Saturday, May 24, 2008

Raise the local minimum wage?

How many people are still getting the Commonwealth's minimum wage of $3.05 an hour-- or less?

Sure, by U.S. law the local minimum will be $4.05 on May 26. That is, unless the business makes $500,000 or less. That's a lot of employers, including some of our large foreign investors who spin off subsidiaries. We'll talk about whether they could use local firms some other time.

Farmers and fishermen, historically screwed over by federal wage laws, are also exempt. I haven't kept up, how much is that a month?

Minimum effort

The CNMI Department of Labor helpfully flagged these exceptions in a press release published in the Marianas Variety and the Saipan Tribune. As you can see, DOL didn't attempt to estimate how many workers might be affected. The papers just ran the release and I'm not holding my breath until they do a follow-up.

Everybody has been assuming the Northern Marianas is out of the minimum wage game. Not true, we have the same rights as states to set wage rates as long as they don't conflict with federal laws.

The Legislature could look into this, of course. After all, there was a belated attempt to do something to head off the U.S. minimum. Then again, only contract workers are likely to be affected. No votes there.


Wendy said...

KAP, minimum wage in Florida and other states is higher than the federal minimum wage.

Because the CNMI does not provide statistics on how many businesses and occupations/employees are actually exempt from the federal minimum wage it's difficult to gauge an accurate economic impact.

KAP said...

Yeah, I used one of U.S. Labor's charts last month. Basically, it looks like a blue state/red state difference in attitude toward going over the federal minimum.

I don't expect this administration to willingly provide statistics. The press release seems aimed at subtly encouraging businesses to use the local rate.

Bruce A. Bateman said...

The CNMI minimum wage for waiters and other tip based employees is actually higher than that in the US.

Probably a good thing considering the dismal level of tipping around here compared with the generous (some would say ridulous) levels in the States.

It would be interesting to see how many employees work for companies that exceed the 500K requirement compared to the number who don't. Interesting, but not very useful.

Lil' Hammerhead said...

$500,000 or less isn't the only out.. there are a list of other requirements an employer must meet, in order to avail themselves of the "exception".

KAP said...

My point is that, despite all of the heat and noise, nothing has changed for a lot of people.

And you can't generalize about U.S. wages. As Wendy noted, some states have a higher minimum than the federal rate.

Also, service here is often abysmal. I can usually get pretty good tips if I'm behind the bar--often better than employees with more obvious assets for a mostly male clientele.

Bruce A. Bateman said...

Yeah, Ken, but you're using a penknife to cut their wallets open.

Seriously, you have a point about poor customer service. It tends to be dismal in the tips-for-service categories and even worse in the straight service job categories. There are some notable exceptions.

That said, the propensity for folks to tip here and elsewhere is a lot less than for pay-em-even-if-they-suck Americans. I’ve seen waiters stiffed in nice restaurants here after having performed flawlessly. Not fair by US standards, but if done by someone from a country where tipping is minimal, if at all, I suppose they can choose to tip or not as they choose.

The point of all that rambling is, I don’t think there are many places around here who would find themselves successfully paying the lower ‘service staff’ wages and reasonably expect the difference to be made up in tips as required by DoL.

We put all the tips paid to owners in the tip jar with all proceeds shared among the wait staff and cook staff. Maybe I should be keeping them like you Ken.

I've noticed I get a lot more tips when I'm wearing a mini skirt. Is that working over at your place too?

Saipan Writer said...

The $500,000 / annum gross business exception also includes a requirement that the business not be engaged in interstate commerce: "The individual employee does not engage in commerce in the course of his or her work (that means, he or she does not make phone calls to the mainland, do janitorial work in buildings where goods are produced for shipment out of the CNMI, handle records of interstate transactions, swipe credit cards, do business over the Internet)."

Although this is an exception, I'm guessing that most businesses will not be able to meet this limitation. They're going to be buying products from outside of the CNMI, or accepting credit-cards, or using the internet...

The point that nothing has changed for a lot of people...well,I agree. Even with a raise to $4.05/hour, the spiraling inflation at the pump and grocery store means that nothing much has changed.

KAP said...

I stayed out of the minimum wage rhubarb at lil's because they were talking at each other and going nowhere, but I noted one comment about a construction company still paying $3.05. Everyone ignored it.

I think a lot of minimum wage workers are arguably not involved in interstate commerce. And who's checking?