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Obama Delays Minimum Wage Increase

12:28 PM, Sep 19, 2013 • By JIM SWIFT
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Yesterday, President Obama signed a number of supposedly uncontroversial bills into law.

Saipan, Northern Mariana Islands

Saipan, Northern Mariana Islands

P. Miller

One new law contains a provision that has been controversial in the past.

The law, S. 256, gives the government of the Commonwealth of the Northern Mariana Islands (CNMI) authority over submerged lands surrounding its coastlines, gives the President authority to establish naval defensive sea areas there, and also delays scheduled increases in the minimum wage for the remote island.

Specifically, it amends the Fair Minimum Wage Act to provide for no minimum wage increases on the island in 2013 and 2015. Before the Fair Minimum Wage Act, the Northern Mariana Islands were not subject to federal minimum wage laws.

The law passed unanimously in the Senate, and by a 415-0 vote in the House.

In 2007, President Bush signed the Fair Minimum Wage Act into law -- making the federal minimum wage $7.25 throughout most jurisdictions controlled by the United States. The Northern Mariana Islands and American Samoa, however were given a special timetable to adjust to the higher minimums.

The Fair Minimum Wage Act stipulated that the minimum wage in the CNMI was to increase by $.50 a year until it reached the federal minimum of $7.25. It was one of the first bills passed by the newly sworn-in Democratic majorities of the 110th Congress. The law was passed in part as a response to the Jack Abramoff lobbying scandal, as Abramoff represented varied clients in the CNMI who opposed an increase in the minimum wage there.

The Washington Post reported at the time:

Ever since Abramoff's lobbying scandal broke, top Democrats have been eager to highlight the labor-rights records of the Northern Mariana Islands. The islands were a top client of Abramoff's and had close ties to DeLay, the onetime House majority leader from Texas, and other Republicans. Those Democrats asserted that by finally bringing the islands under U.S. minimum-wage law, they could demonstrate that their party had broken through the steel ring of protection erected by Abramoff and his allies.

Business groups and the Island’s non-voting delegate in the House of Representatives, Independent Del. Gregorio Sablan (who caucuses with House Democrats) have sought and won delays before, arguing if the minimums were to be raised, the Islands wouldn’t be able to compete with their Southeast Asian neighbors.

In 2011, President Obama signed a law delaying the minimum wage increase, but no such law was passed in 2012, and the wage increased from $5.05 to $5.55. The current minimum wage in the CNMI is $5.55 an hour, and was scheduled to rise to $6.05 at the end of September, but after yesterday's signing of S. 256, it will remain at $5.55. Earlier this year, during his State of the Union address, President Obama called on Congress to raise the federal minimum wage to $9 an hour.

UPDATE: An earlier version of this article stated that Senator Ron Wyden (D-OR) authored S. 256. A spokesman for Senator Wyden clarified that Wyden and Senator Lisa Murkowski (R-AK) introduced the bill “by request” as a courtesy to elected representatives of the various territories, not as an endorsement of the bill or all of its provisions.

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