GARAPAN Saipan — The public auditor is considering recommending to Gov. Benigno R. Fitial that employers be levied for hiring guest workers. The consideration comes after concern regarding the exodus of U.S. citizen workers to Guam Hawaii and the U.S. mainland due to the current economic crisis. “We are looking at a levy system a levy to be imposed on the hiring of a foreign worker per employee per month ” Michael S. Sablan public auditor told the Rotary Club of Saipan on Nov. 21 at the Hyatt Regency.
He said there would be a “transition cost” to employers which may be subsidized through a program that would be set up. Sablan said Singapore had done this “disincentive program ” and was successful in promoting local employment.
Sablan said a levy system would reduce employers’ dependence on foreign labor and encourage them to train locals instead.
He also noted that increasing the 10-year-old $3.05 local hourly minimum wage would be inevitable if the local government is to address the brain drain facing the local workforce.
“Salaries will have to go up for everyone. If an employer pays $4 an hour to attract a resident worker he will also have to pay the same rate offered to a nonresident worker. Market forces will eventually dictate an increase in the minimum wage ” Sablan said.
According to Sablan offering a resident worker higher rates could result in discrimination lawsuits against the company by nonresident workers.
Sablan said the exodus of islanders have reached levels of concern. He noted that in October the Northern Mariana Islands Retirement Fund made a record cash-out for a month that totaled $650 000 to beneficiaries who opted to collect their remaining checks in full. “Three out of four said they needed the money so they could move out ” Sablan said.
The public auditor in conjunction with private sector representatives has worked on what is called the CNMI Job Study.
Initial findings according to Sablan indicate an “out migration” of residents and the reluctance of college graduates from Guam Hawaii and the mainland to return to the islands for employment mainly because of:
They were not retirees. They were government employees who opted to cash out their contributions to the retirement program prior to qualifying for retirement benefits
The low minimum wage rate as compared to the average $5.15 in Guam and the states.
Provisions of the NMI Nonresident Workers Act allow for “too much flexibility” for the NMI Department of Labor to interpret and implement and lack of a clear-cut policy for “effective penalties.” This Sablan said has resulted in a situation where nonresident workers occupy positions — cashiers hotel receptionists administrative assistants boat operators and taxi drivers among them — that have been set aside by the law for U.S. citizens.
The austerity measures are being implemented by both the public and private sectors.
Citing latest figures from the NMI Department of Commerce Sablan said there are approximately 2 400 jobless U.S. citizens in the islands. This he said is an anomaly considering that there were approximately 30 000 new labor permits issued to nonresident workers last year.
A labor permit covers a one-year period.
Remittances by nonresident workers according to Sablan have increased from $80.5 million in 2003 to $112 million in 2005. Figures for this year he said could surpass last year’s.
Sablan said the report on the study is expected to be ready for presentation to the governor and lieutenant governor by mid-December. MBJ