THIS is to follow up on the recent debate about the minimum wage. I understand those who want no net increase in the cost of doing business at this time. However, I don’t think the tiered system is the answer. Instead, the Legislature should look at the following for increasing the minimum wage:
1. Eliminate all housing, food and on-island travel benefit requirements for non-resident workers (maintain health insurance and round trip airfare requirements to make sure the CNMI does not get stuck with exorbitant cost in these areas).
2. Determine the amount of “cost” this represents on average to employers.
3. Raise the minimum wage by an amount equal to the cost savings.
Let’s assume that the average cost to house, feed and transport an employee is $200 per month (a low estimate, I imagine). This would equate to $1.25 per hour in wages since the average employee works around 160 hours per month. Oh sure, some will say, “contract workers won’t be able to handle this and there will be homeless people and starvation.” To this I say nonsense because it is already being done by some businesses successfully. I have seen this arrangement work out to the benefit of many contract workers. In fact, many workers will be happier as they get to room with their friends and live where they choose, and eat the food they choose.
In addition to addressing the minimum wage issue, this approach will also partially address the problem regarding equal pay and benefits for resident workers. If the non-resident worker benefits are converted to cash equivalent, then resident workers will have equal benefits, except for the insurance and round trip airfare.
Of course, this will result in some increase in the cost of doing business because now employers that have been paying locals the minimum wage with no benefits will have to absorb this increase for local workers. Also, overtime rates will impact employers somewhat. However, this idea could be phased in over time, which could help minimize the impacts. And, it would solve two problems at the same time.
In regards to the tiered wage system that is being advocated by many, I feel that this will do nothing but further enforce the caste system that is already in effect in the CNMI. By this, I mean that essentially our Chinese nonresident workers will be at the bottom (the garment industry), then the Filipinos (the construction industry), then the Micronesians (the hotel industry), and so on and so on. Is this really what we want? Doesn’t anyone perceive this as racist and un-American? Does anyone really believe that a skilled mason who works in the deadly heat all day only deserves $3.05 per hour? You couldn’t get a skilled mason on the mainland U.S. for less than $30 per hour. Of course, we are not the U.S. mainland but there are creative solutions out there that would allow us to raise the minimum wage without a tiered system and without having a significant increase in the cost of doing business. All we need is some creative legislation to start the ball rolling.PAUL BARON
As Matuis, Saipan
