Why ‘pay them more’ doesn’t pay
Saipan — In this election year, lawmakers of the Commonwealth of the Northern Mariana Islands received the governor’s fiscal 2027 budget proposal in July but did not pass it until Sept. 30, the last day of FY 2026, leaving him little time to review it.
It is hard to divide a shrinking pie into smaller pieces. Someone is bound to be unhappy. Politicians, especially those running for reelection or higher office, want to make the electorate happy enough to vote for them again.
Say what you will about politicians and elected officials, but generally speaking, they are happy to make you and me happy. That’s their reason for being.
But with the CNMI economy still declining and apparently not yet at the bottom, the government—the islands’ primary employer of local residents (i.e., voters) and a major customer of the private sector—cannot collect enough revenue to satisfy everyone.
Not surprisingly, the governor, who is not seeking reelection, vetoed several line items in the budget bill that were arithmetically problematic but politically expedient.
At his press conference announcing the signing of the new government budget, he called his online critics “assholes” and urged local residents who are out of work to take available jobs. “Everybody wants to be a manager,” he said. He added that the CNMI needs local construction workers over the next two years to reduce its reliance on foreign labor.
To which a concerned citizen replied: "Then pay them more."
The simplicity of this solution appeals to most of us. But it melts quickly, like a snowflake exposed to the sunlight of experience. If paying more “does the trick,” then why can’t the States, with a population of over 300 million, and Guam, which has over three times as many people as the CNMI, find enough U.S. citizens to be construction workers?
Based on Bureau of Labor Statistics data, the median annual wage for U.S. construction laborers and helpers is about $22.44 an hour. In Guam, the hourly rate is approximately $20.51 to $20.60, according to employer and market data for 2026.
Increase the pay further? By how much? And how will that affect construction costs and those who pay them: businesses and homeowners? And will the wage hike be enough to persuade American citizens to pass up the many—so many —other career choices they have?
Has anyone else noticed that prosperous societies, which pay higher wages and benefits, tend to lack workers for certain jobs, including healthcare, caregiving, hospitality and other services, farming and construction?
Yet here in the CNMI, with a population now estimated at about 42,000, we expect local residents to give up their government jobs or forgo their college plans to become construction workers because of a wage hike? Again, how big should that hike be? What if it makes construction prohibitively expensive instead? Result? No one gets hired.
Quick: What’s the difference between a holdup and a government-mandated wage hike? One is for the benefit of the perpetrator, while the other claims to serve a higher good but usually harms its intended beneficiaries.
It’s basic arithmetic. Raise wages in a depressed economy such as the CNMI’s, and you raise the cost of doing business, which is like drawing blood from someone with anemia. Businesses will either pass the costs on to consumers, who are already hard-pressed, resulting in weaker sales, lower earnings and lower tax revenue for the government, or they will cut workers’ hours or jobs.
So who will benefit from this compassionate, humane, government-mandated wage hike, which, more often than not, has no relationship whatsoever to business earnings but is premised on making its proponents look good to voters (until those voters end up paying more at the counter, seeing smaller paychecks or even getting a pink slip)?
The more effective way out of the government’s financial jam is to reduce spending while seeking ways to revive the economy. But the first would affect government personnel (i.e., voters), and the second would take time and usually depend on events beyond the control of these tiny, faraway islands.
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So what’s left for a typical politician running for office in this most miserable of years?
Proposing measures that are as popular as they are economically, if not mathematically, unsound.
Afterward, if the economy remains where it is, the newly elected officials will complain about inheriting a mess—the mess they promised to “fix.” In other words, if things get better, they deserve the credit; if not, their predecessors are to blame. Thank you, come again.
Zaldy Dandan is the editor of the CNMI’s oldest — and only remaining — newspaper, Marianas Variety. His fourth book, “If He Isn’t Insane Then He Should Be: Stories & Poems from Saipan,” is available on amazon.com/.
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