By Moneth G. Deposa
Variety News Staff

THE passage of the federal minimum wage hike measure will result in the closure of “fairly large businesses” in the CNMI, according to Press Secretary Charles P. Reyes Jr.
He said the administration is gravely concerned about the bill’s inclusion of the CNMI.
“We would like to congratulate the new Democratic leadership for passing a minimum wage increase for mainland American workers,” Reyes said in an e-mail. “We believe the U.S. economy is so strong that it can sustain such a minimum wage increase without suffering from inflationary pressures or significant unemployment. In fact, many Western European countries already have minimum wage rates that far exceed America’s national minimum. We are, however, gravely concerned about the bill’s inclusion of the CNMI and whether our weak, fragile, and vulnerable economy can sustain such a sharp and steep set of wage increases.”
He added that “all businesses, even some fairly large businesses, have assured us that they will no longer do business in the CNMI if the minimum wage is $7.25 per hour.”
Reyes said the administration is urgently hoping that the U.S. government will ultimately make some significant concessions for the CNMI in view of the current economic crisis here.
“The CNMI economy is obviously nowhere near as strong as the U.S. mainland economy,” he said.
Speaker Oscar M. Babauta, Covenant-Saipan, said the “drastic passage” of the wage hike measure may result in “more chaos” for the commonwealth.
“We’re hoping that (Congress) will realize the big impact it will have on our present ailing economy,” he said, citing the effect of the recent closure of Saipan’s biggest garment factory, Concorde Manufacturing Corp.
“That closure means a $10 million loss in our 2007 fiscal year budget and if we raise the minimum wage I can’t imagine what else would not be affected. I hope they will realize those factors,” he said.