By Haidee V. Eugenio
Variety Assistant Editor

DEPUTY Assistant Secretary of the Interior for Insular Affairs David B. Cohen says the “federalization” of the CNMI is almost certain to occur in the future, but Speaker Oscar M. Babauta and newly installed Saipan Chamber of Commerce president Juan T. Guerrero believe that it is still not too late to block legislation to extend federal minimum wage and immigration laws to the islands.
Cohen, the guest speaker at the Saipan Chamber of Commerce annual installation dinner on Friday at the Fiesta Resort and Spa, said the CNMI is entering a season of transformation much stormier than that for Guam which will see a military buildup.
Guam Gov. Felix P. Camacho attended the Saipan Chamber of Commerce installation dinner, along with CNMI Gov. Benigno R. Fitial and Real Adm. Charles Leidig.
In his remarks, Cohen said “federalization” means a number of different things but what is certain is that the CNMI “will soon undergo a transformation that may rival the transformation that came with the rise of Saipan’s garment industry.”
“Under the worst case scenario, the transformation of this society will be abrupt and painful. I’m sorry to say that, in my opinion, the worst case scenario is much more likely in this case than the worst case scenario usually is. Can there be federalization without strangulation? I’m afraid that we may soon find out,” said Cohen.
Babauta, Covenant-Saipan, said the CNMI will continue to argue that any drastic increase in the minimum wage will cripple the local economy.
He said unlike Guam which will see a major military build up, the CNMI’s garment industry is on its way out while tourist arrivals continue to drop.
Babauta said the CNMI will tell Congress that even though local leaders agree to a gradual wage increase, they also want a federal wage review board established to review the impact on the local economy of the next phase of the wage increase.
Under the Democratic proposal that Congress is expected to pass, the CNMI minimum wage of $3.05 an hour will become $7.25 over a four-year period, increasing by $1.50 in the first year alone.
Once the federal minimum wage increase measure is enacted into law, Babauta said the CNMI can still ask Congress to amend it to ease the burden on the commonwealth.
Guerrero, who was also named the Saipan Chamber of Commerce’s 2006 Businessperson of the Year, said the business organization supports Gov. Benigno R. Fitial’s position that a federal wage review board should be established to conduct an economic impact study on a wage hike.
“If the federal wage review board decides that we can afford the $7.25 then let it be $7.25,” Guerrero said in an interview after the Chamber’s installation dinner.
He said the review board should include representatives from the federal and the CNMI governments as well as the local private sector.
He said it’s not yet too late to block the “federalization” of the CNMI.
“I don’t believe that the Congress does not have the wisdom to consult the commonwealth. I think we have other options. If we are part of the U.S. and we are a commonwealth, then they have the duty to come to us and say, ‘Here is what we are proposing.’ Everything that we do here should be run like a business. It should be justified,” he said.
A former senator, Guerrero said he is still hopeful that when the federal minimum wage hike measure goes to the U.S. Senate, it will take time to evaluate any wage hike for the CNMI.
‘Feds need to know
who you are’
Cohen said the CNMI should have a strong, united voice so that Congress will listen.
“The political leaders in Washington need to know who you are. They need to see your face. They need to hear your voice. You need to introduce yourself. They need to see the human face of the Northern Mariana Islands. I realize that you can’t all afford to just pick up and fly to Washington to meet your leaders. But if you can do it, now is the time,” Cohen said.
He added, “The political leaders in Washington need to meet the people who would suffer if there is a fiscal and economic meltdown in the CNMI. The garment factory owners would not suffer — they could simply move their operations to places where workers get paid pennies and have no rights. Jack Abramoff would not suffer. Tom DeLay would not suffer. The people who would suffer are the people that everyone claims to have sympathy for — workers, small business owners, manamko’, mothers and children.”
The then CNMI’s Washington lobbyist Jack Abramoff and then-House Majority Leader Tom DeLay, R-Tx., succeeded in blocking “federal takeover” measures introduced in Congress from 1996 to 2006.
Cohen said the new Congress has expressed interest in federalizing immigration in the CNMI although the timing and terms of any immigration federalization legislation is not yet clear.
“What I do know is that the U.S. Senate has given my office a lengthy homework assignment — 24 complex questions about labor and immigration in the CNMI, due January 26. A hearing is likely to follow shortly thereafter. To state the obvious, federalization of immigration could also have a profound impact on the CNMI economy,” he said.
Cohen said those who are leading the charge for federalization should actually be given a great deal of credit because it was their pressure several years ago that led to very significant improvements in labor conditions and protections for the CNMI’s guest workers.
“Just as people like Congressman George Miller deserve credit from the CNMI, so too should they give credit to the CNMI for the progress that has been made here in recent years. Conditions here are far from perfect, but they have improved to the point that this is now a place that deserves to be defended,” he added.