Minimum wage study underway

The Government Accountability Office has recently begun work on preparing the minimum wage study that will look at the impact of past and future wage increases in the CNMI and American Samoa.
The GAO is currently in the design phase and establishing the methodology and determining what data is needed, said Emil E Friberg Jr. of GAO.

“Currently, we are having initial meetings with relevant federal agencies and the two island governments,” he said in an e-mail.

The GAO report should include:

-The rates of employment and living standards of workers, with full consideration of the other factors that impact rates of employment and the living standards of workers such as inflation in the cost of food, energy, and other commodities; and

-Estimate the impact of any further wage increases on rates of employment and living standards of workers in American Samoa and the Commonwealth of the Northern Mariana Islands, with full consideration of the other factors that may impact the rates of employment and living standards of workers, including assessing how the profitability of major private sector firms may be impacted by wage increases in comparison to other factors such as energy costs and value of tax benefits.

The study is part of the American Recovery and Reinvestment Act.

The original version of the bill said Congress would receive the report between March 15 and April 15, 2009, but the conference bill signed into law extended the deadline for Congress to receive the report to April 15, 2010, which means another 50-cent increase will occur in May this year. This will push the CNMI’s minimum wage to $4.55 per hour.

By 2015, the minimum wage in the CNMI will increase to the federal level of $7.25 per hour.

Gov. Benigno Fitial lauded the inclusion of the language in the original version of the bill.

“These reports will alert members of Congress and [Obama] Administration officials to that which we already know—that during this economic depression in the CNMI, another increase in the minimum wage this year will further harm our businesses and our people as we struggle to rebound from the economic downturn,” Fitial said in his statement applauding the Senate’s version of the bill.

“We ask Congress to take a close look at these reports and consider offering American Samoa and the CNMI a deferment in the next increase in the minimum wage so the tourism industry and other businesses throughout the CNMI can regain some economic footing in this very challenging economic environment,” he added.

When the ARRA was signed into law with the new 2010 date, Charles Reyes, press secretary for the Governor’s Office, said the administration was disappointed.

“We are disappointed that the deadline for the minimum wage study was pushed back to 2010. This is a critical matter that should be addressed immediately because of the potential economic harm to the CNMI,” Reyes said.