‘Legitimate businesses just trying to survive’

Saipan Chamber of Commerce president Douglas Brennan said legitimate businesses are just trying to survive right now, though he said the business community gets slammed in the media as being an evil entity that does not want to increase the pay for their workers.

The CNMI’s minimum wage is now $5.05 an hour and is scheduled to increase by another 50 cents next year by federal law.

“I do understand there are many businesses out there that treat their employee poorly. Chances are these are the same businesses that underreport their earnings to avoid paying their fair share of taxes or simply operate under the ‘radar’ without a business license,” Brennan said in his message to Chamber members and guests on Wednesday at a general membership meeting.

The Chamber is the largest business organization in the CNMI with some 150 members.

He cited a recently released First Hawaiian Bank economic forecast for the CNMI. That report says weak tourism numbers further aggravated by the earthquake and tsunami in Japan in March, coupled with increasing labor costs and rising fuel and shipping prices, have conspired to further weaken an already struggling CNMI economy.

Brennan, general manager at Microl Corp., also enumerated a “myriad of hurdles” facing the CNMI, including a decline in population which is the customer and workforce base, declines in tourism, and declines in tax revenue to the CNMI government.

These, he said, are exacerbated by increase in utility rates, fuel costs, shipping costs, labor costs, and the overall cost of living.

“Finding solutions won’t be easy,” he said, citing the business community’s cost-cutting measures over the past several years that include reducing business hours, laying off employees and in many cases closing down the business entirely because it is no longer profitable.

Brennan reiterated the need to work together to make the CNMI a “business friendly” environment.

“For years, the Chamber has offered commentary and suggestions to the government. More often than not, those words have fallen on deaf ears. I do applaud Governor Fitial’s efforts in trying to bring renewable energy resources to the CNMI. That is a start, but we need to bring those efforts and other efforts to fruition,” he said.

He touted the Chamber’s increased involvement, including what it did with the conduct this year of a prevailing wage study that was never done before.

Lastly, Brennan listed items that a business person would consider about a potential location to invest in, including reliable power, water and wastewater services; streamlined processing of investor papers; favorable tax structure; adequate customer base; adequate and educated workforce; fair and equitable enforcement of laws; fee simple ownership of property; clean environment; convenient air service; and reasonable shipping rates.