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.

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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.

10 comments:

Saipan Writer said...

Thank you, thank you, thank you! I couldn't find this report and I appreciate that you did and shared it. I also like your quick summary and (in)digested version of what it all means.

Saipan Writer said...

I forgot to add--you should send this blog post as a letter to the newspapers. It's informative (especially the --lies, damn lies, and statistics--comment!)

lil_hammerhead said...

Great post. The Saipan Writer is right.. this should be submitted to the papers.

lil_hammerhead said...

Hope you don't mind.. I linked you.

KAP said...

Nah, newspapers seem so...
20th Century. Besides I really don't want to stick my neck out too far when people's juices are churning. I just never liked State Secrets.

If someone wanted to pay me it might be a different story, though I've noticed most columnists and commentators try so hard to stir the pot that they soon become parodies of themselves. Their own Colbert, as it were.

Oh, thanks for the linkj, I added you a few days ago. I was going to call yours Mackie Messer, but all of the local German speakers have died off.

Jeff said...

Actually I think columnists seem to go out of their way not to stir the pot. At the Tribune, the only one of their many columnists even mildly controversial is Bruce, and as Angelo notes, he's Saipan's number one bat shit crazy haole.

KAP said...

Nothing personal, but I was talking about the fish in the big pond, not anybody locally. They set the standard.

And you almost trapped me. I had already written my hit on many of the local writers when I caught myself. S-s-sorry, it's been expunged; I don't want to go there.

Jeff said...

You mean there is a world past Marpi?

KAP said...

I dunno. We've sent out explorers and they never come back.

PNGed twice said...

Chamberonomics XXXII...wages

Who is in favor of keeping CNMI minimum wage artificially depressed? I cannot think of anyone, any group, or any organization wanting to keep our wage structure down except greedy companies wanting to profit on the backs of an indentured worker labor force. I cannot think of a better way to hurt local indigenous graduates of our high schools and college than to keep our wages low. This is not a guest worker issue. Guest workers have no vote or say in minimum wage issues. Blocking a wage hike would have a disastrous effect on our island and would guarantee that another generation of our high school graduates will have limited options and opportunity.

Under these depressed wages, our future graduates will have the same four choices they currently face –to join the US military, move to the mainland, sign up for US federal assistance, or work at the local gas stations/restaurants on an unlivable wage, even lower than guest workers, who receive housing and medical benefits.

Federalization of labor and immigration, an improved standard of living, an improved quality of life, an improved investor environment, an improved economy, and a minimum wage that our children can afford to feed families and pay power bills on are certainly tied together. Stifling the first minimum wage hike in a generation will doom any thought of an economic recovery.

Who will benefit from a low minimum wage? I would expect that big business here would continue to make big money. Would our largest employers close under a minimum wage increase? No, I feel assured that the Hyatt, Fiesta, PIC, World Resort, PTI, and Duty Free will not close even if our minimum wage was S12.00 per hour. What business will be hurt by a substantial increase in wages? Our worst employers that litter Beach and Middle Road with laundries, pawn shops, and decrepit convenient stores may close. Who owns those affected stores? They are owned and operated by alien investors. The recent zoning law in Saipan was a huge step forward for the commonwealth, but blocking the minimum wage increase would be two enormous steps back.

Big business here has long exploited the good nature and laid back attitude of our indigenous populace to lead them around like sheep. The struggle here has never been between the US and islanders, but the struggle for islanders to take back these islands from big business. Judging by those in attendance at the TTT anti-federalization rally, it would seem to me that, many of the supporters of a 'freeze' on the minimum wage were in attendance. It was my understanding that the Fitial administration, the chamber, and HANMI were well represented in the crowd of 150, if not sponsors.

The U.S. Department of Labor report entitled, The Impact of Increased Minimum Wages on the Economies of American Samoa and the Commonwealth of the Northern Marianas Islands apparently conducted interviews with Lynn Knight, President of the Hotel Association of the Northern Mariana Islands(and currently in DC lobbying the minimum wage issue for HANMI); James Lin, President of the Saipan Garment Manufacturing Association; Marian Pierce, President of Duty Free Shoppers; Richard Pierce, Assistant to the Governor for Trade Relations & Economic Affairs in the CNMI; Howard Willens, Special Legal Counsel & Assistant Attorney General, and Office of the Governor in the CNMI. None of the aforementioned group live on $3.55 per hour. Did anyone conduct interviews with local homestead residents in Kagman, Chamorro mothers working in the grocery store, former MHS honors students pumping gas, or Carolinian fathers trying to raise their families on HANMI wages?

The NMI has at least one legislator, Tina Sablan, that has stood in defiance against the big business position of blocking the minimum wage increase and can now be officially called the spokesperson for the rights of the indigenous populace and decent citizens here.

I would like the people of the commonwealth to stand up for my 2,000 former students by putting a stop to this big business block on minimum wages that would sentence another generation of NMI youth to poverty. If there is a rally on this issue, I would love to join the concerted effort.

To quote Chamberonomics I " Henry Ford had a novel concept. He thought if he paid his workers more, they could afford to buy his cars and he added the entire working class to his new and expanded market. Soon every major corporation in America followed suit and the middle class was born. Nineteen garment girls crammed into a tin shack seldom eat out, can't afford cars and are never going to buy a home".

Weathermen anonymous