Chamber backs 18-month delay in proposed minimum wage hike

The Saipan Chamber of Commerce supports Delegate Gregorio Kilili C. Sablan’s (Ind-MP) position to delay by 18 months the implementation of the Raise the Wage Act of 2021, which proposes a minimum wage hike in the Northern Marianas.

This proposed federal wage increase in the U.S. mainland includes the CNMI and is one of the provisions written in the American Rescue Plan Act of 2021, which talks about a $1.9-trillion economic stimulus package unveiled by President Joe Biden. The plan calls for an incremental minimum wage increase to $9.50 per hour, adding $1.50 per hour to the minimum wage every year until it reaches $15 in 2025.

In a letter to Sablan, Chamber president Joe C. Guerrero said the proposed legislation needs to be studied first by the U.S. Government Accountability Office. “This study is to determine the feasibility of a Northern Marianas minimum wage increase and to explore sustainable wage policies for our remote and unique island economy, which is markedly different compared to that of the mainland United States,” he said.

“With the unfortunate and devastating economic effects of the recent typhoons Soudelor and Mangkhut, Super Typhoon Yutu, the downturn in tourism and now the COVID-19 pandemic, there is no better time than now to cautiously approach wage policies that would hinder our gradual and long-term recovery efforts,” he added.

Guerrero expressed the concerns of Chamber members that the wage hike will harm the operations of many businesses. “Since the Raise the Wage Act of 2021 was introduced, our members have reported that if wages were increased as proposed, they would have few immediate options other than to reduce work hours, lay off personnel, or even close their business. A majority of businesses in the CNMI are unable to absorb major shifts in personnel costs on top of the expected price increases from their suppliers and vendors as a result of such a minimum wage increase,” he said.

“Similar to the GAO minimum wage studies and reports conducted in American Samoa in 2016 and 2020, we trust that an independent nonpartisan examination of the Northern Marianas’ economy, gross domestic product per capita, unemployment rate, wages and other indicators would lead us toward a sound policy on minimum wage,” he added.

Meanwhile, the Chamber jumpstarts the 2021 Prevailing Wage Survey starting this month. The survey is done annually to determine the wage rate of majority of workers under different job classifications in the CNMI.