April 1, 2008
Submitted by Wendy L. Doromal
Today's Saipan Tribune contains yet another article which quotes Chamber of Commerce President, Jim Arenovski, exaggerating the effect that a 50 cent increase in the minimum wage would have on the economy and businesses in the CNMI. No opponent of the minimum wage increase who discusses the projected "devastating" impact, ever states that businesses making under $500,000 yearly in annual dollar volume are exempt from the federal minimum wage. I recently learned this from an official at the U.S. Dept. of Labor. The DOL website states:
"The minimum wage law (the FLSA) applies to employees of enterprises that have annual gross volume of sales or business done of at least $500,000. It also applies to employees of smaller firms if the employees are engaged in interstate commerce or in the production of goods for commerce, such as employees who work in transportation or communications or who regularly use the mails or telephones for interstate communications. Other persons, such as guards, janitors, and maintenance employees who perform duties which are closely related and directly essential to such interstate activities are also covered by the FLSA. It also applies to employees of federal, state or local government agencies, hospitals and schools, and it generally applies to domestic workers.
The FLSA contains a number of exemptions from the minimum wage that may apply to some workers."
The CNMI minimum wage is $3.05, and as far as I know there is no discussion to raise it. Small businesses will pay this minimum wage. Certainly businesses making over 1/2 million dollars yearly can absorb the federal minimum wage increase.
The federalization and minimum wage fighters, including Mr. Arenovski and HANMI's Lynn Knight, continue to project and promote these scenarios that would develop if there was a $. 50 increase in the minimum wage: cutting hours of employees, reduction in workforce, increased prices for goods or services, business closures. All of these projections were also threatened with the last increase. Does anyone have statistics to see how many CNMI businesses folded, and what was the cause? Did businesses close because of the high cost of utilities, cost of raw products and shipping, or because of the minimum wage increase? How many businesses in the CNMI make under $500,000 annually?
The benefits of a minimum wage increase greatly outweigh the negatives. Workers cannot afford basics - housing, food, electricity, gas on the inadequate wages they are being paid now. Please refer to these stories for more views on the minimum wage increase:
Views of Federalization and Minimum Wage
Senate Testimony on the Minimum Wage
Minimum Wage Debate Rages in CNMI and DC
Minimum Wage Testimony of Tina Sablan
A Letter from Malou Berueco
A Letter From Ron Hodges
More Testimony on Minimum Wage
Minimum Wage -Views
Distortions and Spin