Economic Truth Revealed After Bill Passes

September 17, 2013

Over the last year the Saipan media has had numerous stories about the increase in tourism and economic growth in Saipan. Yet all of the data was ignored or denied as elected officials, rich business owners, the Chamber of Commerce and HANMI pushed for a delay in the $.50 an hour federal minimum wage.

As I wrote in my July 2013 Senate hearing testimony:
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. 
This week the Marianas Visitor's Authority reported that total tourist arrivals reached over 400,000, with the number of Chinese and Russian tourist arrivals setting records. The August 2013 visitor arrivals increased 12% over last year's August arrivals. Japanese arrivals for August were the highest this year. From the press release:
Total visitor arrivals to the Northern Mariana Islands have reached 400,000 passengers so far this year, exceeding arrival levels last seen in 2006 when Japan Airlines was flying to the CNMI from the Japan market. In addition, according to the Marianas Visitors Authority, arrivals from China have now reached 102,810 person for the year while arrivals from Russia have reached 10,476 persons, both of which are record annual totals
The August 2013 visitor arrivals to the CNMI were up 12 percent compared to August 2012, registering 44,817 visitors in August compared to 40,225 in August 2012.
As if that wasn't enough to verify the economic upswing, an article in the Saipan Tribune cited a major increase in hotel room occupancy rates. HANMI, one of the CNMI organizations that convinced naive members of the U.S. Congress that the economy could not support a wage increase, called 2012 a "banner year". From the Tribune:
The Hotel Association of the Northern Mariana Islands reported 94.01 percent occupancy among its 12-member hotels for August 2013, an 11-percent increase compared to August 2012. HANMI said 69,882 of 74,338 available room nights sold in August 2013, compared to 61,565 of 74,462 of available room nights sold over the same period last year. Room rates were $131.32 during the month, compared to $123.78 last August. "2013 continues to be a banner year for the CNMI tourism market,” said HANMI vice chair Gloria Cavanagh.  
So far this calendar year, hotel occupancy is at an average 85.28 percent, 11 percent higher than last year. The number is slightly over a healthy industry indicator average of 80 percent occupancy.
“Although the fall season brings in lower occupancy rates, we still anticipate growth in order to maintain our double digit growth rate for the year. It is fantastic to see new buildings going up and old buildings being improved. This is a sign of the optimism that our tourism economy is stirring.
"Fantastic", "exceeding arrival levels", "record annual totals", "doubled", "increase", "record", "double digit growth", "optimism", "rise significantly", "continued rapid growth is projected", "over a healthy indicator average", "economy is stirring"! All of these wonderful quotes indicating economic growth are from the HANMI and Marianas Visitors Authority who claimed just months before that the CNMI economy could not support a $ .50 federal minimum wage increase. Amazing!

HANMI and the MVA are two of the CNMI's agencies that have the Federal Government's ear. The other is the Saipan Chamber of Commerce. The three organizations are made up of members who have gotten rich off the backs of impoverished, disenfranchised underclass.

They failed to mention the CNMI's economic growth when pushing for a delay in the federal minimum wage.  After all their goal was to keep that money in their pockets and out of the hands of the indigent nonresident workers. Members of the U.S. Congress and U.S. officials must have missed the wink in the eyes of the Saipan persuaders; they must have missed the crossed fingers behind their backs as they convinced them that the CNMI economy could not support a 50 cent increase in the federal minimum wage.

Senator Wyden (D-OR) and Congressman Miller (D-CA), who both support an increase in the federal minimum wage to $10.10, had major roles in delaying the CNMI federal minimum wage increase. Considering these recent economic reports they both should feel duped.

In fact, Rep. George Miller was the author of the federal minimum wage bill that instituted the annual increases of the federal minimum wage in the CNMI. If the increase schedule was followed as outlined in that bill, the lowest paid workers in the CNMI would be earning $6.65 today. Currently they earn a meager $5.55 because of bills delaying the increases.

The remarks coming from George Miller (D-CA) who authored the original CNMI minimum wage bill are incredible. Speaking on the House floor in favor of S. 256 (From Congressional Record):
Mr. GEORGE MILLER of California. Mr. Speaker, I rise in support of S . 256 . This legislation includes provisions adjusting the minimum wage schedule for the Commonwealth of the Northern Marianas Islands in a way that I think is appropriate and fair for both workers and businesses there. Current law requires CNMI to increase its minimum wage 50 cents a year until it reaches the Mainland's federal minimum wage level of $7.25. 
Current law also requires the GAO to regularly report to Congress on economic conditions in Commonwealth over the course of these minimum wage adjustments. These GAO reports are intended to give the public information so that, based on sound economic analysis, Congress can adjust the minimum wage schedule for the territories if warranted. The next GAO report is due in April of 2014. 
Since 2007 the Commonwealth's minimum wage has increased from $3.05 an hour to $5.55 an hour, an 82% increase in the past 5 years. This has brought new purchasing power and a higher standard of living for many workers than they could have negotiated on their own. 
This bill would skip an increase in the minimum wage in CNMI for 2013 and 2015, while still requiring increases in 2014, 2016 and subsequent years. This approach was recommended by the Saipan Chamber of Commerce. The Chamber stated in a May 8th letter that given the fragile economy in CNMI "spreading the wage jumps over a two-year period seems prudent.'' 
This legislation is also recommended by Congressman SABLAN, a tireless advocate for workers and for improving the Commonwealth's economy. Because CNMI's wages had been depressed for so long, it is a long march of nearly a decade to more than double their minimum wage. In a territory like CNMI, we have recognized that we would need to be flexible with the wage rate schedule over that time frame, as conditions warranted. Today's bill reflects that need for flexibility. 
It allows us to review the next GAO economic analysis for CNMI before another wage increase takes effect. Because of CNMI's unique economic circumstances and relatively undiversified economy, it is appropriate for Congress to adjust the minimum wage schedule in response to changing economic conditions, while keeping our long-term commitment to reaching parity with the federal minimum wage. I urge my colleagues to support S . 256.
Beyond disappointing –far, far beyond. Does Rep. George Miller truly believe that the nonresident workers have more purchasing power? Did he investigate? Does he not know that when wages rose, employers cut the nonresident workers hours, denied them overtime pay and removed their benefits? Does he not know how much the cost of living has risen in the CNMI? Does he understand that the majority of nonresident workers have absolutely no health insurance? Perhaps the Chamber and other delay persuaders forgot to share those facts.

No the delay is not "fair" for both workers and businesses. It seems some formerly engaged members of Congress no longer conduct independent research or weigh the opinions of the nonresident workers, their advocates or others who understand the plight of the nonresident workers. It looks like they just enjoyed a tall glass of the Chamber-Sablan Koolaid and called it a day.

Gone are Washington's Democratic "heroes" or "champions" who formerly supported human rights, fair wages and permanent residency for the disenfranchised, impoverished CNMI nonresident workers.

The immigration reform bill looks like a major no-go in the U.S. House. No member of the U.S. Congress has the courage and moral inclination to introduce a separate bill to grant permanent residency to the legal, long-term foreign workers.  The 5-year extension of the flawed CNMI-only guest worker program will probably push though most likely with support from Wyden and Miller. These are bleak times indeed for the nonresident workers.

I encourage the CNMI's nonresident workers to share their reality with these U.S. officials:

Senator Ron Wyden:
221 Dirksen Senate Office Bldg.
Washington, D.C., 20510

Phone: (202) 224-5244
Fax: (202) 228-2717
Email  Staffer: Allen Stayman at

Congressman George Miller
2205 Rayburn HOB
Washington, DC 20515

Phone: (202) 225-2095
Email Staffer:  Jacqueline Silvers at

President Barack Obama
The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Comments on line

Phone comments: 202-456-1111


Anonymous said...

Hiding data and reports is nothing new. Devious schemers that pull out reports when it suits them. You can bet Kilili told the Labor officials that the economy is so improved that the 5 year extension is essential to fill positions. BS.

Anonymous said...

If it weren't for these "rich businesses" there would be no employment for contract workers or anyone else. Most would be climbing garbage heaps in Manila for food. Not all well to do business owners cheat their workers however I do know of several Filipino and Bangladeshis who routinely steal and cheat their workers.

Anonymous said...

1:16 The rich businesses wouldn't be rich if they paid the workers a fair wage. Your the king of the racist trash heap.

Anonymous said...

NOOOOOOOOOOOOOO! Say it ain't so George!

Here he is speaking on raising the federal minimum wage: "Every day, millions of Californians work hard to make a living for themselves and often for their families as well. They wash dishes, stock shelves, mop floors, clean hotel rooms, and prepare and serve food. Their jobs can be physically demanding, oftentimes dangerous and demeaning, and always low-paying. But despite working a full-time job, many low-wage workers still live in poverty.

This isn't right.

A full day's hard work should be enough to keep you and your family out of poverty. But this basic American value no longer applies to millions of hard working Americans because the real value of the federal minimum wage has been allowed to fall sharply over the years. Now it's time for the nearly 3.5 million workers in California and 30 million workers nationwide who work in low-wage jobs to get a raise."

I guess that's except for workers in the islands. They deserve poverty?

Anonymous said...

Delaying the increase was a mistake. There was no justification or data to support a delay, but there is data to support the increase. To say the workers are doing better is far from the truth. Were these guys lied to or do they just not care any more. That is the real question.

Anonymous said...

take away wage increase, take away ombudsman, take away hope for status. Who thinks the tourist increase can happen without ocws? this is the thanks they give us. we're the ones doing the work to make the tourist increase possible but we don't get increase. that's double increase for tourist business owners and zero for us.

Angelo Villagomez said...

Cut the government. Cut taxes. Pay workers more.

Anonymous said...

We here all talk about GAO report on economy. A real report needed is one on how many contract workers are cheated by employers. If GAO wants a real picture do that one. That report shows moneys employers take from workers. That’s the real economy. Talk to all workers and promise no deportation if they tell truthful how treated by employer. find out what business not pay fair and what business make workers pays CW fees. We like a GAO tell truth report.

Anonymous said...

Mayb everyhing isnt the way many advocates was. it appears the cnra intent of seeing everyome get a status found in th INA is coming true. without the extension the CW is going away and then those without a 'real' INS status will ne required by law to leave.