This is the tenth installment in a series of articles responding articles in the Denver Post by reporter Michael Riley which attack former Congressman and current Senate candidate Bob Schaffer for a fact-finding trip Schaffer took to the Northern Marianas Islands (“CNMI”) in 1999. It is the fourth of four notes responding to two articles (one in the Post and one in the Rocky Mountain News) regarding the reappearance of Allen Stayman, a pro-union political partisan who attacked the CNMI from his office in the Clinton Administration's Interior Department and then from a position as a Democratic Senate staffer.
Stayman Gets His Wish: “An Economic Holocaust”
As you consider the following, please keep in mind that we’re not talking about Cambodia or Bangladesh here. Citizens of the CNMI are American citizens, subject to paying American income taxes and subject to American laws outside of those they reserved for their self-rule in their Covenant with the US
executed in 1975.
Two key parts of the Covenant are provisions allowing the islands to implement their own labor laws (including minimum-wage laws) and their own immigration laws. It was these laws, particularly the labor laws, which mainland US unions were desperate to overturn because of CNMI’s ability to bring in workers at less than the federal minimum wage (though still handsome wages by the workers’ standards). Despite the efforts of many Republican in Congress, the unions eventually got their way, through efforts of the Congressmen they control, particularly George Miller (D-CA), and political operatives like Allen Stayman working under the protection of government jobs.
The result, according to Governor Fitial of the CNMI, has been nothing less than an “economic holocaust” for the islands.
The Consolidated Natural Resources Act of 2008, S.2739, which became law in May, 2008, was passed using a cover story of national security, arguing that the CNMI’s immigration laws were a security risk. However, the Governor of the CNMI had already told the Federal Government that he was willing to have the Department of Homeland Security run the islands’ immigration to make sure that terrorists and criminals couldn’t get into the CNMI, as long as DHS was allowing bona fide workers to enter, as allowed in CNMI law.
Another provision of CNMI immigration law was that foreign workers were pre-qualified in their countries of origin to verify that they were capable of doing work of the quality and quantity required in the job description. These were mostly Chinese women, though there were men and women from around Asia who came to work in the CNMI’s garment factories. Most of the workers were known by their employers as experienced garment workers before coming to the islands. It would not have been hard for the Federal Government to implement national security measures while still allowing this lifeline for the CNMI economy to exist. The national security cover story for the law was a lie.
S.2739 also put the CNMI under the federal minimum wage law, meaning that employers there would face wages as high as they would face with employers based on the mainland. Unions argued that the existence of the CNMI was causing domestic garment workers to lose business, but once the CNMI was effectively put out of business that garment work went elsewhere in Asia where labor is much cheaper.
Indeed, the garment industry in the CNMI was already being pressured by lower wages in Asia, so no rational person could have believed that destroying the industry would have brought any benefits to American workers.
Just before S.2739 was made law, the Governor of the CNMI and the Representative of American Samoa to the US Congress sent a letter to Congress
Simply put, the fragile private sectors of American Samoa and the Commonwealth of the Northern Mariana Islands cannot support additional costs when we are already in economic decline… We appreciate your leadership in making sure all workers receive decent wages and we stand with you, in principle. However, because there is no new money coming into our islands, the increase will not bring benefits to our people, but will more likely result in losses of jobs, benefits, and tax dollars. In short, American Samoa and CNMI could become welfare wardens of the federal government. We are sure this is not what Congress intended when it passed legislation to increase minimum wage in our jurisdiction.
The CNMI needed the government’s help, not its dead hand pounding them into poverty. During the first half of this decade, CNMI’s economy, particularly the garment industry, was already weakening due to it slowly but surely becoming clear that Stayman and friends would get their way some day soon.
The new immigration system is not simply more restrictive. It is strictly authoritarian, allowing the Secretary of Homeland Security to “establish, administer, and enforce a system for allocating and determining the number, terms, and conditions of permits to be issued to prospective employers…” And while the law doesn’t officially take effect until June, 2009, it might as well have been enacted now since employers are behaving as if it has.
In December, 2007, prior to the measure’s approval, Governor Fitial made a statement about a the proposed federalization of CNMI’s labor and immigration laws: “This bill would impose a federal labor system on the commonwealth which is nothing more, or less, than an effort to enforce a ‘command economy’ system on the Northern Marianas. In another day, it would be called socialism. It entrusts to government officials the responsibility for allocating laborers to particular industries and, within industries, to particular companies. These economic decisions should not be made — and cannot be made effectively — by government officials.”
The results in the CNMI have not been pretty. Employers subject to new, higher minimum-wage requirements are cutting back work hours for employees. Islanders are going fishing before and after work to try to save money on household food bills so they can afford electricity and gasoline.
Governor Fitial is quoted as saying “The economic impact of this law is as serious as I feared during the Congressional hearings (in 2007). Foreign investors have withdrawn from potential commitments to the Commonwealth because of the uncertainty regarding their future access to an adequate workforce.” The governor predicts the deportation of 20,000 foreign workers and reduction of CNMI’s local economic output by at least 50%.
Again, bad things are happening in the CNMI because of the passage of S.2739 even before its official enactment regarding labor laws. From a Saipan Tribune article in September, 2008: “It's clear that our economy is going through a difficult period right now,” James Arenovski, president of the Saipan Chamber of Commerce, said in an interview, adding that Saipan's unreliable electric power system, private sector fears over the pending federal takeover of the CNMI's immigration rules, and the slow death of the local garment manufacturing industry have all contributed to the 'instability and uncertainty' businesses are experiencing.”
According to Governor Fitial, another potentially disastrous effect of S.2739 is the imposition of U.S. visa requirements for all visitors to the CNMI, including particularly Chinese and Russian tourists, potentially devastating the tourism industry in the islands which over the past two decades alternated with the garment industry as the islands’ biggest sources of income for its citizens and taxes for the government and is so again after the destruction of the garment industry. Both Guam and the CNMI are working to get waivers
of those visa requirements. The first part of 2008 seemed to show CNMI tourism stabilizing at much lower levels than several years earlier, down almost 50% from 1997. (Japan Airlines cut flights in 2006, severely damaging the CNMI’s tourism industry, but at least one Chinese Airline has recently added a direct flight to Saipan and Northwest Airlines flies to Saipan from Osaka.) Unfortunately, the worldwide economic turmoil is likely to cut tourist arrivals dramatically.
In true American (i.e. profit-driven, self-reliant) spirit, there is a Saipanpreneur Project, aimed at “creating economic success for the CNMI.” Here’s an interesting article
aimed at Saipan’s would-be entrepreneurs, encouraging everything from becoming a government contractor to “research what Chinese vacationers want and need”. It's too bad the American citizens of the CNMI must try to create economic success fighting the headwinds of congressional blowhards and their henchmen.
The CNMI has plenty of problems outside of Congressional Democrats’ federalizing (socializing) some of their most important laws. There are some bright spots in the future, no thanks to Stayman and friends. This article
covers much of the good and the bad of the CNMI’s economic prospects, including possible construction of casinos.
On September 15th, 2008, Governor Fitial filed a lawsuit against the Federal Government
: “Our complaint focuses on the labor provisions of the legislation which are not and never have been part of the federal immigration laws. The complaint sets forth the economic injury that these provisions have caused, and will cause, to the Commonwealth.” Although the lawsuit is a long shot
to succeed, I certainly hope it does, or at least embarrasses Congressional Democrats as sacrificing the economic lives of American citizens simply to show fealty to unions.
Allen Stayman and friends succeeded. They succeeded in destroying the lives of thousands of American citizens in order to heel to the wishes of their union masters. They accomplished nothing for mainland Americans but imposed their vindictive, brutal attack on the self-rule which the CNMI had negotiated in good faith with the US more than thirty years earlier. Allen Stayman is a villain and a criminal. In the spirit of knowing a man by his enemies, Stayman’s opposition to Bob Schaffer is one of the best endorsements of Schaffer’s policy views and strength of character that anyone could offer.
This concludes my rather exhaustive report (27 pages in Word) on the real CNMI story, the outrageous hit-jobs attempted by Denver Post reporter Mike Riley against Bob Schaffer, and the incredible, criminal behavior of a man who remains on the payroll of the Federal Government while in service of Democratic politicians and their union masters. Riley's article poisoned the well early on and made it very difficult for Bob Schaffer to get a fair hearing in the Colorado press. Of course, this was Riley's goal. But it is an inappropriate goal for a news reporter just as it was inappropriate for Stayman to engage in partisan politics while collecting a government paycheck. It's par for the course for Democrats these days, but it's still reprehensible and Mike Riley should be ashamed of himself.