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Why Spam will cost more
By Bruce Bateman
Special to the Saipan Tribune
The zzz repair company used to send a repairman by your house to fix your stove or drain your septic tank or whatever and would charge you say $25 for doing it. In order to provide you with that service the company must pay taxes, fees, items used to provide the service, rent, cost of vehicles and many many other items including the cost of labor. YOU pay for all these things and a small profit when you pay the 25 bucks. When the cost of labor goes up you will have to pay for every dime of the increase the next time you buy this service. If three guys are involved in providing the service and 10 other employees are behind the scenes providing support to the repairmen, you will have to pay the wage increase for ALL of them the next time you buy the service.
If you buy a product from a store it must first be shipped here, unloaded, stocked on the shelves, shown you by a clerk, paid for by you at a cashiers' station. Behind the scenes and in the store there are many people who work to make that item appear on the shelf for you to buy. They all have to be paid. You will have to pay every one of them double the wages included in the price over what you pay now every time you buy something, anything, everything. You see, even if your wages go up, by the time the government takes more tax because you were paid more, and by the time you pay more for everything you buy or use, did you really accomplish anything other than a higher tax bill? Probably not. Here is what you can expect to happen: You can expect just about everything you buy and every service you use to skyrocket in price whether your salary goes up or not.
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Not everybody's salary will go up as a result of the pending forced wage increase, but everybody will have to pay far more for everything they buy or use. Welcome to the world. Your tax dollars at work. Do you see who makes out in this scenario? Only the government who started the ball rolling by putting a gun to your employers' head and forcing him to pay more than the market price for labor. What an amazing coincidence.
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When does it start?
If a company has an employee under contract, does the new minimum wage override the CNMI labor agreement both parties have already signed? Or does that increase go into effect only if the employer decides to hire the worker again when the contract is up? If the raise is immediate and contradicts the terms of the employment contract, then is the entire document null and void since the central contract issue, wages, has been forcibly violated? If it is null and void as a result of being overridden by government fiat, does that mean the employer can cancel it and replace that employee with another or with none at all, immediately?
These questions and a hundred others should be explored and answered before the day the wage axe falls and the contract workers all start heading home because they have lost their jobs. It should be very interesting around the Guma courthouse for the next few months as each provision of this new set of regulations gets reviewed, contested and re-contested. Law school anyone?
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Revenge
The revenge-motivated minimum wage bill has passed the House and now needs only Senate approval and a Presidential rubber stamp to begin devastating the economy here in the CNMI. Soon, within two or three months probably, the last of the garment industry factories will be closed and their remaining employees will be on their way back to China and elsewhere. Shortly thereafter we’ll be saying "paalam" to most of the guest workers from the Philippines currently making Saipan their home. Many of them are under the misimpression that they will be getting a free green card sled ride to the U.S. Promised Land. In fact, most will not meet the stringent criteria for immigration to the States and will be sent back to live in poverty in the Philippines.
Ironically, the “worker friendly” congressmen that authored the bill are forcing these garment workers to go back home to China or the Philippines and work for 70 cents an hour with no worker safeguards if they can find a job at all. Here in the CNMI they were making five times as much ($3.05 per hour) or more and have OSHA and EPA worker safety regulations in place. Not only that but here they enjoyed employer-paid health care, living accommodations and even free food in many cases. No such luck in Guangdong or Shanghai, Manila or Cebu City. The same can be said for all the auto mechanics, food handlers, hotel workers, construction workers, gardeners, house maids, farmers, etc. that are about to lose their jobs. They will return to a place with few, if any, of the worker safeguards they have enjoyed here, if they can find a job at all.
These congressmen are interested in getting retribution against the powers that be in the CNMI for thwarting their desires last decade then having the bad taste to rub the loss in their faces. Yes, revenge, not compassion, is the motivation behind dragging the CNMI into a Depression via the forced increase in wages and the soon-to-arrive punitive U.S. immigration system.
A suitcase store would be a very good short-term business opportunity on Saipan about now.
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Reprieve
Okay, okay. Next week I'll stop harping on the subject of wages and immigration. Soon none of us will need a wake up call to see what is going on. You, me and everyone else in the CNMI will be up to our eyeballs in it. I suggest we learn to sidestroke.
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Quote of the week: The future, according to some scientists, will be exactly like the past, only far more expensive. -John Sladek (1937-2000)
(Bruce A. Bateman writes Sour Grapes when the moon is full and the mood strikes. Stay tuned for each exciting episode. “Yes, he is opinionated.” bbateman@pticom.com, www.SaipanBlog.com.) |
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