerned that “absent of a comprehensive study addressing this issue and in relation to how it may affect business and foreign investments in the [CNMI], and our people, it may be premature at this time to rush this very important issue.”

As for House Bill 14-30’s proposal to exempt garment cutters and sewers from the increase, Taisakan said that the construction and hotel industries should also be included in this minimum wage category, saying that not doing so would make the tourism and construction industries very expensive.

Instead, Taisakan submitted a proposal somewhat similar to what was proposed by the Saipan Chamber of Commerce: a tiered wage system, or different minimum wage levels for different job categories. He said the current $3.05 per hour minimum wage could stay for the garment, construction and hotel workers but different wage levels could be set for other job categories.

The effect, he said, would be positive because it would encourage people in lower wage categories to realize that they must acquire proper training and education to get a better-paying job.

“This may be the right approach to the [proposed] increase in wage and salary in the Commonwealth,” he said.

House Bill No. 14-30. proposes to increase the minimum wage from $3.05 to $5 per hour, but would exempt the garment industry. It would also increase the compensation for persons employed as farmers and house workers from $300 to not less than $350 per month.

Taisakan said that, to apply the $5 per hour minimum wage to hospitality sector would make the CNMI an expensive place to visit. The Commonwealth would be less attractive and competitive compared with other island destinations, he said.

As a consequence, the hotel companies would be affected, considering that Saipan is now receiving less and less direct flights from Japan, Korea, and other countries. He said this development has caused a huge drop in hotel occupancy and income.

“The hotel business should be given the same protection given to the garment industry,” he said.

Taisakan said the hotel industry is also the foundation of the tourism industry in the Commonwealth, which provides manpower services in all job categories and ensures that visitors and tourists enjoy their stay in the CNMI.

Taisakan also noted that the island’s construction industry has equally been hit hard by the worldwide economic recession, which is why investors are constrained from investing in major project developments like retirement homes, five-star hotels, and the likes.

“The Legislature must be cognizant of this concern and they should be mindful of the fact that most construction works are for family homes, finance-through-home mortgage banks, and some with the participation of the CDA,” he said.

He said a minimum wage increase in the construction industry will also raise the cost of building houses, which makes future home development projects, like the ones in Toto Ville, unaffordable to many.