House backs wage board revival

The House leadership has expressed its support for the creation or revival of a wage review board to study minimum wage hike proposals in the CNMI.

“I am in favor of that. I intend to recommend that we should take heed of the recommendation made by the business community for the formation of a wage board,” said House Speaker Oscar M. Babauta in an interview yesterday.

Earlier, the Saipan Chamber of Commerce called on Gov. Benigno R. Fitial to appoint members to the Wage Review Board.

Chamber president Charles V. Cepeda said the board has already been created but it is without members.

“We are …requesting [Fitial] to appoint members of the board so it can begin its work. That’s what we’ve been asking the government,” he said.

He said the wage review board would structure a staggered minimum wage increase to build up to an “island minimum wage.”

The Chamber said various industries should review economic reports and indices that would best determine each industry’s ability to pay and come up with an industry-based minimum wage schedule.

In its position paper, the Chamber also called for reduction and eventual elimination of nonresident workers to strike a balance with resident workers.

House Speaker Babauta said that he is not necessarily opposed to a minimum wage increase, which is currently at $3.05, but he said that “we need to be careful in looking at it.”

“It should allow the Commonwealth to survive. Our focus now is to revitalize and rebuild the economy. Our potential investors will look at it and determine if they can ably afford the cost of doing business here,” said the veteran congressman.

For instance, he warned that the end-user would eventually suffer from any minimum wage hike now.

“When we raise the wage, the end user would have to pay extra. For instance, if you want to build a house, if the construction business pays high for the workers, it will be factored in by the seller. A likely result: the cost would be three times the cost. Those are some of the ramifications,” he said.

Babauta said he will recommend to the House Ways and Means Committee to tackle the wage board issue.

“I know that we had a wage board in the mid ’90s but it’s not been active. I’ll ask the committee to look at it and see if it needs to be revived or there’s a need to form a new board,” he said.

The House Ways and Means Committee has recently held public hearings on the proposed minimum wage increase in the CNMI.