Sunday, October 28, 2007

We're still at $3.05 through creative accounting

After all the crying over the minimum wage increase and all the lobbyists and public relations firms hired to keep wages low, all paid for on the public tit, I found out from Cynthia through her contract worker friends that some, and probably most I intend to find out, of our local businesses merely cut off food allowances and raised the rents on the rat holes that go for contract workers barracks so that it's all a wash. Others just cut back hours. Contract workers are still, and apparently will perpetually be, in that $3.05 quicksand. It's this kind of thing that causes books like this to be written, websites like this to be a top Google search on Saipan, and blogs like this to keep being updated.

36 comments:

glend558 said...

I went for a haircut just after the new wage increase and ask the person how it felt to finally get a raise. The reply, They raised my rent more then the raise so I'm actually getting less then before. Figure that.

Anonymous said...

Don't you think housing, food, medical expenses, travel to and from the jobsite, etc. are part of the employee compensation? Add it up and see what the true salary is. Not all barracks are rat holes either. You make generalized statements as if every employer who hires contract workers is the enemy, in your entitlement mentatily.

bigsoxfan said...

I remember an article or two in trashbin during the "negotiations" phase of the min wage hike, stating that companies, with the governments complicity, were planning to raise fee's on the workers, so as to keep the status quo. My memories of those days were; "Now, that sort of outlook is going to help the CNMI greatly during the negoiations for immigrations reform." Can't say I'm surprised they went through with it.

Jeff said...

I think there are a few broke major league baseball players as well. The large majority of these barracks are a disgrace. People cutting lawns in the Saipan sun for $3.05 are your idea of entitlement? How do these employers pay what they pay and pull shit like this and still be able to respect themselves. $20 a week raise for the poorest of people after ten years and you still find a way to fuck them over. If I had so little regard for the dignity of fellow humans, I'd post anonymously, too. This place often times deserves its abysmal reputation.

Rick Jones said...

I can see your point Jeff, but Anonymous does have a point in that it's dangerous to paint all employers with the same broad brush. I've actually not heard of anyone personally that had their benefits reduced, and I know a lot of contract workers.

Keeping in mind that these seemingly minor $0.50/hour raises come out to $1000/year, multiply that by whatever number of employees and you can see the impact on employers pretty easily, particularly in a shrinking economy. Knowing that there is another increase coming up in 6 months can make it hard to sleep at night.

Even if it's not happening now, I'd bet that as more and more of the increases are implemented, most if not all employee benefits will be discontinued.

I know I'm repeating myself now, but it's a lot easier to get indignant over these seemingly small raises when you don't have to worry about paying them.

Jeff said...

There was no small raise. That's what is outrageous. I don't think everyone is pulling this shit, but I think a lot are, and if they aren't running that one, they are cutting back hours, making workers in the hotels do split shifts and stuff like that. I can't get into specifics here about the place I'm talking about Rick, but it isn't a tire shop, and we can talk about this next time I see you. This is a place that doesn't need to pull this.

Incidentally, I just looked up the Census's idea of poverty, an issue no one in the states gives a damn about. In 2000 that was defined as $8,259 for a single person, and $17,463 for a family of four.

$3.55 annualized gets us to $7,384. For many things, prices are higher here than in the states, plus that was 2000 before oil was $90 per barrel.

I don't think you have to be a businessman to find the private sector wages here offensive, and the loophole for the poorest of poor vile.

If the business model really requires paying workers below the poverty line, maybe this isn't a place for the ethical businessman to do business.

Jeff said...

Incidentally I did say some, not all, but I've got a strong feeling it's more than some as I noted.

unionize me said...

I'll back you on your feeling on this, Jeff, based on what several alien workers tell me. I've one difference to add -- the unscrupulous employers out there are not all as creative as you think. They're simply telling their employees that they can't afford to pay them.....and so don't. Employees wait, then ask again, then maybe get paid here and there. Actually, I'm sure you know that this has been going on well before the minimum wage hike. And when you're tied to only one employer, there's not much you can do, except file a labor complaint and hope that, if you win several, several months later, you can be allowed to find another employer in, say, 45 days. Good luck with that, while in the mean time, you're not getting paid squat. Employers know the unfair advantage they have here, and so exploit it to the hilt. Interior agrees. The senate bill's provisions on the transition program for alien workers includes an explicit mobility to move from employer to employer like any "resident" has the right to do, without have to deal with the all the shackles of the CNMI labor law and regulations. "Oh no, a labor market with that sort of freedom will destroy the CNMI." I can hear it already. Hmph.

In other words, it's a typical business-labor issue.... that was dealt with back in the 19th and early 20th century. So, if the Hyatt in Guam can figure it out, I'm willing to give enough credit to the Hyatt in Saipan that it can figure it out too. It's time to move on and for businesses here to evolve. No more labor laws that give alien workers more benefits. Everyone should get paid more with equal access to benefits. Businesses will adapt. I mean, the smart and savvy business folk will survive.

As far as the unscrupulous "I'll-pay-you-when-I-pay-you" employer goes, I hope they can one day rest in peace. For now, I can say safely that there isn't just one of 'em out there. You can just take a look at the number of labor complaints there are for unpaid wages. And that would be only a small sampling of the phenomena. Unpaid wages?! I hope I don't get used to that happening to anyone I know. It's simply incredible, and perhaps even more so that it happens with a certain level of consistency. I haven't heard of a war on unpaid wages, but I'd say it's as immoral as getting someone hooked on drugs.

I believe that many employers have not simply lost sight of the principle that a long-lasting profitable business will always include a policy of treating your employees fairly. (Funny how we're reduced to think of being treated fairly as simply getting paid for your labor. Don't tell Walmart.) Naah, those employers just never gave a shit in the first place.

But I'll let them go for being that way.

This is because Saipan can and continues to breed that unscrupulous business sentiment with ease, partly because we have a guest worker program that serves as the centerpiece of the labor market in the CNMI. Maybe you can have it as a marginal supplement for certain occupations. Oh wait, that's how it is with federal immigration.

Rick Jones provides the best pro-business argument you can make regarding stifling any living wage. I'm interested to hear what he says about Guam. Economically speaking, how and why can Guam entertain a minimum wage at the same level as the rest of the continental US, but CNMI businesses must be given a special privilege to do something else? What makes the Hyatt in Saipan need the subsidy and not the Hyatt in Guam?

lil_hammerhead said...

I know a few families of non-res workers who've had the same thing happen. Only the company owners used the increase in power rates as the excuse for raising the barracks rent. Wasn't it kind of the business owners to wait so long until August and September, until after the federal legislation passed to raise the rent. Business owners here show such caring and concern for their employees. That is why so many government workers are fighting tooth and nail to find jobs in the private sector.

Unpaid wages said...

The Fair Labor Standards Act already applies in the CNMI. If employers don't pay wages, don't waste time with the CNMI Department of Labor.

File a case in federal court.

Spread the word. We are part of the United States.

Too bad so few local lawyers take such cases. That is the heart of the problem.

Rick Jones said...

I don't know much about doing business in Guam, having never done any there, but I will speculate on a few things:

I'd be curious to know if the employers there are on the hook for housing, food, medical, etc., as we are here.

Those additional benefits add significantly to what is admittedly a low minimum wage, at least compared to the US standard.

I'd also presume that there is no Department of Labor to deal with either, saving several hundred dollars per employee for processing every year. If you don't think these costs impact your bottom line, think again.

Would it also be fair to say that Guam has a far better economy in general than Saipan, allowing for a freer flow of dollars?

It's cheaper to ship things to Guam, which lowers the cost of doing business as compared to Saipan.

All that being said, there is no excuse for not paying employees. If you can't afford to pay people, then you really can't afford to stay in business, which is one reason why places are shutting down all over Saipan.

lil_hammerhead said...

We've had our differences Rick.. but you hit the nail on the head with that last statement of your comment. "If you can't afford to pay people, then you really can't afford to stay in business".

I've actually gotten into fairly serious arguments with several business owners here, debating them along that line.

If you can't pay your workers a decent wage.. then maybe you shouldn't be in business. That is not an easy pill to digest, but in many cases here, the market is just oversaturated.

Rick Jones said...

The problem is that it's become increasingly difficult to even pay the $3.55/hour that we are legally obligated to pay, along with the other benefits and labor costs.

Figuring another $2.00 for all other benefits combined, we really pay around $5.50/hour.

One thing that no one has mentioned is that after the first year of the contract, as I understand it, housing and other benefits are no longer required to be paid by the employer. So people like me and other reasonable employers that continue to pay these benefits are doing so voluntarily.

Why? In my case, consideration for the people that work for me, it just didn't seem fair to hit them in the pocketbook just because I could.

I do know of one large company here who cut all that out, they make plenty of money but in their case the bottom line rules all.

SteeleOnSaipan said...

A very broad-brushed picture painted as Rick said. I could say that public school teachers shouldn't be paid during summer break if they are not teaching summer school since it's sick to pay male educators while they are in Angeles City screwing young girls all summer but that wouldn't be fair to the female teachers as well as male ones who don't go to those exotic locales, now would it? This may astonish you Jeff but not all businesses "f... over" their employees.

I'll rehash old rantings that I've left here before but all shit in the CNMI pours from the top and wages would still be $3.05 if most past and present legislators and governors had their way and the Fed didn't force the issue. Add mind-boggling shipping rate increases, 5% import tax, 5% gross receipts tax, ridiculous power bills, on-island foreign competition that doesn't pay the tax portion above if they cheat and bribe properly and then all the falls and follies of the local government and I'd say Jeff, that you are very lucky that there are even any semi-legitimate businesses left here for you to patronize. Business is not a winning proposition in the Marianas nowadays if you're running a legal business catering to resident patrons.

Jeff said...

First, I never said all business screw over their employees -- never. I don't know where you're getting that from. I certainly will say there are enough unscrupulous ones to give this place the bad reputation it has. There is an above average number who don't pay employees, a mere few pay a wage above the poverty line, and what many businesses did with this pay raise is offensive. I'm shocked it's not offensive to you too Randy. Ask your wife's friends about it.

As for teachers being paid over the summer. We're paid for 190 days. The government drags it out over the summer to get more time to pay. If they want to pay me what they're supposed to on time, for those ten months, go ahead.

As for the Angeles comment, Randy did you drink your coffee this morning. My guess is that an equal or greater proportion of car salesman enjoy strip clubs as teachers do. Strippers tend to be popular with men across all professions. I don't even know what that is supposed to mean, what the relevance is, or why you said it.

Jeff said...

Rick,

Philipinos get sponsored to even get here. When you bring them over here, inevitably they get sick. $3.55 is not enough to pay their hospital bills. It would be wrong to just stick that bill on the government, and health packages go with full time employment anyway everywhere. It's part of the HMO debacle people ignore while focused on nonsense like gay marriage or Britney Spears. I would be on the hook if my mother in law got sick when I sponsored her.

As you said before, it's better to not be in business than not to pay, but a lot of people aren't following that advice.

People should be mad at the businesses who do this and ruin the reputation of this place and not me for pointing out what is happening.

Rick Jones said...

I don't know where people got the idea that employer-paid health insurance is some kind of employee given right. I understand it here, where the wage is low and you do indeed contract/sponsor someone in, but I never could figure out how that got to be some kind of entitlement in the States.

I used to pay 100% for it over there, but mainly as a way to stay competitive in hiring people.

People tend to forget that businesses exist to generate profits, primarily for the owners, and are not designed to be charitable organizations.

If we just say, "if you don't like it, go work somewhere else", we are characterized as heartless bastards. You can't win really, which is why many employers lose their sympathy for the plight of the worker.

Particularly when most of them would leave you for $0.25/hour more from someone else, no matter how well you've treated them. Of course, when they do, no one takes up your side, they just offer hearty congratulations on the new job to the worker.

Jeff said...

Probably when the suits realized all the money that could be made and got Nixon to go along with the lucrative HMO idea. Perhaps the better question is why is the U.S. the most expensive system and only twentysomething globally in health, and the only rich country where a serious illness in the family can lead to complete financial ruin if the family member can get health care at all.

"In February of 1971, President Nixon declared HMOs to be innovations for health care that would be part of "a new national health care strategy." Nixon argued that the current system operated "episodically" and it had built in an "illogical incentive" that encouraged Doctors to benefit from patient illness rather than patient health. Believing that HMOs reversed the incentives of the traditional system, Nixon called on Congress to establish grant and loan programs to help HMOs grow. The goal was to create over 1,700 HMOs by 1976, enough to enroll about 40 million Americans. The proposal would have required employers to provide minimum health benefits under a National Health Insurance Standards Act. It also meant to establish a federal fund for the Family Health Insurance Program which would offer some coverage for low imcome homes." (Starr:1982)

http://en.wikipedia.org/wiki/User:Doc_Tropics/United_States_health_reform_under_Nixon

Jeff said...

I lose my sympathy for the plight of the local business when I visit my friendly, neighborhood, overpriced Costco, and see an Ipod that is $234 on Amazon is $449 at Costco. Retailers here make it impossible to buy things on island and not feel like an idiot. There is no way shipping, or anything else, accounts for nearly double the price on a one pound Ipod.

SteeleOnSaipan said...

From the 4th comment above you wrote "$20 a week raise for the poorest of people after ten years and you still find a way to fuck them over." I did not say that you said "all businesses" f... over there employees. Rather, I quoted two words from your comment and applied it to what I perceive is your feeling toward most island businesses.

Other comment authors agreed and I in turn, made a comparative, general statement about male teachers spending their summers in Angeles City while getting direct deposits every two weeks. I don't see how you missed the humor and irony in it. Maybe I'm not as funny as I think.

As for not being offended, I wouldn't have been here thirteen years as a "visitor" who can't buy land if I offended easily. You take the negatives with the positives. I've long not given my business to those I believe to be unscrupulous, whether it's my own money or the money of the company that I manage. For example, I boycotted Hard Rock Cafe years ago when I learned that the 10% gratuity charge is not being distributed to the staff. I don't buy overpriced electronics or large baby supplies locally, I order online. I'd much rather give the biz locally but if the prices are outrageous, I don't, simple as that. You won't see prices at our dealership that can be beaten by buying elsewhere and shipping the product in. If you do, we'll adjust to that. I can't see how doing otherwise could be smart business.

I also try not to patronize businesses that obviously have no local/U.S. employees and that includes most small stores and foreign-owned restaurants. Businesses like these are why our governor and legislators are fighting so hard to fend off federalization. Nothing to do with pride or self-determination but simply lining their pockets by being the go-to guy for these businesses' waiver needs. So we have local-preference hiring laws that legit businesses try to adhere to while many lawmakers are lobbying gophers for half-ass, foreign-owned business interests. These eggheads don't even realize that the largest chunk of funding for their salaries comes from business tax and they grant favors to businesses who pay pocket-money rather than taxes. Great business environment.

I'm rambling now and yes, I drank my coffee this morning. Business sucks this week which is why I unfortunately have time for this.

Jeff said...

Maybe put some kahlua in that cup of Joe Randy.

"This may astonish you Jeff but not all businesses "f... over" their employees."

Sounds like you're saying all, which I didn't say.

I'm inspired by a place my wife used to work at that treated her like shit. I saw it. We were dating then. It's one of these golf courses. We have a family friend who has worked there for $3.05 for like ten years, never an extra dime, never had a sick day, and this is waking up in the middle of the night and then cutting golf course grass in the blazing Saipan sun. Finally they change the minimum wage, and he tells me he isn't getting a nickel extra as they just raised his rent on his shitty barracks that I've seen. It's shitty. I wrote in a fit of rage upon first hearing this news and was I think understandably appalled. Being married into the Filipino connection, I think you can relate.

You is still a singular pronoun btw Randy.

Rick Jones said...

I agree that prices on many things are outrageous here, but linking an outfit like Costco which is run by the Joeten empire to small, individually owned businesses isn't really a good comparison.

I go along with Randy on this one, there are many places on Island I won't go either because the prices are too damn high or because I have either heard of or seen the type of employee abuse we are talking about here.

SteeleOnSaipan said...

OK Chopper, I know that you grammar cops are fanatics and it must burn your ass to see a grown man fail to connect pronouns with the proper verbage but I pretty much lost interest in English and Lit. classes somewhere after Conjunction Junction. I can think of only two things worse than sitting through another English class and that would be human resources and death so if you graduated an English major, I congratulate you for not putting a bullet thru your head. So don't let your hair get all up on end....ooops, sorry 'bout that too.

Hi Rick, sorry that we haven't been up to grub lately. Four-month old, you know the rest....

Jeff said...

I actually went to newspaper journalism school, which is a lot better than English.

lil_hammerhead said...

Medical Insurance isn't an employees right!.. unless you're paying the employee $3.55 an hour, or $4.00 and hour, or $6.00 an hour. If it's not a right at such low wages.. it should certainly be.

Jeff's right.. there's way more fuckin' around with employees and their pay here than anywhere else in the US I've ever lived and worked in.

Employees making minimum wage, whether their non-residents or not, should be provided the same benefits.

If there are only two or three grocery stores left on this island, and they are paying there employees $8.00 per hour, or preferably more, I will be a happy camper. They'll likely be larger stores, and they won't have to jack up their prices to outlandish amounts if they're selling their products to the entire island.. they'll profit on quantity sold.

When they're being paid a base minimum "living wage".. an employer shouldn't be obligated to any benefits.

Rick Jones said...

Wait til you see what the prices are in those 2 or 3 stores left, when there is no competition to keep prices anywhere near reasonable. You think it's bad now, I'm here to tell you, you ain't seen nothing yet!

Which, of course, will make it that much harder on the same people you are trying to help by advocating for higher wages. In fact, at $8/hour, I can virtually guarantee you that any contract worker still here would be paying there own medical, housing, travel, food, you name it. Probably even there own labor processing, because you can bet that the law would be changed post-haste if we really had to pay US minimum wage.

I'm wondering why no one is willing to acknowledge the incredibly high cost of doing business and providing benefits here as a factor in keeping wages low. Every time I've mentioned it, here and in other discussions, it just gets ignored, as if by ignoring that fact the arguments on the other side seem stronger.

Any thoughts on what the store owners you'd be happy to see go out of business should do? Aren't they people too, with families, bills, and concerns of their own?

Also, how many people would be entirely out of jobs from all those stores you'd be happy to see close down, so that some employees could be paid a wage you see as reasonable (but which you don't have to concern yourself with paying)?

SteeleOnSaipan said...

Rick, it's not brought up because many/most people harping on business's labor issues and high prices are not in business or the private sector themselves and are talking out their asses, bluntly stated.

For example, if there were only 2-3 stores left on island, that means that all the Chinese and Koreans were kicked out and there would probably be no more than 5-10,000 people left on island. Joeten, the most expensive of all markets, would surely have a footprint, oh and they pay minimum wage to most employees by the way. I'm sure that Joeten, out of the goodness of their hearts, would keep prices low and survive on penny-volume, Chinese-style, when they currently don't do so with competition all around them. Wishful thinking at best. With so few persons, shipments for those grocers as well as wholesalers would be fewer so less supply would result in higher prices.

Better stock up on farm and fishin' gear if that's what you're wishing for hammerhead.

And what exactly is a "base minimum 'living wage?'" Is that something that we allow the legislature to concoct right around election time like a CUC rate? Whatever happened to good old, market-driven supply and demand? If a guy has stayed on the job for ten years, I assure you that he's probably whining a lot less than you are.

unionize me said...

Rick,

I hear you loud and clear. The question is whether the CNMI should be treated any differently than Guam or the rest of the US. The feds have established its bottomline as far as the min wage goes. And we're all getting paid dollars here, plus the cost of living in the CNMI ain't no different than, say, the Bay Area, Metropolitan Houston, or Anchorage.

You focus on the cost of doing business here. You mention two reasons why CNMI businesses have it harder: 1) the unique regulatory overlay (fees and additional benefits for alien workers) and 2) the economy sucks.

As to the latter, that would simply be a reason for Louisiana or parts of Alaska, for example, to want an exemption from the min wage. I'd agree, when the economy is down, businesses will want to cut costs. But while a business has a bottom line, so does the government when it comes to the lowest you can pay its people.

But I'll agree with you as to the former reason being legitimate. I view the regulatory overlay as part and parcel to the guest worker program, which is what essentially fuels the CNMI labor market. And my bottomline is that, while a guest worker program may be needed, it should only be a supplement to a state's labor market, not its centerpiece, because doing so cultivates the abuses that you yourself admit to observing here.

If the result is a smaller, limited economy in the CNMI, then so be it. We can't all be Manhattan. But what some may see as limitations, others may see as new avenues for discovering what else the CNMI could be. Maybe perhaps what it should be. Alternative industries that may not produce the glamour of Third World dual economies with super-rich and super-poor living side-by-side skyscrapers, squattervilles, casinos and 5-star ubber-restaurants.

Essentially, I'm saying that I hear you when it comes to the business bottomline. But thankfully, that's not all we consider.

Jeff said...

I suggest we pause from this debate for a minute and contemplate that picture of Bruce Bateman and offer appropriate ridicule.

Unpaid wages said...

One other key reason, Unionize Me, for the higher cost of doing business in the CNMI than Alaska is lack of economies of scale.

As long as people don't consider small businesses to be their fellow humans, it is so easy to pontificate that the bottom line shouldn't matter as much here as anywhere else in the country.

For all the Legislature might try to repeal the law of gravity or the law of supply and demand (such as with CUC), it won't work.

The same with many of the well-intentioned ideas posted on this thread.

What we do need, more than anything else, is concerted enforcement of the Fair Labor Standards Act.

Until then, it's all talk and feel-good platitudes.

unionize me said...

Unpaid Wages,

I've no ill will towards small businesses, just the unscrupulous pay-you-when-I-can employers as I mentioned above. Actually, that's what I originally pointed out as existing here with suprising frequency, not just the "creative" ones that Jeff heard about.

In fact, I was referring to the notion that the CNMI's alternative future would be the I've-come-to-terms-with-the-fact-that-I'm-a-small-economy. An alternative to the I-wanna-jazz-it-up-like-they-do-in-Macau-or-Manhattan.

I think plenty of Alaskan villages in the Bush would beg to differ about taking advantage of economies of scale to increase efficiencies. Regardless, I thought an economies of scale argument would be used when you have a big business competing against a small one. Are there big businesses driving out the small ones here in the CNMI?

I agree that private litigation helps enforce the law, but there are plenty alien workers who have a different view, based on what actually happens in the whole lawsuit process, which is that it takes a long time with less hope in the end when they need to find another employer. They'd rather take their chances that the employer will eventually pay.

Oh yeah, and of course this is all talk. That's what a forum is for. I'm learnin' somethin', I think.

lil_hammerhead said...

No.. you don't leave a base minimum wage decision up to the legislature. You hire an economist and have them do a study and come up with a figure.

Uncle Ben's godson said...

Or a board, or team of economists, as Governor Fitial has been urging for years.

unionize me said...

Lil,

And then after that, you leave it up to the legislature. While people may have their misgivings about politicians, they are the lawmakers that we elected.

As far as economists go, they're like statisticians and attorneys. You use them to get you what you need done. Put two economists/statisticians/attorneys in a room, and you'll always get two different analyses/opinions.

Rick Jones said...

How's that old saying go, "put 100 engineers end-to-end and you'll still never reach a conclusion"?

Why is everyone afraid of letting the free market do it's job? The problem here has been enforecement, bad employers will only abuse their workers if allowed to by ineffective and/or corrupt officials.

I would love to be able to pay people higher wages, as a boss one of the most rewarding things you can do is give someone a positive review and a well-deserved raise. Unfortunately, business conditions here make it very hard to do as often as you'd like.

unionize me said...

Mmm, the free market. Like privatizing utilities. Deregulating taxis. No wage minimum. No 40 hour workweek with overtime. Child labor. And allowing Bruce to remain bi-focaled and naked. Are you sure that's what you want? How about we deregulate everything except when it pertains to whatever action Bruce takes. I see a platform in the works. The solution to the CNMI. I'll still go to Porky's, don't get me wrong.

Anyhoo, thanks for the forum on this. Keep the topics comin', Jeff.