H-2B workers on Guam do not pay the FICA tax because their maximum period of stay is three years only. (Some can be readmitted, but subject to the approval of the feds and only after exiting for three months.)
Like the H2-B visa, the CW-1 classification that will be granted to CNMI foreign workers is temporary and ends on Dec. 31, 2014. Yet these CW-1 workers, who get less than their H-2B counterparts on Guam, must pay the FICA tax. How is that fair? And why shouldn’t CW-1 workers and their employers complain?
Some CNMI politicians say the imposition of the FICA tax on guest workers will motivate employers to hire more locals. That’s something local voters would want to hear. But like most politically motivated statements, it isn’t true.
If a guest worker has to pay $45 a month in FICA tax, that’s a total of $540 a year. (Almost a month’s pay for a lot of guest workers whose hours have been cut.) It will further reduce the amount they spend in the CNMI. That’s not good for the local economy.
If an employer’s share is $62 a month, the annual total is $744. Would an employer give up a trusted, productive and dependable employee to avoid paying that amount? Of course not. Most likely, employers would try to cope with this new, punitive and discriminatory burden by further reducing work hours and/or passing the cost to consumers. Again, how will that benefit the local economy? Or even the federal government whose gross debt is over $15 trillion?
Ah, but it would be bad for foreign workers and their employers. So it’s all good?
***
Others say cheap labor “depresses wages.” This is an argument usually heard in a prosperous society like the U.S. but is meaningless in the CNMI.
There’s a reason why wages are high in the states and low here. They’re wealthy; tiny and far away CNMI — despite its government pay scale set by politicians — is not.
You don’t tell a poor person to spend money he doesn’t have for the “common good,” but that’s what wage hike proponents are saying. Unlike the CNMI government, however, the local private sector must pay upfront for most of its expenses. A wage hike in this horrible economy is another additional cost. How can employers pay for it?
When this newspaper advocated for a wage hike, the economy still had a garment industry with a gross revenue of $1 billion a year and annual visitor arrivals that almost reached 800,000; the figure now is around 300,000. CNMI lawmakers passed a gradual wage hike law only to repeal it later — at the behest of the garment industry.
A wage hike now will be another hardship inflicted on a struggling private sector. Although some people relish the idea of “socking” it to (nonvoting) foreign workers, it is their employers who pay for the existence of the CNMI government. You make the private sector suffer, government employees (voters) will feel the pain, too.
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After KSPN 2 and the Variety reported about Jack Abramoff’s new book last November, I was asked by some of our readers about my opinion regarding the former überlobbyist’s take on CNMI issues. I had personally met Jack and I was covering Capital Hill when he was still lobbying, basically, for the Saipan garment industry.
He wasn’t hired just for the heck of it. CNMI officials felt they needed Jack, who had close ties with the U.S. GOP, because after the party took over the U.S. Congress in 1995, Republicans led by California Congressman Elton Gallegly wanted to end local minimum wage and immigration control.
Then-Governor Froilan also hired a Democrat, former Hawaii Gov. John Waihee, to work on the Clinton administration, but to no avail.
These are not minor details, but no one else seems to remember them.
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