According to the GAO’s report to the U.S. Congress, the wage hike also narrowed the gap between lower and higher paid workers.
“Hotel human resources staff said that local workers were learning how to plan rather than live from paycheck to paycheck, as their income earned became more significant,” the GAO said in its report.
“The hotel staff told us that as the workers’ spending power had increased, they had become more careful in budgeting their expenses. Other local workers also indicated that the higher wages had helped their families better cover their living expenses. However, discussion group participants said local workers needed additional training to replace foreign workers. Workers participating in discussion groups expressed concern that it is difficult for locals to find jobs because many local workers lack skills needed for minimum wage jobs previously held by foreign workers,” the report added.
It said local workers are in support of higher private sector wages but concerns were also raised about the impact on prices of commodities.
“Some workers…said they were uncertain whether increases in labor costs due to the minimum wage increases had been responsible for price increases,” the report said.
From $3.05 an hour, the CNMI’s hourly minimum wage was raised to $3.55 in 2007 following the enactment of a law applying the Fair Labor Standards Act to the islands.
That law mandates yearly wage increases of 50 cents until 2015 to make it at par with the federal rate of $7.25 an hour.
The current CNMI minimum wage rate remains at $4.55 and will be increased to $5.05 by Sept. 30 unless Congress enacts a new law that mandates otherwise.
The Fitial administration wants the wage hike law suspended.
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