GAO wage study delayed

Under the stimulus package signed into law by President Obama yesterday, a report on the impact of the minimum wage increase in the CNMI and American Samoa has been pushed back one year to 2010, a move that disappointed the Fitial administration.

Gov. Benigno Fitial had lauded the inclusion of the study, which will look at the effect of the minimum wage increase in the CNMI over the last three years, in the Senate version of the American Recovery and Reinvestment Act. Under that version, Congress would receive the first 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.

“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,” said Charles P. Reyes, Jr., press secretary for the Governor’s Office.

But, he added, a study by 2010 is better than no study at all.

The law instructs the Government Accountability Office to assess the impact of the minimum wage increase on the employment and living standards and estimate the impact of any further wage increases.

“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.

Meanwhile, CNMI delegate Gregorio “Kilili” Sablan said he does not want to co-sign a letter that asks for a suspension of the wage increase until a study can be conducted.

Last week, Fitial called on the delegate to join him and Senate President Pete Reyes in asking U.S. House Education and Labor Committee chair George Miller for a suspension.

Sablan said he wants to wait to see the results of an objective study before deciding how to approach the matter.

Fitial is disappointed the CNMI and American Samoa failed to receive Sablan’s support, press secretary Reyes said.

“[Sablan] did not have to ask for a suspension. He could have asked for a study to guide suspension or further increases. Instead, he did not join American Samoa and the Governor of the CNMI, and he did not ask for anything regarding the federal minimum wage, which is a very serious economic issue for our economy and for struggling businesses right now,” he added.