August 2, 2013
While both Senator Wyden (D-CO) and CNMI Delegate Gregorio Sablan introduced the legislation which called for a delay in raising the CNMI federal minimum wage to $7.25, both members also cosponsored legislation that would raise the federal minimum wage to $10.10. The inconsistently is perplexing, especially since Democrats support a fair federal minimum wage and support raising the federal minimum wage. In fact, President Obama called on the U.S. Congress to raise the federal minimum wage in his 2013 State of the Union Address.
The delay will have a negative impact on those who hold private sector jobs in the CNMI. Still, the companion bill may not pass in the House (or even reach the floor of the House) before the scheduled September 2013 federal minimum wage increase is set to go into effect. That would be good news for the CNMI's struggling, underpaid private sector workers who currently earn a deplorable federal minimum wage rate of $5.55 an hour.
Also, in the bill was a provision to extend the submerged lands to the CNMI from the mean high tide seaward to the point that is three geographical miles from its coast line. Under current law, those lands are owned by the United States.
Below is the written testimony that I submitted to the Senate Committee on Energy and Natural Resources for the July 11, 2013 hearing 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.
SEC. 4. ADJUSTMENT OF SCHEDULED WAGE INCREASES IN THE COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS.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.