Minimum wage: $7.05

The CNMI minimum wage will increase again by 50 cents effective Sept. 30, 2017, boosting the minimum wage to $7.05 per hour, up from the $6.55 per hour set last year.

This is the penultimate, federally mandated increase in the Commonwealth’s minimum wage. It will get a 20-cent hike in September 2019 and reach the federal level of 7.25 per hour.

According to Commerce Secretary Mark Rabauliman, this wage increase should not come as a surprise to business owners and employers as everybody has been made aware of the wage increase timeline.

“The ultimate goal is to reach the $7.25 [federal level]. That was the goal that was set then when [Congress] imposed the minimum wage increase,” he said.

He does not expect the minimum wage to stay at that level, coming on the heels of other states in the U.S. mainland also raising the federal minimum wage level.

“A lot of the states have increased their minimum wages and I think Guam is following suit. You would expect the same with the territories at some point. I don’t know if it’s immediately after we reach the $7.25 or if it will be given some breathing space,” Rabauliman said.

The latest minimum wage increase is covered by the Fair Minimum Wage Act of 2007, which amended the Fair Labor Standards Act, increasing the general federal minimum wage since 2010 in American Samoa and the CNMI.

That law carries a provision where minimum rates in these territories will increase by 50 cents an hour each year until they reach the minimum wage level of the U.S.

The Fair Minimum Wage Act of 2007, which was made into law under Public Law 110-28, initially increased the CNMI’s minimum wage by 50 cents, from $3.05 an hour to $3.55 an hour. A year after, another 50-cent increase boosted that to $4.05 an hour.

In May 26, 2009, the minimum wage was raised by another 50 cents, boosting it to $4.55 an hour.

On Sept. 30, 2010, the minimum wage increased to $5.05 per hour. Then a new law put off the scheduled minimum wage increase in 2011 and mandated a new timetable for the increases.

In Sept. 30, 2012, the minimum wage increased to $5.55 per hour and that rate stayed the same in 2013.

On Sept. 30, 2014, the minimum wage increased to $6.05 per hour before being delayed again in 2015.

On Sept. 30, 2016, the minimum wage increased to $6.55 per hour.

This year, a new minimum wage of $7.05 an hour is set to be effective next week.

The delays in the wage increases were made at the request of the CNMI. “We skipped some years of increase brought about by our economic depression. The federal [government] helped us alleviate from that pressure, so we had some years of delays,” said Rabauliman.

The department is aware that between big and small businesses in the CNMI, the latter will more likely feel the effect of higher operational expenditures.

According to Rabauliaman, the department does not want to lose small businesses and they are encouraged to step forward, speak up about the increases, and be known to the department.

“We want them to know that there are programs and agencies available to assist and see what we can do together. We want to them to step forward because it’s hard for the department to know who is struggling and who is not struggling,” he said.

By following the wage increases set by law, Rabauliman said the CNMI is showing the rest of Micronesia that economic stability and development is possible for all islands.

“We are in the Micronesian region and our neighboring islands in Palau and Marshall Islands are looking at the economic expansion that the CNMI is experiencing right now because if you go there, their minimum wage is still back in the days where the CNMI used to be,” he said.

“I say this with enthusiasm. Increasing our wages, giving people spending power and a good source of income gives the government and people of other islands target goals. At the end of the day, we are all Micronesians and we want to see everybody succeed. That is important to us,” he added.