Senate Hearing on CNMI Issues

July 11, 2013

I submitted written testimony focusing only on the delay of the minimum wage since I have previously and repeatedly made clear my stand on the extension of the flawed CW Program.

A series of harmful actions and inactions by the U.S. Congress has led to the necessity to extend the program. These include:

1. The failure to include an essential status provision for legal, longterm nonresidents in the original bill;
2. The failure to act upon the recommendations from the mandated 2010 U.S. Department of Interior's Report on the Alien Worker Population in the Commonwealth of the Northern Mariana Islands;
3. The failure to amend P.L. 110-229 to include a status provision for the legal, nonresidents; and
4. The failure of the U.S. Congress to act upon comprehensive immigration reform in a timely manner.

(The following documents are among the many that I submitted to officials, members of the U.S. Congress and Congressional Committees urging action:
Position Statement/Written Testimony, November 7, 2007 House Markup Hearing;
May 19, 2009 Written Testimony
July 14, 2011 Written Testimony
Doromal Draft to Amend P.L. 110-229

The written testimony that I submitted to the committee regarding the provision to delay the federal minimum wage increase:
As a labor and human rights advocate, I would like to express my strong objection to the provision in S.1237 and in its companion bill, H.R. 2200, that would delay the increase of the federal minimum wage in the U.S. Commonwealth of the Northern Mariana Islands (CNMI) every other year starting in 2013. 
Section 8103(b)(1)(B) of the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 (as amended by section 2 of Public Law 111-244) is amended by striking ‘2011’ and inserting ‘2011, 2013, and 2015’.
A separate Senate bill, S. 256, also calls for a delay in the CNMI’s $.50 federal minimum wage increase in 2013 and 2015. 
The Fair Minimum Wage Act of 2007 component of P.L. 110-28 required the CNMI minimum wage to be increased by $.50 an hour each year until it reached the level of the national minimum wage in 2015. Before P.L. 110-28 became law in May 2007 the CNMI minimum wage was a mere $3.05 an hour. Six years later the federal minimum wage in the CNMI remains at a shameful $5.55 an hour.

The scheduled 2011 $.50 federal minimum hourly wage hike was delayed by passage of H.R. 3940, which became P.L. 111-244. The delay was promoted by the Saipan Chamber of Commerce and the Hotel Association of the Northern Mariana Islands (HANMI) and backed by CNMI Delegate Gregorio (Kilili) Sablan. Although they claimed that the weak economy would be further harmed by the scheduled $.50 hourly increase, the U.S. Department of Commerce Bureau of Economic Analysis indicated that the CNMI economy actually grew 2.3 percent in 2010. 
When members of Congress make decisions involving delaying the scheduled CNMI minimum wage increase, they primarily weigh the opinions of the Chamber of Commerce, the Hotel Association of the Northern Mariana Islands (HANMI) and other business owners who advocate for lower wages to ensure their own higher corporate profits. The members routinely ignore the needs and opinions of the 12,000 disenfranchised, legal long-term foreign workers who make up more than 80 percent of the private sector workforce.  Although most of the foreign workers have lived and worked legally in the CNMI for 5, 10, 20 or more years, they remain the Northern Mariana Island’s voiceless underclass.

The U.S. citizens who work in the private sector deserve a fair wage.  An underlying purpose of Title VII of P.L. 110-229 was to phase out foreign contract workers while training U.S. citizens to learn the skills needed to replace foreign workers thus reducing the unemployment among U.S. citizens in the CNMI. Maintaining an unfair minimum wage that promotes poverty and a poor quality of life is not the way to encourage U.S. citizens to work in the private sector. More and more of the CNMI’s residents are leaving the CNMI to move to Guam and the U.S. mainland where they have opportunities to make a decent living. 
Resident and nonresident workers in the CNMI struggle to survive. Their meager earnings cannot keep up with the rising costs of commodities and utilities. Many of the workers must choose between paying rent and healthcare. According to the 2010 Census, over 33 percent of the CNMI population has no health insurance, 85.3 percent of families with children under 18 years of age live in poverty, and the per capita income is a mere $9,656. As of January 2013 there were 3,518 household members and 9,522 individual recipients of the federal food stamp program. The CNMI Medicaid client base is about 18,000. The poverty in the CNMI is worsened by government policies, and can be corrected by taking appropriate actions such as honoring the law that was passed in 2007 to incrementally raise the minimum wage in the CNMI. 
When the vast majority of a population lives below the poverty level, they cannot afford to stimulate the economy with any purchases other than those needed to survive.  As long as the federal minimum wage is substantially less than a living wage, there will continue to be an exodus of people from the islands, and the economy will not improve. An economy built on the backs of indentured servants will not grow. 
There is no economic basis for proposing two more delays in the scheduled annual $.50 minimum wage increases in the CNMI. The tourism sector of the economy in the CNMI has increased significantly according to the Marianas Visitors Authority, which reported a boost in tourism, the CNMI’s main industry. In May 2013 visitor arrivals were up 16 percent compared to May 2012. In fact, it was reported that there is currently a shortage of hotel rooms in the CNMI to support the increase in visitor arrivals. In January 2013, HANMI reported the hotel occupancy rate was at 91.05 percent, the highest in 15 years. 
In his 2013 State of the Union Address, President Barack Obama called on Congress to increase the national minimum wage to $9.00, stating, “Working folks shouldn't have to wait year after year for the minimum wage to go up while CEO pay has never been higher." 
At the same time that some members of Congress are pushing to keep the CNMI federal minimum wage at an immoral $5.55 an hour, we see other members heeding President Obama’s message by supporting an increase in the federal minimum wage. S. 460, introduced on March 5, 2013 by Senator Tom Harkin, and the companion bill, H.R. 1010, introduced by Rep. George Miller on March 6, 2013, both propose an increase of the federal minimum wage.

S. 460 and H.R. 1010, The Fair Minimum Wage Act of 2013, “amend the Fair Labor Standards Act of 1938 (FLSA) to increase the federal minimum wage for employees to: (1) $8.20 an hour on the first day of the third month after the enactment of this Act; (2) $9.15 an hour after one year; (3) $10.10 an hour after two years; and (4) the amount determined by the Secretary of Labor (based on increases in the Consumer Price Index) after three years, and annually every following year.”

It is perplexing that CNMI Delegate Gregorio Sablan who introduced H.R. 2200, which proposes to delay the federal minimum wage increase in the CNMI, is also one of the 141 cosponsors of H.R. 1010 that proposes to increase the federal minimum wage. Likewise, Senator Ron Wyden (D-OR), who sponsored H.R. 2200’s companion bills, S. 1237 and S. 256, is one of the 30 co-sponsors of  S. 460 that would raise the federal minimum wage. Both support delaying a fair wage for the workers in the CNMI who are some of the lowest paid workers on U.S. soil, while both support raising the minimum wage for other U.S. workers. Why? 
It is time to end the disparity between workers who toil on U.S. soil in the CNMI and workers who toil on U.S. soil in the U.S. mainland. The vast majority of the workers in the CNMI are disenfranchised, oppressed, and voiceless. Elected officials in the CNMI and in the U.S. must listen not only to employers and business organizations who stand to benefit by keeping wages artificially low, but to the workers ­–residents and nonresidents– most impacted by the low wages. 
Income inequality in the CNMI prevents sustained economic growth, keeps U.S. citizens from applying for low-paying private sector jobs, and holds those working in the private sector in extreme poverty. The proposed wage delays mean that the resident and nonresident workers of the CNMI will not even see a federal minimum wage of $7.55 an hour until 2018, five years from now. That is truly unacceptable and unjust. I urge members of Congress to stop any further delays of the scheduled minimum wage increases in the CNMI.


captain said...

While I agree with the increase in minimum wage and NOT to delay it, it is interesting that DC has just voted to raise their minimum wage to over $12 an hour.
The reasoning was that the average worker needs to make a livable wage.

Walmart is upset about this and has threatened to halt construction on a few of their new.
stores now being built.

Interesting that these lawmakers see the need to increase the wage in their backyard where the wage is over $7 now but not in Saipan where the wages are very low vs cost of living.

Wendy Doromal said...

Hi Captain -Yes, very hypocritical.

Green Cards for All! said...

Actually, the DC vote was by the City Council, not Congress.

These are two different governments with often contrasting agendas.

We certainly wouldn't want to confuse the CNMI Legislature with the U.S. Congress, either!

Anonymous said...

We will never improve the quality of life here until we increase the minimum wages and give citizens an incentive to work. The Congress should have improved the status of workers a long time ago, but they didn't and that's out of our control. Citizens here can't find work as businesses prefer foreign workers. The min wage would only be delayed by this bill, and the transition period extension doesn't need a Congressional action, so the most important point in this bill, hidden and not publicized, is that non-visa business can stay indefinatly in the CNMI. The US requires investors to hire citizens and citizens here disserve the same protections.

Wendy Doromal said...

11:11 I understand your point, but I certainly did not confuse anything. Both Sablan and Wyden introduced legislation with contrasting goals regarding the federal minimum wage.