Businessmen tighten belt to cope with economic slump

Thirty-two percent of 71 companies surveyed by the Saipan Chamber of Commerce had cut back work hours to cope with the sharp decline in the island’s tourism economy, according to a survey released by the business group.

In the past two years, when businesses in the island started to feel the pinch of the crisis spawned by Asian-wide currency crunch, 474.5 jobs had been eliminated after employers imposed the freeze-hiring policy aimed at paring down cost of operations.

The 71 companies who responded to the survey represented 56 percent of the total Chamber membership, and 54 percent of the respondents said they have no plans of expanding while the economy remains in distress

The business organization explained that all government and honorary members were not included in the survey. Duplicate responses were not incorporated in the findings.

Based on the results, 1, 982, or 67.3 percent, of the jobs in the private sector are held by nonresident workers, while 29 percent by U.S. citizens, and 7.8 percent by Micronesians.

Out of the 2,943 workers employed by the respondents, 187, or 6.35 percent, are locals or U.S. citizens who are in management position.

Some of the respondents said they will only expand depending on the improvement in the economy. However, some would like to hire additional workers and acquire new equipment to expand market service.

Asked if their companies would suffer when the minimum wage is increased to the U.S. standard of $6.15 per hour, 54 percent said yes. Forty-two percent said they would not experience difficulties at all, while 4 percent did not respond.

Some of the comments given by the respondents said they would not mind any increase in minimum wage as long as the mandated benefits are no longer required. Those who are in wholesale and retail business said they would simply pass on the increases to consumers if the minimum wage is increased, while others said their company would cease operations in the CNMI since the customer base would diminish.

An average of 58 respondents said their company’s minimum wage for local residents is $5.06 per hour. On the other hand, an average of 47 respondents said the minimum wage for their alien workers is $4.01.

Seventy-two percent of the companies said they have training programs in place for local employees. Only 20 percent said they do not have any training for local work force, while 8 percent did not respond.

In the past two years, none of the 71 companies have had complaints filed against them for violation of wage and workhours. Six companies reported having had OSHA complaints while three reported EEOC violations.

Unfortunately, the Chamber survey failed to get responses when asked about the per dollar value of benefits to their employees as members apparently did not understand the question.

Some responses include health benefits, life insurance, 401K plans, bonuses, offering government holidays and other vacation incentives as well as annual increase.

Companies offered from a range of .50 cents per hour additional to the $2.25 per hour benefits added to their hourly wages.. Members offered a range of $30 to $800 in benefits per month added to their monthly wage.

Next year, the Chamber will prepare a Comprehensive 2000 Business Census to achieve as close to a 100 percent response rate.