Will Workers Come from the US Mainland?

Some members of the US Congress and others in Washington are under the impression that an increase in the minimum wage from $3.05 per hour to the current level of $5.15 or higher would stimulate an influx of US citizens to the Northern Islands to permanently replace nonresident workers. I posed this subject to Bill Stewart, an economist formerly with the CNMI government and longtime resident of the CNMI. Here is his reply.

“I think not. The fact is that some US citizens do come to the islands to work, but a great many do not remain. Many people from large metropolitan areas on the US mainland and elsewhere do move to the islands for employment reasons. However, they find adjustment difficult and do not remain long after their “initial” enthusiasm wears off.

Usually disenchantment of one spouse or the other is likely to result from one or more of the following: high cost of living compared with the US particularly for rent, utilities and food, limited and expensive supply of fresh vegetables; perceived limited medical facilities or educational opportunities; inability to adapt to a different environment; low wages and salaries compared with the mainland for both skilled and unskilled workers; limited employment opportunities for a spouse; the expense of moving household effects vast distances and the cost of re-establishing one’s household; and the expense of returning for frequent visits to family members.

Opportunities for professional growth are limited, as are cultural activities. The climate is hot and humid. There is no scheduled public transportation. In some areas there still are water shortages. And in several cases the inability to own their own home in fee simple.”

I personally can cite stories concerning US workers who came to work for me and in other companies in Saipan but have since returned home for one or more of the above reasons. The number of US workers remaining is truly low compared to the number who leave after a short while.

Bill continued: ” The rebate on the NMI Territorial Tax is not, in my opinion, the lucrative incentive for the average wage earner that many seem to think it is. For the average wage earner, the rebate, which can range from 50 to 90 percent of the tax paid, hardly covers the added cost of living in the CNMI for the non-local individual. If you doubt this ask any “off island” US citizen employed as a contract teacher, health provider or middle manager.

The Commonwealth at the present time is one of the most expensive areas under the American flag in which to live and will remain so because we are subject to inflationary pressures from both of our primary supply sources in Japan and the United States plus the added cost of shipping and the effects of typhoons and food spoilage as a result of power outrages.

The above are some of the reasons people leave the islands after a relatively short period and return to the US mainland with the result that the US mainland does not appear to be the source, or solution, for the island’s workforce that one might assume. It has been primarily the Philippines to which island employers have usually turned to. Filipino people assimilate well into island society by virtue of a common religion, the English language, and in many cases they posses a similar island heritage.”

We are caught in a dilemma. A large workforce is needed to continue our present economic status and to allow for growth. Several sources are available: local skilled labor, neighboring islands personnel and continued importing non-resident workers. But not an influx of US mainlanders.