Increasing wages will do more harm than good
Like everyone else, I am in support of raising the minimum wage but it must be done in a way that minimizes the negative effects of a raise. This is the reason I support the incremental increases recommended by the Congressional Budget Office. So instead of planning increases in 50 cent increments for two more years, they are planning to do it immediately because it is an election year and they have little else to offer.
The Legislature has a bill pending to raise the minimum wage increase immediately, irrespective of the impact on medium to small businesses. No doubt some employees will benefit from the increase but many businesses will be harmed by this enormous and unplanned increase. Instead of hiring new employees, new employment in small to medium size businesses will cease to make up for the increase. Prices will go up adding to the overall cost of living and in some cases, business activity will decline. Current wages may be cut and benefits eliminated altogether because most benefits in the private sector are elective.
Many businesses are still recovering from the decade-long stagnation and only now able to make business investments like upgrades in technology or property. Some businesses can simply tack on the cost of these increases to prices but not all businesses can do that easily. Hotels can add to the cost of rooms and this affects mostly tourists but local small or mid-size businesses rely on residents, which may not be able to afford these increases resulting in a decline of services.
A certain amount of political moves are acceptable during an election season but it is unwise to mess with more serious policy matters purely for political gain.
Since we are barely recovering from decades of economic decline it is irresponsible for the government to add more cost to business and the community without adequate study and consideration. The Legislature acts as though it prints money. The Congressional Budget Office studied the minimum wage issue in 2013 and published a report determining that incremental increases over a fixed period of time was the approach that generated the least number of negative effects. For our Legislature to do otherwise is reckless, harmful, and to do it in an election campaign season is even more damaging because they are prepared to take action to hurt local businesses and a fragile economy purely for political purposes.
Juan S. Tenorio (Santiago)
Dandan, Saipan
Should be based on healthy economic investments that lifts all boats not politically drawn answer that is as empty as the airheads on the hill. It is highly irresponsible to saddle taxpayers more than their share of hardship.
Wages had been depressed in the CNMI for decades and many made millions from the cheap labor. It is only right for the working poor to benefit from our economic growth. Another excuse to deprive our underprivileged within our community.
Yes, this is true that wages in CNMI were suppressed for decades. But it was the policy of local Government to attract outside investors. In Business Guide to Northern Mariana Islands the lack of trade unions and law wages rate is presented as positive point. At the time of economic boom nobody cared about wages rate because the labor force was mostly foreign. Therefore to talk about “underprivileged” local people is not correct. The wage rate is one of three wales on which economy is based: cost of materials, energy rate and wages. Disbalance of any of said parts strongly affects whole economy because a rippling effect.
Yes, workers will enjoy increased wages but it will be at the first payday.
There is no guaranty that workers will stay long enough to get check at next payday because employers will start juggle with payroll trying to cut down expenses. For instance, hotels like PIC or Hyatt have 300 employees. This gives as 2400 working hours. So, the increase on 50 cents will be 2400 x $0.5 = $1200 dollars per hour or $9600 per day (hotels operate 247) or $288,000 per month (!). The first decision would be to cut working hours and a labor force. It should be noted that power, gas and food rates will go up because CUC, Mobil and shops will have to increase wages of their workers. This is just an illustration how sensitive is the issue of wages
Buenas naisur,
I do agree with your concept above, but lots of big corporation are raking millions of dollars in profits each year in the CNMI and they need to share the wealth. CUC, Mobil, etc., had been raising the price of their commodities and services for the last decades and the minimum wages had been maintain by our politician/business owners for the sake of making profits.
We are debating about raising minimum wages, but do you know that many foreign own companies are paying below the minimum wages in the CNMI to this day? Many were not being paid over time for exceeding forty hours a week. Is our government monitoring such predicament?
And what is being done to minimize the hardship for our underprivileged working residents? Many spoke of our people being lazy, but nobody seems to care for the working poor who are trying to make ends meet. We had brought such predicament to the legislative body and it is something that no one wants to stick their nose into. The security guard company owners, poker establishment owners, store owners etc., are living life to the fullest on the expense of our unfortunate underprivileged few. Imagine yourself working a full eight hours and only getting seventeen to twenty dollars. It seems to me that you worry more about the business owners in the name of economic logic and you are forgetting or disregarding the hardship that many had to endure each day.
Each year, I make an effort to make a trek to the CNMI and assimilate the life style of our underprivileged residents. And I try my best to understand or comprehend why many are suffering. It is not because they are lazy, but they don’t have the opportunity to advance and many tend to be in a learned helplessness mode. Raise the minimum wages in the CNMI and many of our underprivileged would at least have hope of their future.
Si Yu’us Ma’ase