Stimulus bill requires GAO study on wage hike impact

The stimulus bill that hurdled the U.S. Senate yesterday includes an amendment that would require the General Accounting Office to submit a report on the impact of past and future minimum wage increases in the CNMI and American Samoa.

Formally referred to as the American Recovery and Reinvestment Act (the so-called Collins-Nelson compromise), the $838 billion emergency economic stimulus bill now heads to the House of Representatives for a compromise. President Obama hopes to sign the stimulus bill into law by the end of the week.

Language specific to the CNMI and American Samoa in the amendment calls for GAO to follow through on provisions of Public Law 110-28 to submit a report on the impact of the minimum wage increases in the two U.S. insular areas.

The amendment called for GAO to submit the report no earlier than March 15, 2009, and not later than April 15, 2009—a maximum of 62 days from today.

The GAO report should include:

-the rates of employment and living standards of workers, with full consideration of the other factors that impact rates of employment and the living standards of workers such as inflation in the cost of food, energy, and other commodities; and

-estimate the impact of any further wage increases on rates of employment and living standards of workers in American Samoa and the Commonwealth of the Northern Mariana Islands, with full consideration of the other factors that may impact the rates of employment and living standards of workers, including assessing how the profitability of major private sector firms may be impacted by wage increases in comparison to other factors such as energy costs and value of tax benefits.

Gov. Benigno R. Fitial yesterday thanked U.S. lawmakers who were instrumental in inserting this amendment to the stimulus bill.

Fitial specifically thanked Delegate Eni Faleomavaega (D-American Samoa) as well as senators Daniel Inouye (D-HI), Daniel Akaka (D-HI), Jeff Bingaman (D-NM), and Lisa Murkowski (R-AK) for working to add critical pro-CNMI language that addresses federal minimum wage legislation affecting the CNMI.

“I especially want to thank my good friend Congressman Faleomavaega, who took it upon himself to successfully champion the American Samoa and CNMI language in the U.S. Senate bill. In the years that the CNMI did not have a member of Congress, Eni was always a friend to the CNMI and he continues to keep the CNMI in mind when it matters most,” he said.

Fitial added, “These reports will alert members of Congress and Administration officials to that which we already know—that during this economic depression in the CNMI, another increase in the minimum wage this year will further harm our businesses and our people as we struggle to rebound from the economic downturn.”

“We ask Congress to take a close look at these reports and consider offering American Samoa and the CNMI a deferment in the next increase in the minimum wage so that the tourism industry and other businesses throughout the CNMI can regain some economic footing in this very challenging economic environment,” said Fitial.

Fitial met with both Faleomavaega and Murkowski on this issue during his last trip to Washington, D.C. to witness the inauguration of President Obama.

The CNMI chief executive will again travel to Washington, D.C. later this month and meet with the members of the House and Senate who were responsible for getting this language included in the stimulus bill.