The voters, candidates, elections, and…

In Zaldy Dandan’s column on June 24, 2005, he put his finger exactly on the issue that everyone talks about but no politician can call for publicly in an election year. That issue is: The very solutions that are OK to say in private are election suicide for any politician to call for in public. Put another way, most local voters personally understand the problems and the hard solutions but they won’t vote for a politician who promises to implement those hard solutions.

As he said, “Take education for example. Everyone running for office is ‘for education’ but no one wants to say…where exactly will he…get the additional funding—and how.” He went on to say, “There has to be more discussions of competing ideas.” Indeed.

Let’s take four severe problems (there are many others of course):

1) Government failure to pay CUC, thus requiring CUC to put the failure to pay on us—the public and the business sector. They call it a “surcharge.” It is really a “tax” and a penalty assessed on the general public for the government’s failure to pay its share to CUC;

2) Government failure to pay the Retirement Fund so that the Fund has to a) use money invested to pay for future retiree costs, thus putting all potential retirees at risk of “losing” their retirement check; and, b) government failure to pay the Fund for retiree Cost of Living Allowances due since January 2005. The Fund in return is now increasing the government contributions based upon an independent study, at the very time the government is not even paying the full amount of the lower contribution to the Fund. The Fund is threatening to sue the government (with good reason) for the funding the government, by law, should be paying;

3) Government failure to adequately fund education, i.e., PSS and NMC; and,

4) Government and private sector failure to address the chronic and very widespread problems of unemployment and under-employment (low paying jobs) of local people.

The voters might start by asking some questions. How can 1), 2), and 3) be a problem when this government is spending a deficit of some $10 million a year?

For the government to not pay CUC a reasonable estimated amount for actual electricity used by claiming it disagrees with the total amount CUC says is owed for past electricity bills defies logic. For CUC to then pass on the missing government payments burden to us the voters is unacceptable, especially since this government appointed the directors of CUC. The government should pay the estimated current costs and argue about past years bills later. Does that make sense?

The huge number of un- and under-employed local people in the private sector, while their counterparts in the government enjoy comparatively enormous salaries and benefits, must change. The CNMI government, and the private sector employers have no choice but to make hard choices and improvements. This includes addressing the minimum wage and replacing nonresident workers with local residents and paying a reasonable salary.

How is it possible that the Department of Labor could process thousands of applications by nonresident workers, and help them find employment—even when there are no jobs for them in their original job area for which they were hired—while hundreds, maybe up to 2,000, local people cannot find a living wage job, or have a low paying job in the private sector?

Recently the Department of Labor released figures that showed some 880 local people applied for assistance seeking employment. Only 11 percent or about 89 locals were hired. How is this possible when we see hundreds of ads every week for employment in the private sector?

Nonresident workers receive a minimum wage of $3.05 plus an estimated $4 of additional benefits. Local workers receive the minimum and no benefits. How is this possible? Who runs the government? Who are the voters? Who are the elected officials? Who makes the rules? Local people. What is going on here?

Nonresident workers come here knowing the wage. Why do they come and why don’t they want to leave? It is because they can earn up to 10 times more an hour here than in their own country. That’s great for them. How is it for local people?

Why are most of the accountants and bookkeepers, media sector people, service sector, tourism sector, and many white-collar jobs in every private sector area filled by nonresident workers?

Why has the government spent more than $300 million taxpayer dollars over the last 15 years to educate local youth to the high school and college level so they can work for $3.05 an hour? Why are the taxpayers footing the bill for turning our government into a hiring agency for non-local workers who no longer have a job? We have a moral obligation to employ local residents at a living wage. Our government currently clearly disagrees.

This can be changed as there are hundreds of professional, white-collar, and other jobs held by nonresident workers, which could be filled by local workers at a decent salary.

What then are the solutions to the problems in the CNMI? What do the politicians say? What are their plans? Here are some of my suggestions to get the discussion going.

First, the solution to all of the four problems noted above is money. The problem is where to get it. Will the candidates offer plans that will actually result in additional revenue to address issues that money can solve, if spent appropriately?

Here are some hard unpopular actions that would save the government some $154 million over the next four years.

1) Eliminate the tax rebate system immediately. This system was implemented when the government could afford to pay, when revenue was high. The rebate is not a right. It is not an entitlement. It is based on the ability of the government to fund it. That time has passed—long ago. This action would save the government about $26 million a year. That equals a savings of $104 million. This is almost enough by itself to pay off the entire government deficit.

First of all, this current government has proven that most people could get along without the rebate. There are rebates still outstanding from three years ago.

Second, taxpayers are paying the cost of this rebate through increased social costs, health costs, increased crime costs, and in many other ways, e.g., the electricity surcharge.

Who pays for all the extra kidney dialysis costs, other poor health problem costs, crime costs, social system problems costs and so on? The taxpayer. And who pays for the cost to people who lose a foot or a leg, or eyesight, or their life; or become addicted; or the cost to a victim of abuse or a crime; or the cost to their families in terms of pain and suffering; or, the loss to the community in terms of not receiving the positive contribution from healthy educated community members who have access to fulfilling careers paying a living wage?

2) Consolidate all the Affairs Offices—Indigenous, Women’s, Youth, Carolinian, and Veterans—into one office, perhaps a Community Affairs Office. In fact we already have one called the Department of Community and Cultural Affairs. Doesn’t that name directly imply inclusion of all the other Affairs offices? It seems to. This would save some $5 million over four years.

Now we have saved $109 million over four years. That is more than $27 million a year we could use to improve education, pay CUC and Retirement Fund debts, and encourage the private sector to hire local people. These local people, by the way, would not be sending most of their money out of the CNMI every year, as do our guest workers. The private sector would benefit by a portion of this money spent in the local economy, plus the extra buying power of local employee’s who receive a decent wage.

3) Enforce absolutely all of the laws, regulations, and policies that require local private sector businesses to hire local employees.

There are numerous regulations that would reduce nonresident workers and open appropriate jobs for local people, except the government passes other laws that defeat this goal. The government needs to enforce current laws. The local government, elected by local voters, passes and implements laws and policies that now help to keep nonresident workers in the CNMI—even when they no longer have jobs. They do this at the same time as hundreds/thousands of local people are un- or under-employed. Does this make sense to you?

It need not be this way. Obviously there are not enough local people to fill all nonresident jobs. However, we only need to fill a modest percentage (say 15 percent—4,500) of the 30,000 nonresident worker jobs to employ all local people who want to work—but at a decent living wage: a wage a family could live on and at least modestly enjoy life.

We could also reduce the government workforce and provide those former government employee’s with good private sector jobs. The politicians we vote for could do it by working with the private sector as a partner. It can be done. There are businesses in the private sector that employ a high percentage of local people at reasonable wages. Successful examples exist.

Mr. Mike Sablan, the Public Auditor (though in the government sector), came into an office filled almost exclusively with nonresident accountants, CPAs, and other professionals and white-collar workers. It was said, prior to his arrival as Public Auditor, that there were no local people qualified or who had the work ethic to do ‘that’ type of work. Wrong. Today, almost everyone at every level is a local person, qualified, and productive.

Mr. Sablan implemented a well thought out program of talent search in the CNMI, and through the Scholarship Office, tracked CNMI scholarship recipient college students and graduates with degrees and certification in the appropriate areas.

He introduced an Internship Program to give potentially qualified local people a chance to learn their duties and responsibilities, and practice and hone their skills. And, he gave potential and hired employees an opportunity to obtain additional training if they were close but not quite qualified. He also offered on-the-job training.

This is an excellent employee development model. Not all parts are appropriate for every private sector business, but many are. It can be done.

A savings to the government in reduced numbers of government workers needed for programs to deal with the replaced 4,500 nonresident workers would clearly be realized. A modest estimated savings of 50 government workers in all areas dealing with nonresident services is reasonable. Average wage saved, with 27 percent fringe benefits, would be about $30,000 a year (remember we wouldn’t need so many supervisors either) times 50 workers is $1,500,000 a year, or $6 million over four years. Now we have saved $115 million over four years. That is a savings of almost $29 million a year.

That $29 million dollars a year could go for education, CUC and Retirement Fund costs, incentive programs to hire local workers in meaningful rewarding jobs at a reasonable salary.

4) Privatize—very carefully—services now duplicated by government that could be done by the private sector cheaper, and create good jobs for local people in the process. What could be privatized? The PSS bus service (with their approval as their autonomy must be respected), the Public Works vehicle repair program, parts of CUC, and the outpatient section of CHC come to mind. There are many others.

How much would this save? A guess would be some $10 million per year. That is $40 million over four years. Now we have saved almost $39 million a year. That is $154 million over four years. That is $39 million extra a year that could go to government debt and bill payment, better education, improved health care and improving other vital services.

4) Increase the term of the House of Representatives from two to four years. This may seem strange to suggest. However, it is essential to implementing at least some of the politically explosive actions that need to be taken if real improvement is ever to take place.

A two-year term does not provide enough time for the above suggested (and many other) actions to result in major improvements. Over four years voters would “see” real improvements.

The issue of the minimum wage must be addressed if the above problems and solutions are to become permanent. If the government takes the actions to improve its services, reduce its costs, trim its size, then something in return will be expected from the private sector.

A serious problem is that most politicians have no practical business, economic, or private sector experience. That is certainly clear from government actions. Voters might want to give more weight to candidates who have private sector business experience.

The government exists because of the private sector. Everyone should remember that if one part of the sector goes, there must be a plan already in place to make up for the lost revenue. The garment industry is a very good example. Elected officials should give this concept of nurturing the private sector a great deal more weight than in the past.

A few of these actions—changing the term of office in the House of Representatives for one—would require Constitutional amendment. A Constitutional Convention is coming up.

Some of the community will be unhappy with this letter. However, you voters, taxpayers, and candidates should think long and hard about solutions to these problems (and others). If you don’t like what you read here, speak up, do something positive to improve the quality of life for everyone in the community, even if the immediate results are painful. Think about the long-term benefits.

Think about improving the quality of life for all residents. Think about the youth and families who have left the CNMI for education and employment in the U.S., and have stayed there because no meaningfully paying jobs are available in the CNMI. This is a profound loss. Think about the thousands of local people in their own homeland here who suffer as un- or under-employed workers. Think about the impact on the families—on you. Are all of the changes to solve these problems stated here, and others, worth the short-term inconvenience? Are they worth the long-term benefits to our community, to you, to your family?

You, the voters, must decide.

Daniel H. Nielsen
Saipan