GAO Releases Minimum Wage Report on CNMI and American Samoa

June 23, 2011

The Government Accountability Office (GAO) released a report today on the effect of the minimum wage increases in the CNMI and American Samoa. Both territories have taken deep hits as a result of the world-wide economic crisis. The comprehensive 142-page report entitled, AMERICAN SAMOA AND COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS: Employment, Earnings, and Status of Key Industries Since Minimum Wage Increases Began, details statistics and facts based on interviews with both employers and workers.

The report states that as minimum wages increased employers cut back their employee's overtime hours, reduced regular working hours, reduced benefits, laid off workers, and froze hiring.

GAO quoted workers' comments from discussion groups that revealed mixed feelings about the minimum wage increases. Of course the increase is needed to improve quality of life, but employers reacted by cutting hours and benefits:
Workers participating in our CNMI discussion groups expressed mixed views regarding the minimum wage increases and said they would like pay increases but were concerned about losing jobs and work hours. Workers in the tourism industry generally expressed greater concern about the minimum wage increases than other workers and unemployed workers.
• Price increases. Participants said they wanted to receive minimum wage increases to help them meet rising prices, including for utilities such as power and water and for food and other consumer goods. However, they said the minimum wage increases had not kept pace with changes in the price of goods, and some said the minimum wage increases had not made a difference.
• Job insecurity. Workers were concerned about the impact of the wage increases on their ability to find and retain jobs, which was already difficult. They said they had observed that while some workers received pay increases, others lost their jobs or work hours. Several said they would rather keep their jobs and work hours and stay at the current wage. They also said that many people were leaving the CNMI to find work.
• Poverty and crime. Some said that with or without the minimum wage, people in the CNMI were suffering from poverty. People who have lost jobs or had their hours reduced rely on food stamps and other benefits, though some said they would like to find jobs rather than relying on benefits. One said he planned to find and sell cans from the street to generate income. Participants also expressed concern about rising crime rates resulting from decreased employment, and several said they had been victims of theft.
• Immigration. Participants said that both workers and employers were worried about the transition to U.S. immigration law, including increased immigration fees and the status of foreign workers.
What the report did not reveal was that unscrupulous employers have STOPPED PAYING THEIR WORKERS the wages that they are owed! The Tinian Dynasty and Rota Hotel and Casino are two major employers that owe their workers weeks, even months of back pay. The Tinian Dynasty employees report that they have been told that they "will be paid  if they leave." (Don't believe them!)

Today the Marianas Variety reported that the Tinian Dynasty Hotel owes the CNMI government $30 million in back taxes.

The U.S. Department of Labor has reportedly been investigating this hotel and casino since last year. How long does it take to figure out that these crooks have stolen hundreds of thousands of dollars in wages from their nonresident workers? When will the U.S. Department of Labor and/or U.S. Department of Justice actually act on this blatant violation? After the workers are starving?

The Rota and Tinian nurses represent another case where nonresident workers have worked for months without being paid while CNMI and U.S. officials have done nothing to solve the problem.

CNMI employers have been getting away with not paying their nonresident workers because they know that most nonresidents are willing to stay employed under terrible working conditions, and in spite of the fact that they are not being paid for all the hours they work because they are waiting to see if the U.S. grants them status. Cheating employers know that the CNMI and U.S. governments seldom hold criminal employers accountable, and even less often prosecute them. (Unlike if an employee stole from their employer.)

I would love to see  GAO complete a report on:
How much money CNMI employers have stolen from nonresident workers in nonpayment of wages, illegal deductions and contract violations since the CNMI guest worker program started up until the present day;
How much money was recovered by the nonresident workers-victims and how much is still owed;
How many thief-employers have actually been prosecuted and how many have walked;
Recommendations to stop the wage theft of nonresident workers in the CNMI, and an estimate for fair reparations for the cheated nonresident workers.