Pros, cons of .50-cent wage hike

The CNMI minimum wage increased by 0.50 cents last Friday, a federally mandated law that aims to have it at the same level in the United States of $7.25 in 2018. The minimum hourly rate is now $6.55 from $6.05, with another 0.50-cent increase expected next year and 0.20 cents in 2018.

This is the seventh increase since 2007 when a Democratic majority-led U.S. Congress passed the Fair Minimum Wage Act of 2007 that increased the CNMI minimum wage from $3.05 to $3.55. The CNMI Department of Labor’s website also posted a reminder to all employers of the wage increase.

Rep. Angel A. Demapan (R-Saipan), however, has a pending bill in the CNMI Legislature that aims to bypass the annual 0.50-cent increases. House bill 19-23 aims to increase the Commonwealth minimum wage from $6.05 to the national level of $7.25 at once.

Gov. Ralph DLG Torres said he’s waiting for the House and Senate to pass Demapan’s minimum wage bill and wants to sign it right away. HB 19-23 is currently in the House Ways and Means Committee chaired by Rep. Antonio P. Sablan (Ind-Saipan).

Employers like Lito Mendoza and Ms. Xu said they would follow what the law says. Other business owners and managers asked by the Saipan Tribune to comment on the minimum wage hike declined to do so, as well as a number of employees that are mostly working as commercial cleaners, store clerks, and construction workers.

There are also unconfirmed reports that some business establishments would either cut the working hours of their employees or would no longer allow them to work overtime.

“We’ll just follow what the law says, because it’s the law,” said a visibly annoyed Xu, a grocery store owner, when asked by the Saipan Tribune.

Mendoza, on the other hand, said that although it would be a bit difficult for other companies, the current economic climate sees fit for an increase. “The economic situation now is a lot different a few years ago. It is a bit difficult for some businesses but there’s a law that we need to follow.”

Mendoza, an architecture graduate from the Far Eastern University in the Philippines, owns landscaping firm Tropex Garden that worked on several projects like the Oleai football field and Laolao Bay Golf & Resort. Their latest landscaping project is the conversion of the Puerto Rico Dump into a park.

He said they’d pass on their workers’ salaries on every project that they bid on, whether government or private projects. “What we would do now is to also adjust the amount of our bids since we have to include our workers’ salaries.”

“We anticipated the minimum wage issue here at Tropex Garden since we know that it would increase. Labor costs will also now be inserted to project proposals that we’re going to submit. Whether it is a government contract or a private firm,” added Mendoza, who arrived in the CNMI in 1975.

Sophia Bontijao, who has been on Saipan for 25 years as a supervisor in several garment companies, welcomed the minimum wage hike but added that prices of basic goods have started to also rise.

“As a contract worker, we welcome the increase. It is okay and timely. But the prices of commodities will also increase so it looks like it is also not enough. It would be nice if the minimum wage increases but the prices would remain steady,” said Bontijao. “It would be okay for minimum wage earners if prices of basic goods would only gradually increase.”

Mami Ikeda, an active community volunteer, said it is just fair for the minimum wage to increase to $6.55, with some employers already paying their workers higher wages. “Foreign workers have been taken advantage of for too long.”

“I think that minimum wage could go as high as people wishes to, people just have to be ready for hikes on retail prices, service/labor fees, everything you buy or hire.”