Thursday, January 31, 2008

Minimum wage retort

Want to read a good joke? Try downloading U.S. Labor's minimum wage report on American Samoa and the Commonwealth of the Northern Marianas. Don't take my word for it: check it out for yourself.


Still with me?

Whether you're for it or against it, this product is lame. The two main points from the summary: "1. Short Time Frame. The reporting time-frame specified in the legislation – no later than 8 months from the date of enactment (May 25, 2007) – did not provide sufficient time to observe actual effects of the minimum wage increases"... and "2. Lack of timely labor market data ...The lack of such data for American Samoa and the CNMI significantly impairs efforts to measure or to project the impacts of scheduled minimum wage increases for these territories. It was not feasible to conduct field investigations in connection with this study."

Minimize the minimum (Panglossolia)

If you're agin raising the minimum wage you read "With both of its major industries declining simultaneously, the CNMI economy is in overall decline, and its current economic situation makes it especially vulnerable to additional shocks. While data are not available to precisely quantify the impact of the recent and scheduled future increases in the minimum wage, it seems likely that the current economic decline may be made worse. General experience in the U.S. and elsewhere has shown that potential adverse employment effects of minimum wage increases can be masked or offset to some degree by an expanding economy that is generating net employment growth. No such offsets can be expected in a declining economy."

Stay the course (Damn the torpedos, full speed ahead)

If you're fer a higher minimum you find this nugget tucked away in the back of the report: "Some recent U.S. research regarding the effects of minimum wage increases suggests some positive employment effects when increases are associated with labor markets characterized by a degree of monopsony power." Dictionaried, monopsony means "A market situation in which the product or service of several sellers is sought by only one buyer."

Don't confuse me with the facts

Strangely, the
Saipan Tribune chickened a little. You'd almost think they had a vested interest in a low minimum. My buddy Dick Pierce, the governor's office and the Chamber of Commerce each get a day to wring their hands. Nobody is asked to express another point of view. Huh. I guess the 'majority' opposes the minimum wage as part of that federalization bundle.

Monday's article included this gem "Increasing the CNMI wage to $7.25 an hour, the report said, is comparable to raising the U.S. minimum wage to $16.50 an hour." Not exactly. The report said "The scheduled increase in the minimum wage to $7.25 (by 2015) will likely affect at least 75 percent of wage and salary workers in CNMI. By comparison, in order to directly affect 75 percent of U.S. hourly workers, the minimum wage would need to be raised to $16.50, the 75th percentile mark for wage and salary workers who are paid hourly rates." Lies, damn lies and statistics, the man said.

Tell me what I think

So who can we believe? Try yourself. What did you think about the minimum wage before this shelf-filler came out?

Or, heh, me. I think the jury's still out. I've maintained for years that a higher minimum wage in the CNMI would be great for small businesses because the majority of people would have more disposable income. Unfortunately, higher energy costs have sucked up the loose change from the cushions so we may never know.

There are already too many quotes, but I'll add one last tidbit from the report: "In 1980, the CNMI per capita income of $3,298 was 32.5 percent of U.S. per capita income of $10,134, and in 2000, the CNMI per capita income of $9,151 was 30.7 percent of U.S. per capita income of $29,855.33." It's pretty obvious that the old model wasn't getting us to a U.S. standard of living.

Fifty cents this year? Yeah, maybe, probably. Then how about a real study when there are results to analyze? I'll bet they've already shelved this treewaster and forgotten about the subject.

Friday, January 18, 2008

Leaving on a jet plane

Hope you caught UMDA: We're not a buy-and-sell firm in Friday's Saipan Tribune. Hey, if you can encourage a major air carrier like Asiana to come in and make a few bucks at the same time... why not?

Besides, now they've moved on to the moribund Hotel Nikko: the last memento of Japan Airlines' messy breakup with the CNMI. Well, almost the last. There's still that white elephant across the street. We can only hope the government has learned something. Yes we can.

Glad somebody is doing more than yodeling 'more flights, more flights' and then bitching about Washington.

I Ain't Marching Anymore

But that's the thing, instead of doing what you can locally, it's easier to worry over what [has been, is being, will be] decided there. Those folks are worried about their constituencies, and, within reason, what they think is right.

Bread and circuses cost money, so any distraction is welcome. I know, let's have a (motorcade) rally. (I'd link to the Marianas Variety, too, but I don't want to have to change the link tomorrow).

Honk if you hate federalization. That word makes for great spin. Kind of a loose canon. It brings out images of the National Guard posted on every corner. No wonder those States Rights rednecks bought into it. I've been searching for a more neutral term, but no luck so far.

And people still insist on asking whether I think it's a good thing. I still answer "I dunno." The minimum wage raise was years overdue and came at precisely the worst time. I don't expect the feds to do a bangup job with immigration, so I suppose the question becomes 'can they do worse than the local government'. I dunno.

The whole idea of 'guest workers' is built on a faulty premise: that the government can interfere in labor markets without messing them up. Too many workers and the minimum wage becomes the de facto wage. Too few workers and you strangle businesses. Both sides expect the government, here or there, to have the answers. Oh Kay. I'll sell that, but I won't buy it.

BTW, there's a book making the rounds that I highly recommend: "Nobodies: Modern American Slave Labor and the Dark Side of the New Global Economy" by John Bowe. I borrowed it from brother Jas in passing. Reads quick, has interesting arguments and the part about Saipan is done pretty well. Maybe I don't buy Dick Pierce as elf and Pam Brown as pixie, but those are just quibbles.