General

GAO: Removal of all CWs bad for NMI economy

AN official of the U.S. congressional watchdog says the removal of all guest workers on CW-1 permits will result in a 26 to 62 percent reduction in the CNMI’s Gross Domestic Product — “a relatively large negative effect on the economy.”

In his testimony before the U.S. Senate Committee on Energy and Natural Resources, Thursday, David Gootnick, director, international affairs and trade of the Government Accountability Office, also said that their “preliminary analysis shows that the current number of unemployed domestic workers in the CNMI is insufficient to replace the existing CW-1 workers or to fill all the nonconstruction jobs that planned development projects are expected to create once their business operations commence.”

Chaired by U.S. Sen. Lisa Murkowski, R-Alaska, the committee also heard the testimony of acting Interior Assistant Secretary for Insular Areas Nikolao I. Pula, CNMI Gov. Ralph D.L.G. Torres, U.S. Congressman Gregorio Kilili Camacho Sablan, Ind.-MP, and Saipan businessman Jim Arenovski.

All of them urged for the passage of Kilili’s bill, H.R. 339, or the Northern Mariana Islands Economic Expansion Act which proposes to raise the fiscal year 2017 CW cap from 12,998 to 15,000 and the CW fee from $150 to $200 which will be used for training local workers. The bill will also make most construction occupation positions ineligible for the CW program.

The bill has already been passed by the U.S. House of Representatives and is now pending in the U.S. Senate.

Sustainability

In her opening remarks Senator Murkowski said although “it is great to see the [CNMI] economy rebound…it is hard not to wonder if the CNMI would be in this situation [its lack of workers] had the business community taken the transition program seriously when Congress enacted the Consolidated Natural Resources Act back in 2008. We have not seen the progress we had hoped in moving away from foreign labor during the first five years, which led Congress to enact the hard 2019 sunset date for the transition program.”

She added, “As we consider the number of resort and casino projects lined up for development now in the CNMI, it is not clear how sustainable this investment is, what the capacity is to ensure the legality of activity, lots of moving parts here. The recent arrests of construction company representatives for employing and harboring Chinese workers who entered the CNMI on parolee/tourist visas is probably the most explicit and current example of these concerns. These are all questions that we need a better understanding of as we look at this legislation, which would provide temporary relief to roughly 2,000 foreign workers in the CNMI, and then, more importantly, as we look at the CNMI’s future post going forward.”

Help NMI help itself

In his testimony, Jim Arenovski said his Island Training Solutions, a regional licensee for the American Hotel and Lodging Educational Institute, offers a hospitality curriculum that provides a globally recognized hospitality certification.

“385 Marianas residents have been certified over the last three years,” he said, “and there are 73 currently enrolled. The pass rate is 95 percent and, not surprisingly, most of our graduates get hired quickly. The point I want to make is that with a limited pool of unemployed people, each person we train and help to get a job is going to be a story. We have to encourage. We have to build confidence and help people up again when the fall. And it all takes time. But I think we are making good progress. And H.R. 339, by putting more training funds into the system, will help that progress — maybe speed it along.”

He added, “By not passing H.R. 339 the U.S. Congress will have missed an opportunity to help the Marianas help itself. Our congressman and governor have opened opportunities for both businesses and local U.S. workers. They both know the importance of getting the labor situation in the NMI… right! Please give them the tools to continue this effort and work to pass H.R. 339.”

Trump administration supports the bill

Acting Interior Assistant Secretary for Insular Areas Nikolao I. Pula said “absent a long-term legislative solution that meets the labor needs of the Commonwealth of the Northern Mariana Islands, the [Trump] administration is in full support of the goals of H.R. 339.”

He said the “supply of United States-eligible employees will not meet the need [for workers in the CNMI]. Without relief on the labor front, projected investment in the CNMI likely will wither.”

Pula said the Trump administration believes that elements of H.R. 339 and H.R. 5888 “could be combined to provide a more viable long-term labor program.” Introduced by Congressman Kilili in the previous Congress, H.R. 5888 will increase the CW cap to 18,000 and extend the CW program until 2029.

“We look forward to working with the bill sponsor and this committee to identify the provisions that will address the CNMI’s labor needs and benefit the overall CNMI economy,” Pula said. “But given the consequences of no action at all, prompt passage of H.R. 339 is a necessary stop-gap measure.”

He noted that the CNMI “is facing the repatriation of a majority of its nurses in June, July and September; these 125 CW visa holders work on all three populated islands of Saipan, Tinian and Rota. We are concerned that, without legislative relief, many hospital functions will have to be terminated, creating a public health emergency. A similar concern has been raised for employees of the Commonwealth Utilities Corporation.”

NMI resurgence

Gov. Ralph Torres told the Senate committee that “when the CNMI entered into the immigration transition period…the state of the economy was in dire straits. The economy at the time had reached record lows. By 2009, our Gross Domestic Product was in its fifth consecutive year of decline, and, within a depressed economy, there existed minimal job opportunities for all who lived on the islands.”

He said in contrast, the local economy today, “while not completely rebounded from its years of depression, is showcasing a different reality. Today’s economy has the ability to hire and retain U.S.-eligible workers, to support rapidly increasing wages, both those which have risen by federal law and those that have increased organically through growing labor demands, and to grow its economy in a competitive and globalized marketplace. In the face of a wide array of structural constraints on the growth of small island economies such as ours, the remarkable nature of the CNMI’s resurgence cannot be understated.”

He added, “What makes me especially proud is that the growth of our economy is, more than any time in recent memory, built and sustained by U.S. eligible workers. Employment of domestic workers has increased by nearly 19 percent since its 15-year low in 2012. The CNMI today has more domestic workers in the labor force than any other time since 2004, and, in line with the goals of Public Law 110-229, today the CNMI can boast the highest ratio of domestic to foreign workers since the beginning of our modern economy in 1990.”

Torres said he “will continue to do all I can to ensure every able bodied U.S. worker in the CNMI finds lasting employment. In looking at the best examples from across our nation, I see one solution to increase U.S. citizen employment that has proven itself time and time again to be successful — grow the economy.”

Still not enough

But he said the ability “for our economy to grow is limited by simple math. The truth is the CNMI does not have the enough workers in all of the various fields and specialties to sustain the economic growth we need to avoid falling back into the severe economic depression we witnessed only a few short years ago. What filled this unmet demand for workers in the wide array of occupations in the CNMI and has allowed the economy to grow and to increase jobs for U.S. eligible workers has been the Commonwealth-only transitional worker or ‘CW’ program.”

He said fiscal year 2017 “marked the second consecutive year in which the CNMI economy reached its numerical limitation of permits under the CW program. These instances have highlighted what I believe to be the two main areas why H.R. 339 is so important, namely that there exist structural issues within the transition period that have limited the efficacy of the transition period and that CW permit holders remain a critical component of the CNMI economy and community.”

Two years ago, he added, “I requested U.S. Citizenship and Immigration Services to review the issuance of CW permits to individuals in the construction trades. In my view, CW permits were only for job categories not available under existing visa classifications, and that construction workers could be sourced through H2-B visas. As we look back at the CW permits issued in the last two years, it is evident that a large majority of the new permits that have led to the shortage have been in the construction trades. Removing construction workers from the eligible job categories for the CW permit will force employers to go to better suited visa classifications and alleviate the limited CW permits for occupations that are crucial for the overall economy and the needs of the people.”

He said the CW program is “also the directly vital to the livelihood of the people living in the Northern Marianas. This year, as a result of reaching the FY 2017 numerical limit on CW permits in October 2016, the CNMI’s sole hospital is facing a manpower crisis that will affect its operations and endanger the lives of the people they serve. Starting from this month to the end of this fiscal year, the hospital is set to lose 39 nurses whose CW permits expire without any available slots for them to renew. In most other jurisdictions 39 nurses may seem like an insignificant number, but in the CNMI the effects are certain to be dramatic…. From the moment of birth to the time of death, and nearly every significant point in between, our hospital will lose the critical staff that are needed in these moments of incredible vulnerability in a person’s life.”

Despite sincere efforts, Torres said the local hospital has been unable to hire U.S. eligible and qualified nurses that are not already employed by the Commonwealth Healthcare Corp. or private clinics. “Additionally, while Northern Marianas College offers a nursing program, it does not offer degree programs in laboratory, pharmacy or radiology, which are of critical demand.”

He said “the loss of these nurses if there is not a momentary increase in this year’s numerical allocation will directly affect the lives and safety of the people of the CNMI, and it certainly is one of the most critical concerns I wish to bring to the committee’s attention. However, to many varying extents, this situation is repeating itself across all sectors. Labor shortages are causing businesses to make difficult decisions on reducing hours of operation, planned closures, and many are uncertain of their ability to succeed in the CNMI.”

Torres said it is his “obligation to do all I can to offer my wholehearted support to work with your committee and the U.S. Congress in finding out what is possible, how your concerns can be addressed and how we can agree to allow our small islands the opportunity to improve and stand on our own feet among our fellow members of this great American community…. The simple truth is we need federal action to be allowed to succeed. I am not requesting a bailout, and I will do all I can to protect our fragile economy so that the CNMI does not become a ward of the federal government. All I am here today to ask is your willingness to have open conversations about how we can find success in the little, beautiful part of America 8,000 miles from this chair.”

Source of the problem

The author of H.R. 339, Congressman Kilili told the committee that “federal agencies — OSHA, Labor’s Wage and Hour Division, DOJ, and Immigration — have recently found apparent violations of federal law at a Chinese construction site in the Marianas.”

He said “this reminds us of the conditions that led to federal control of immigration — and gave our islands a black eye in the 1990s.” But “the difference today is that federal agencies are cracking down quickly on abuses. They have the full support of the commonwealth government. And we have legislation, H.R. 339, that actually addresses a source of the problem.”

Under Governor Torres’s watch, Kilili said, “the economy of the Marianas is reviving after many years of negative growth.” The congressman also praised Jim Arenovski for training local workers so they can replace foreign workers in the CNMI.

“I thank them both for coming all the way from the Marianas on very short notice,” Kilili said. “Their willingness to do so underscores the urgent need for the Senate to act.”

He said his bill “provides 2,002 additional one-year permits — available only for the rest of this fiscal year. This will help the hospital and those local businesses that are going to be short of workers just when business opportunity is growing. Not the situation we want business to be in.”

H.R. 339, moreover, “bars future use of the limited CW permit for temporary construction workers. Federal law already provides for an unlimited number of H- 2B visas to bring workers to the Marianas for temporary work. H.R. 339 forces employers to do so.”

He said his bill, in addition, “forces all employers to pay more to train U.S. workers to take over jobs now held by foreign workers — our ultimate goal. To date over $9 million has been collected and we have added 2,000 U.S. workers to the labor force. But we need to train more and we need to train faster. H.R. 339 increases the fee from $150 to $200, so we have the resources to do that training.”

He said his bill “is a temporary fix to a temporary problem,” and “it is urgent that the Senate act because losing foreign workers on whom businesses are dependent will immediately hurt the economy.”

He reiterated that his bill “includes permanent provisions that will help ensure we do not have this same problem again,” referring to the violations of federal law at the Imperial Pacific construction site in Garapan.

Source: Marianas Variety : http://www.mvariety.com/cnmi/cnmi-news/local/94864-gao-removal-of-all-cws-bad-for-nmi-economy

About the author

Relative Posts

Leave a Reply

Leave a Reply

Your email address will not be published.