First Minimum Wage Forum held in Pohnpei State

A minimum wage forum was held in the Governor’s Conference room, Peilapalap, Kolonia on Friday, December 9, 2021. The forum was hosted by the newly formed Pohnpei State Economic Planning Commission and funded by SPC through a grant to Micronesia Care Foundation.

The forum, the first of its kind, drew members of the 10th Pohnpei State Legislature (PSL), Economic Planning Commission (EPC), Pohnpei Chamber of Commerce (PCC), Price Control Commission, and members of the public. Prior to the open panel discussion on the proposed legislation for an increase in the Pohnpei State minimum wage law, Governor Oliver welcomed everyone to the forum, including the former Governor of Pohnpei State, Marcelo Peterson. Governor Oliver spoke of the EPC’s mandate to establish overall strategic direction and mobilization in Pohnpei State’s planning and development efforts to restructure the government and the economy. He noted that the forum is part of this strategic direction and mobilization. Governor Oliver later introduced the members of the EPC: Mr. Mason Albert, Mr. Richie Adams, Acting Director of the Department of Resources and Development, Mr. Mark Kostka, Camille Movick-Inatio, Mr. Kelly Keller, Mr. Leon Panuelo, Jr., and the EPA’s Secretariat under the Overseas Development Assistance (ODA) Unit, Ms. Shirley-Ann Ligohr. Governor Oliver, by law, is the Chairman of the EPC.

Senator Stevenson Joseph, Chairman of the 10th PSL Finance Committee, gave remarks on proposed legislation for an increase in the minimum wage to $2.50 per hour. He noted that increasing the minimum wage will have positive effects like enlarging the tax base and wage tax for the government. He also raised concerns that in doing so, operating expenses for businesses will increase which will, in turn, increase the prices of goods and services to cover increased labor costs.

Ms. Michaela Saimon, Chief of the Division of Commerce and Industries under the Department of Resources and Development gave a presentation on minimum wage policy and history. She referenced the Pohnpei Code and state law that requires a minimum wage review by the Chief of Personnel, Labor, and Manpower Development every three years or when deemed appropriate. In her presentation, she noted that the last increase to the present minimum wage was passed by the Pohnpei State Legislature in 2011 from $1.35 to $1.75 per hour. Quoting FSM Immigration statistics, she shared that over 8,000 people have left Pohnpei since 2019 to seek opportunities abroad. She also shared some pros and cons of a minimum wage increase, that included the following:

Higher wages means increased living standards
Increased employee retention, reduce hiring and training costs
More money in the pockets of workers will flow to the businesses
Increased wages will increase the costs of goods and services for businesses, which will, in turn, be passed to the consumer
Businesses will be forced to cut jobs to maintain profitability
The current pandemic situation is not the best time to address this issue

An open dialogue to discuss the issue was also provided with members of the business community, legislature, and members of the public sharing their views on the minimum wage. Mr. Richie Adams from the Pohnpei Chamber of Commerce spoke of the rising business costs due to shipping and availability of goods as a result of pandemic conditions. Speaking on behalf of the Price Control Commission, Ms. Marstella Jack, said the commission is also looking into the prices of goods and shipping costs, and their findings may contribute to future discussions on raising the minimum wage. Mr. Tendy Liwy spoke on behalf of the youth. He asked for the support and assistance of the Government and the private businesses to raise wages and employee benefits to keep the youth from leaving Pohnpei for opportunities abroad. In Governor Oliver’s closing remarks, he went over what was presented and discussed during the forum, briefly. He expressed his appreciation and gratitude for the cooperation and support of all parties involved to bring forth this public forum.

The forum was noted by many who attended as a good start to addressing this long-standing issue of raising the minimum wage. The forum was also broadcast live by V6AH.

The full video broadcast can be found online: https://youtu.be/xecjKXhIjYA

Further public discussion on this issue will be shared from the Governor’s Office and EPC Secretariat.