Chamber open to increasing minimum wage past $6.55

Against criticism, Saipan Chamber of Commerce president Velma Palacios said yesterday that local businesses are not suppressing wages to the detriment of attracting more local workers and that in fact, a majority of businesses have been paying dollars higher than the minimum wage to retain much needed workers in a growing economy and against competition from new developers.

Palacios also said, responding to questions from Saipan Tribune, that they are open to a push through the local legislature to raise the local minimum wage even higher than the set increase of $6.55 this September, jumping a couple of rungs up the ladder on the increases set every two years until the CNMI reaches the federal minimum wage of $7.25.

She told Saipan Tribune that staff from the Office of the Governor and the Chamber are trying to meet to discuss a possible increase in the minimum wage.

“I definitely would support that. But again, the only concern would be with those small and pop businesses.”

“Most people are already paying that $7.25,” she went on to say. “Like at the Chamber, our starting is $8. But in order to compete, we need to increase our wages.”

To criticism against business leaders who think the CNMI does not need its contract workers and can hire more local or U.S. workers, Palacios says this is flatly untrue.

“We don’t believe that. Because with all these development going on, we need help, whether it is temporary construction workers, we need people to help us. We don’t have the local resources. Even though we train everybody, we still would need help,” she said.

“There are critics out there that think we don’t. They think the business community is suppressing wages. But we are not suppressing the wages. In fact, a lot of our members are paying more than $6.05, are paying more than the $7.25, the federal wage. And they are also trying to keep their employees. Everybody needs workers now so we want to keep them.”

She believes businesses are increasing wages because of the higher wages the Saipan casino, Best Sunshine International, Ltd., has been offering, so they can keep their employees in place

“It’s competitive right now. Everybody’s looking for people, for workforce. You want to maintain, retain your employees and the only thing is wage, benefits, and all that. So a lot of people are not paying that $6.05.

Asked if she felt the business community was ready for the 50-cent raise in minimum wage come September, Palacios again said most business are already paying beyond the $6.55 wage that will take effect.

“So I think most businesses are prepared for that,” she said. “There are businesses, those very small businesses, that may not be able to handle that but a majority of the businesses should have no issues with that $6.55”

As far as the $.50 increase Department of Commerce Secretary Mark Rabauliman, who gave an update on their prevailing wage survey at a Chamber meeting yesterday, said this will be reflected on smaller-end businesses as a lot of the bigger businesses are already paying above minimum wage, in terms of its impact.

By impact, he gives the example of mom and pop stores hiring high school workers for work after school at $6.05, the minimum wage, having to adjust to the 50-cent increase and finding ways to cut costs, for example.

He said in prior increases, business sector had called it detrimental to their bottom line, but “to date, I think everybody is rolling with it.”

“As far as impact I can’t really say. But everybody seems to be gradually implementing a lot of that,” he added.

To critics of government and businesses that they are not pushing for higher wages, he said that when comparing the CNMI to places like California or Hawaii or even Guam, “it does skew” the argument “because theirs is higher pay wage.”

“But in terms of our island economy, I think we are staying in pace to reach that $7.25 without really damaging our fragile island economy especially the business sector,” he said.

As the CW crisis continues…

As the contract worker crisis continues with no news from the federal government on requested “administrative fixes” to alleviate the strain of 1,300 foreign workers being forced to leave the CNMI by the end of this fiscal year due to their applications being rejected against a breached CW cap this year, Palacios and Rabauliman said they continue to hear from the affected on the issue.

Palacios said, relaying information from Marianas Visitors Authority managing director Chris Concepcion, that there concerns with dive operators—who play a part in reviving the Japanese market—having to close shop amidst the CW crisis.

“They are going to leave. They are going to shut down because they don’t want to be outside of status unless we do some immediate relief.” She added that employees have been making plans to exit and a humanitarian aspect still remains with what the affected have to do with their kids. “Most of them are leaving. And some of their employers have already started putting in new applications for the fiscal year 2017” cap,” she said.

She continues to encourage employees to apply under the H-visa category “for those who can.”

Asked how the CNMI government might gauge the impact the departure of contract workers has on the economy, Rabauliman pointed to a “household impact expenditure survey”—geared to begin preliminary survey by the end of this year—that he believes will capture a picture of this impact.

While he hears from the business side of the community about tens of staff leaving the island and while he acknowledges it does impact the economic landscape in terms of taxes, services, for example, he says as for direct impact, he hopes the HIES will give a clear picture.

“Because all of this right now is supposition,” he said.

Asked about revenues collected by government, he said this information would belong with the Department of Finance but said he expects to see impact to be for the next fiscal year.

Prevailing wage update

Rabauliman told the Chamber members yesterday that they would start the prevailing wage survey, from their central statistics division, by Nov. 1, a month after the minimum wage increase kicks in.

He said it would be premature to do a survey without the increase in wage set.

Rabauliman told Saipan Tribune changes to this year’s survey would be based on recommendations from participants who balked at questions in 2012 and 2014 surveys.

“Some of the questions were very lengthy and bulky so we might drop those,” he said.

The survey would be geared to businesses and also government to get mean, the median, and high end of wage pay,” he said.