August 7, 2013
What were the Democratic U.S. Senators thinking when they pushed through S. 256 that would delay the federal minimum wage increases in the CNMI?
That action conflicts with the Democratic platform and the President's agenda. That action, if signed into law will continue the struggle of the CNMI's lowest paid wage earners –those who work full-time, but do not even earn enough to be even considered "middle class" by U.S. standards. The majority of the private sector workers are paid the federal minimum wage of $5.55 an hour, poverty level wages.
The same members who introduced S. 256 in the Senate and the companion bill in the House also co-sponsored the Senate and House bills calling for the federal minimum wage to be increased to $10.10.
President Obama is criss-crossing the nation to speak out for the rapidly shrinking middle class and promoting an increase in the federal minimum wage. Members of the middle class in America today are seeing their savings accounts dwindle, their earnings unable to keep up with inflation and their overall quality of life diminishing. Wall Street, banks, and corporations have enriched themselves disproportionately by sticking it to the middle class.
The situation is much worse for the minimum wage earners in the CNMI.
Government policies have ensured that upward mobility for middle class Americans has stopped. More and more members of the middle class live from paycheck to paycheck. The American Dream is elusive to many in the middle class who can not afford to own a home, pay for their children's college, enroll in medical insurance, save for retirement or even buy enough food on a regular basis.
In 2009, 22,000 households that made more than $1 million paid less than 15% of their income in income taxes and 1,450 households paid zero in federal taxes. Today 39 percent of the wealth is controlled by the top one percent of Americans.
Michael Hacker from The Daily Orange painted a vivid picture of the decline of the middle class:
In the past 30 years, there have been major tax cuts for high-income Americans that, when compared to tax cuts for the middle class, are much larger as a proportion of income.
There has been a decline in real minimum wage, which remains well below the level of a livable income.
Unions have been demonized and disbanded in efforts driven by federal policy.
Since 1999, there has been critical deregulation of the financial industry. This deregulation took place even though high-income earners come disproportionally from the financial industry.Clearly, the decline in the minimum wage, which, as Hacker stated, is not a livable wage, has had the most devastating impact on the poor and middle class. It has also had a devastating impact of the fraying of our democracy. The U.S. democracy "of the people, by the people, for the people" is nonexistent today. Perhaps of the rich, by the rich and for the rich would be a better description of our current political system.
There is presently a sentiment in America that the wealthy, the corporations and the big businesses deserve a stronger voice in our democracy than the average man or woman. Most of the current members of Congress support and promote this position by favoring the voters and voting blocks who can contribute the most to their campaigns. The rich and powerful have the money to lobby to influence policy and push their agendas, often at the expense of the middle class and the poor. (Think pharmaceutical companies, the NRA, Wall Street, big banks, etc. or in the CNMI the Chamber of Commerce and HANMI, the Tan family, etc.)
"No one who works full-time in America should have to live in poverty."
–President Barack Obama'
The CNMI is an example of how government policy and the desires of the wealthy business owners have promoted a society of the haves and the have nots with a disproportionate underclass whose majority consists of the disenfranchised and voiceless foreign workers. The CNMI runs like a bee hive with an elite minority of queen bees ruling over a vast majority of worker bees.
Does a minimum wage of $5.55 provide a worker and his or her family a proper quality of life or dignity? No.
Low wages promote poverty. The CNMI's per capita income in 2010 was $9,656 as compare to the U.S. per capita income of $46,616. The 2010 Census reveals that the majority, 51 percent of the population of the CNMI, lives below the poverty level! Raising the federal minimum wage would ensure that eventually the lowest paid laborers could be lifted out of poverty.
Low wages promote disease and ill-health. A whooping thirty three percent of CNMI residents have no health insurance.
Low wages promote food insecurity. An estimated 19 percent of CNMI families are enrolled in the food stamps with many more being eligible but not receiving benefits.
Low wages create stagnation in the economy. The more money workers have, the more that they can spend to support business and economic growth.
Low wages are a major reason that people leave the CNMI. Even the current federal minimum wage of $7.25 an hour ($15,080 annual salary) looks better than the CNMI federal minimum wage of $5.55 ($11,544 annual salary). An extra $3,500 a year could greatly increase the quality of life, even though the wages are still poverty level wages.
President Obama supports the idea that prosperity has to come from the middle out rather than from the top down. He believes that the trend to squeeze out the middle class could be reversed with the right polices. On July 24, 2013, in an address in Galesburg, Illinois, the President said:
"I want to make sure that all of us in Washington are investing as much time, as much energy, as much debate on how we grow the economy and grow the middle class as we've spent over the last two to three years arguing about how we reduce the deficits," Obama said. He called for a shift "away from what I think has been a damaging framework in Washington."Using a stalled economy as an excuse to delay an increase in minimum wage is not valid. Some of the county's most esteemed economists have written a letter to President Obama supporting an increase in the minimum wage. Among the ten economists advocating for an increase in the federal minimum wage are Robert Reich, former Secretary of Labor; Joseph Stiglitz, Nobel Laureate, Professor of Economics, Columbia University; and Lawrence Mishel, President, Economic Policy Institute.
From the July 2012 letter:
In recent years there have been important developments in the academic literature on the effect of increases in the minimum wage on employment, with the weight of evidence now showing that increases in the minimum wage have had little or no negative effect on the employment of minimum wage workers, even during times of weakness in the labor market. A minimum wage increase can also serve to stimulate the economy as low-wage workers spend their additional earnings potentially raising demand and job growth. Therefore, pursuing a higher minimum wage at this juncture will not only provide raises for low-wage workers but would provide some help on the jobs front as well.Good employers pay fair wages. Speaking about an increase in the New York minimum wage, Costco Senior Vice President Jeff Long said, “At Costco, we know good wages are good business. We keep our overhead low while still paying a starting wage of $11 an hour. Our employees are a big reason why our sales per square foot is almost double that of our nearest competitor. Instead of minimizing wages, we know it’s a lot more profitable for the long term to minimize employee turnover and maximize productivity and commitment, product value, customer service and company reputation.”
It is time that the policy makers stop making excuses to promote a livable and fair federal minimum wage, whether it is in the CNMI or across the nation.