More "Locals" in the CNMI Private Sector

November 28, 2010

It's fascinating that so many people talk about the lack of locals in the private sector, but at the same time fight against plans that will help to ensure that locals can fill jobs in the private sector. The CNMI government fought against raising the minimum wage and federalization for decades.  Both federalization and a higher minimum wage will help in increasing the percentage of locals employed in the private sector.

It has been interesting to see the differing perspectives on this issue expressed by CNMI Department of Labor Deputy Secretary Cinta Kaipat and Congressman Gregorio Kilili Sablan as reported in the local CNMI press.  Loyal Covenant Party member Kaipat blames the federal government for the small percentage of locals holding jobs in the private sector, while Congressman Sablan points out that it was the local government, not the federal government that brought the foreign workers to the CNMI.  He said that the local and federal governments should work together.  Wasn't that the purpose of the Forum on Economic and Labor Development sponsored by the Department of Interior earlier this month?

There are long-established obstacles and reasons why U.S. citizens in the CNMI cannot or do not want to fill jobs in the private sector:

Deep-rooted Corruption
The people with the highest paying jobs in the CNMI have been those who work in the public sector. Coveted government jobs are held out like carrots.  Locals have learned that they need to show loyalty to those in power, promise a vote or block of votes, campaign for the "right" party (the one that ends up winning), keep their mouth shut and eyes closed, and kiss up to those in power in order to land (and keep) a high paying government job. Not just locals, but also U.S. citizens from the mainland, have played the carrot game with the local government to land or keep a high-paying government job or to land a pricey government contract.

Will the government austerity measures lead to a realization that people should only be hired for a government job if they have the job experience and qualifications?  Will empty coffers be an incentive to eliminate unneeded positions and consolidate positions where one person could actually easily perform the responsibilities that two or more do? Time will tell, but established habits are difficult to break.
Minimum wage
The typical CNMI private sector job pays below U.S. minimum wage, and few people can live a high quality life on these poverty-level wages. Raise your hand if you want to work for under six dollars an hour! Minimum wage equals financial instability.  Financial instability breeds stress, health issues as a result of enough money to buy nutritional food and meet health care needs, inability to pay for utilities, transportation and other essentials.  Financial instability allows breeds crime. I imagine that many unemployed locals weigh the benefits of trying to survive on a minimum wage job or collecting food stamps and medicaid benefits while staying at home.  It seems a large number pick government handouts over a poor paying job.

Private sector wage levels in the CNMI are so out of kilter, that it's hard to imagine them inching closer to U.S. levels anytime soon.  Private sector employers have reaped huge profits because they have been allowed to highly educated and skilled foreign workers for poverty-level wages to perform high level jobs.  Where else in the U.S. can you find an accountant, nurse, electrical engineer, or architect who would work for poverty-level wages? No where.

Of course an enterprising person with an exceptional skill and/or education may be able to make a decent living in the CNMI working in the private sector, at least by CNMI standards.  Attorneys, educators, engineers, architects, medical personnel, computer programmers, shippers, investors, etc. may be able to find an employer who will pay them above minimum wage or better yet, start their own business.  Still, how many educated "locals" return to the CNMI without the capital to open their own business, knowing that there are more lucrative opportunities in the states?

Training and Education
PL 110-229 provides for technical assistance and training of the local workforce. Before any training programs should be established there should be a fine-tuned economic vision and blueprint for the CNMI. How can you train people if you don't know what jobs and skills are needed?

The CNMI leaders' vision for a strong economic future appears to concentrate on casino, gambling, legalizing marijuana and other crime-attracting ventures.  Talk of turning the old La Fiesta Mall into a gambling mecca and/or adult entertainment center is disheartening considering that the best attributes of the island could be showcased in the revitalized mall instead.  A cultural center with museums, shops that highlight native art and crafts and ethnic restaurants would attract more family-oriented tourists.  Hawaii became a prime tourist destination by focusing on the natural beauty and the culture.  The CNMI could easily clean up Saipan and follow in their footsteps.

Development of agriculture and aquaculture could also provide the CNMI with financial stability. Having a CNMI-specialized product similar to Ponape's pepper, Hawaii's pineapple may be a good idea. Hot pepper, pickled papaya, or another product could easily be promoted.

There is also some talk of promoting eco-tourism, which would provide another beneficial path for building a vital economy in the CNMI.  It would allow for a multitude of enterprising businesses to develop around marine activities including tours of outer islands, snorkeling, diving, organized treasure hunts, fishing derbies, kayaking and outriggers within the reefs, marine-related higher education courses, summer retreats/classes for children and adults, glass bottom boat tours, para sailing, sailing, etc.  Land-based eco-tourism could include hiking trails, tours of historical and archaeological sites, nature retreats, classes on medicinal remedies, education on the preservation of endangered species etc.

Was there a blueprint that came from the DOI forum? It would be interesting to read any recommendations.

Both Deputy Kaipat and Congressman Sablan must be aware of federal labor laws that prohibit local preference in hiring and discrimination in hiring, firing and other employment related issues. 

Here is what federal law says regarding U.S. citizen job preference:
Title VII

Title VII prohibits not only intentional discrimination, but also practices that have the effect of discriminating against individuals because of their race, color, national origin, religion, or sex.

National Origin Discrimination

It is illegal to discriminate against an individual because of birthplace, ancestry, culture, or linguistic characteristics common to a specific ethnic group.
A rule requiring that employees speak only English on the job may violate Title VII unless an employer shows that the requirement is necessary for conducting business. If the employer believes such a rule is necessary, employees must be informed when English is required and the consequences for violating the rule.
The Immigration Reform and Control Act (IRCA) of 1986 requires employers to assure that employees hired are legally authorized to work in the U.S. However, an employer who requests employment verification only for individuals of a particular national origin, or individuals who appear to be or sound foreign, may violate both Title VII and IRCA; verification must be obtained from all applicants and employees.
Employers who impose citizenship requirements or give preferences to U.S. citizens in hiring or employment opportunities also may violate IRCA.

Additional information about IRCA may be obtained from the Office of Special Counsel for Immigration-Related Unfair Employment Practices at 1-800-255-7688 (voice), 1-800-237-2515 (TTY for employees/applicants) or 1-800-362-2735 (TTY for employers) or at


The Saipan Blogger said...

I know you know this, but there is an unwritten understanding that all laws and policies in the CNMI follow the motto, "Locals First." People ask, "how will this affect the indigenous people" before considering the overall benefits. Often that concern is thrown out, however, if the price is right.

Anonymous said...

Years ago, when the minimum wage was $3.50, a family of three would only qualify for about $20 in food stamps.
If you didn't work you would get some where around $268. (cant remember the exact figure)
Best to work under the table at odd jobs while collecting.
Food stamps are easy to sell and/or purchase what you want even if it is are not on the list.
Now with the higher minimum wages many would be not eligible to collect (unless they have many dependents)

Anonymous said...

Raised wages will equate to more US citizen employees.

Anonymous said...

Prevailing wages (which exist in all current federal visas) for non-residents are the only way that U.S. workers will take over contract worker jobs.

If we increase the minimum wage to $7.00/hr., it wont solve the problem of skilled nurses, teacher, engineers, and accountants as they will just be earning $7.00/hr. Local graduates cannot compete with non-residents for those salaries.

Requiring businesses to pay non-residents a fair salary and recruit U.S. workers first stops exploitation of foreign workers and the local population.

When the CW visa regulations are released, expect no prevailing wages, more skilled non-resident labor coming from off-island (with deductions for visa fees) for $5.05/hr. and (no health insurance), and local graduates leaving for the mainland in search of a job.