THE government’s plan to implement a tiered wage system patterned after the American Samoa model will not necessarily increase but may even lower the minimum wage of the garment industry, according to Gov. Juan N. Babauta.
“It is not meant to increase the wages for garment workers, as you read in the paper,” he said. “And in fact, my theory is, it would even lower the salary, it would give the industry a break. So that’s what I like to see happen,” said Babauta in an interview on Friday.
Babauta said that “one of the biggest concerns” faced by the CNMI is the full implementation of the new rules in trade liberalization under the World Trade Organization and the General Agreement on Tariffs and Trade.
He said these are “external forces that we have no control over.” But he said the government may help cushion its impact on the garment industry by introducing legislation in the U.S. Congress “for an industry tiered salary level.”
“And I think with that, it will give the industry relief in the proposal for higher wages here in the CNMI because then, the wages will be done on an industry by industry basis. So that to me is the biggest support that we can give to the industry,” he said.
The governor said he was “looking forward” to working with the garment manufacturing association, the hotel industry and the Saipan Chamber of Commerce and “get their support of having this legislation introduced in the U.S. Congress to provide us authority to do tiered wages here in the CNMI.”
The Saipan Chamber of Commerce earlier said it would support a proposal to implement a tiered wage salary based on the American Samoa model.
Under the American Samoa tiered wage system, the minimum wage rates are determined by a special industry wage committee.
The panel will recommend to the administrator the minimum wage rates that will not give any industry in American Samoa, a competitive advantage over any industry in the U.S.
Critics of the local garment industry, however, say the low wages it pays to alien workers give it an unfair advantage. CNMI products are labeled “Made in the U.S.” and sold in America but are cheaper than the garment products made in the U.S. by workers who receive the federal minimum wage rate.
