sector a breathing room as it tries to get the island’s economy back on track.
Saipan Chamber of Commerce Doug Brennan said in yesterday’s meeting at the Saipan Grand Hotel that the “reprieve” means a lot especially for the two largest business groups in the CNMI — the Hotel Association of the Northern Mariana Islands and the chamber.
“The reprieve means that at least one government recognizes that our economy is on the rocks and businesses and consumers cannot afford additional costs right now,” Brennan added.
He said over the past three years, “the minimum wage in the CNMI has risen an unprecedented 66 percent in the face of a spiraling economic depression.”
Brennan said the minimum wage increases can be absorbed if the economy is stable and if businesses are expanding.
“As it is right now, the minimum wage increase is costing loyal, hardworking individuals their jobs as businesses shrink and close,” Brennan said.
He noted that payroll is a major cost of operations.
On Thursday last week, President Obama signed into law a measure delaying the annual 50-cent minimum wage hike in the CNMI that was supposed to take effect in 2011.
HANMI and the chamber of commerce earlier asked for a moratorium in the next round of wage increase in 2011.
Last Sept. 30, the 50-cent wage hike took effect, bringing the local rate to $5.05 an hour from the previous $4.55 an hour.
A U.S. law enacted in 2007 requires a yearly 50-cent increase in the local rate until it reaches the federal level of $7.25 an hour.
The U.S. Government Accountability Office has warned that increasing CNMI labor costs will only cause companies to cut back on jobs or reduce their investments.
Brennan, in his remarks yesterday, also mentioned other key issues that the chamber wants to be addressed, starting with the proposed business license fee hike and the quest for an educated workforce.
