S. 256 Passes Senate

August 2, 2013

S. 256, which calls for the delay of the CNMI's federal minimum wage increases, passed the U.S. Senate yesterday. The bill was introduced by request in February 2013 by Senator Ron Wyden, Chair of the Senate Committee on Energy and Natural Resources.

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. 
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...

Although I am a Kilili supporter and he is by far the best we have ever had, in this action I totally disagree. I hope that it will not pass.

Some of Kilili actions have shown he is catering mostly to the special interest groups that he refer to as his constituents.

These are actually a small majority that consist of the business and not the actual people.

Has there ever been any delay granted for any of the states or other territories in the past for increases in minimum wages?
None that I have ever heard of (but I amy be mistaken)

It seems that he is only representing a little over 1k people ( business owners, managers)while he forsakes the rest of the 10's of thousands of actual workers.

Would this delay have happened if the majority of workers were actually locals.
For the Govt. worker that do not care and think that it will not affect them, that is not true.

The way this Govt is and the the proven track record of the mismanagement and incompetence will only continue and all are at the mercy of the ruling party, this will be a big set back in our economy, although many may disagree.

After next election when/if Inos does not get in and MAYBE we will get someone that actually will do something to get the govt. back on track and RIF, many will be forced into the private sector.
If they do not approve an extension this will also force many into the private sector. (I am against an extension)

If by chance all of the CW are given some kind of permanent status this will also put pressure on these business to pay a livable wage but it will also cause much more problems as then the wages will depend on the person's expertise while leaving the non trades people at below livable wages.

In this case scenario it will further push the indigenous in the more poverty and cause wide spread discontent.

Unfortunately as has been the case, more predominantly in the NMI, all seem to listen to their incompetent leaders and all fall over the cliff.
I have watched this from post war days when there was only about 4K indigenous left and the population was built from there to
present day.
All following our misguided leaders that had the best talk but no knowledge.

Wendy Doromal said...

Hi Captain

Good points.

"Would this delay have happened if the majority of workers were actually locals?"
Well, no! If the nonresidents workers were not disenfranchised this bill would never had been introduced. The fact that the majority of the private work sector is made up of nonvoters speaks volumes. A member of Congress can say, "I represent everyone" all he wants, but the truth is, he does not. He does not represent the nonvoters. However, he does represent the Chamber of Commerce members who are the island's largest employers -those who benefit by the lower wages. Those who are among the largest campaign donors. Those who wanted delays. The Chamber folks have become rich off the back of immorally cheap labor and want to maintain their level of profits. They lack hearts and consciences, not to mention empathy. There is no economic evidence or data to support the delays -nada, none, zilch.

Anonymous said...

Remember when Kilili took the food stamps challenge to prove no one can live on $4.00 something a day? I challenge him to live for 3 months on $5.55. It's okay for other people to make so little. How would he like it? What a joker.

Anonymous said...

dont talk about money,money ,money .concern about economy ,do you think this businesses now here in saipan are frofitable no? they are all front business ,prosecute all consfirator,and hire their own self ,just to get status.and dismantle all illigal drugs like marijuana& meth(ice)....

Anonymous said...

$5.55 ? Kilili's first class air tickets back and forth from DC costs tens of thousands of dollars a year not to mention his DC office has the largest food consumption / budget in DC history. Maybe if you move the decimal point over two spaces to the right at $555.00 per hour you will get close to his reality and away from yours. That position is one sweet deal for someone from Saipan. Huge operational budget, relatives on staff and unlimited tax payer funded trips. Best of all you get world class medical care for type II diabetes, high blood pressure and other ailments which plague over weight Chamorros who otherwise are shit out of luck.

captain said...

8:18, That is a very good suggestion.
Even better yet also have some of these business owners do the same thing, live on minimum wage after taxes.

Even with families sharing utilities and food and other costs it is very difficult and impossible to survive even in a little comfort.

For those that have to pay rent also that is very trying and forget about buying a decent car or basic appliances.
Minimum wages equal less than $900 a month before taxes a little over $10k a year.(most SSA recipients collect more than that)
How much is the Fed poverty level?

This also promulgates another problem for the locals that have a non US Cit. spouse, they do not make enough money for them to be able to apply for a green card for their spouse.
In most cases it is only the wife working anyway and that does not mean that the non US spouse is getting paid on time or for actual work.
So now since the NMI IR status is no longer in effect makes for still another problem for a Foreign spouse to work.

Anonymous said...

Anon 9:44 AM

You're absolutely wrong!! Businesses here are making BIG PROFITS! If they're not making profits, they will leave. Businessmen care for their money only, nothing else. Look at the SaiTANs, they now own almost all of the businesses here on CNMI, recently AQUARIUS is an addition to their long lists of properties and business here. If they don't make profits here, they will invest somewhere else. They love it here because they're money obviously protected and growing at the expense of poor workers both CWs or locals!

Anonymous said...

When I was in Hawaii and the South Pacific and had business there, the common percentage we all hoped to clear for profit was 30%. (actual was 31.45%)
There is a basic for formula that business should follow.

If our worker was getting paid $7 an hour we would charge $14 an hour for his time and that would cover workman's comp and other coasts associated with the worker and hopefully our profit margin. (if everything went right)
We also expected a worker to do his job and we did not require 6 workers to change a light bulb as is common in the CNMI.

In the CNMI the many business owners here that I have personally been associated with and have "mingled" with expect to clear about 500% profit.

9:44 is correct, on the ,most part.
Many business owners are crying all the way to the bank.
The ones that are moving on are not making enough profit.

Most business here could cut their workforce in half and pay wages along with mechanizing their operations if they had the properly trained experienced workers.
That would bring them an even bigger profit margin.

Anonymous said...

Mr. Kilili is just playing his cards the way Saipan Chamber of Commerce choses him to go. Mr. Kilili pretends to represent his constituents only but not the majority of CNMI people. He really does not care about the non-voters and also does not care if local people leave CNMI to settle in U.S mainland. These are the reasons he supports to halt CNMI minimum wage with his backers in Washington and CNMI. He is a great joker and knows well how to manipulate words to keep his chair continuously.

Wendy Doromal said...

2:49 I think he "cares" about the nonvoters and considers their issues or he would not have introduced any provisions at all in the immigration legislation. Howvever, I do not understand his position on minimum wage, since it is conflicting -supporting a delay in the CNMI and also supporting a $10.10 increase in the federal minimum wage in another bill.

captain said...

Wendy, I have mixed emotions on Kilili's stance as I stated earlier he has stated many times he will do what his constituents want in regards to the status on the CW's.

Again, he is the best we have ever had (so far).
But I also think that he is looking at the "American Children" for votes and the "illusion" (for a better word) that he cares while he is under extreme pressure to appease the business owners as well.

I personally like Kilili but as time goes on he reminds me of a mainland politician that has become complacent and his knowledge on just how to address the issue.
Admittedly I am not that familiar with mainland political "style" in these regards but he has struck me as such by my own observation on the international news when they address these political players.

Although I do not know anything about Kilili's personal life and am wondering just how many (IF any) CW he has in his employed in the NMI at his home?
Something just does not seem right in this issue.
Same goes with Inos' stand. (Spoken and actual actions under scrutiny)

I just hope my gut feeling on this is wrong.
I have been wrong in the past but very few and far in between.

I would really like to see Kilil run for Gov.
He would be a shoe in and we may get rid of many of these career do nothin political appointees, (or not)

Many had high hopes for Inos but he has so far proven just slightly different from Fitial with much of the same incompetent players.
Now the question would be if Kilili would prove the same.
But he never would consider running for an office in the NMI as he makes too much money where he is.
If he ever loses his present seat maybe he would run and actually be able to help the people.
That remains yet to be seen.

But your concern is noted on his recent support.
And my comment on his support on the wage delay; "If this was all locals employed would he have supported this delay in the wage hike"?
Have a nice day. (evening)

Wendy Doromal said...

Hi Captain:

You have good points. I don't vote in the CNMI and if I lived there and did I would probably do a write in vote.

There needs to be term limits for U.S. House members and for Senators so that they start listening to and working for the people, rather than those with money (businesses, Wall Street, special interest groups, etc.)

As far as Cong. Sablan's immigration position - it is not the one I approve of. I support immediate green cards for every category of legal, long-term (5 or more years) nonresident upon passage of a bill. Still, as President Obama said it's probably the best we can get right now. If you consider what we have to work with in Congress that is probably true.

But concerning the delay of the federal minimum wage, Cong. Sablan's position is confusing. Supporting a delay of the federal minimum wage in the CNMI and co-sponsoring another bill to raise the federal minimum wage to $10.10 (outside of the CNMI) does not make sense.

Anonymous said...

Clearly, Kilili is more concerned about his business allies than his constituents getting a job in private sector with decent wages.