Truth in (JVA) advertising

[I]House Vice Speaker Justo Quitugua said that based on OPA’s presentation, it was found that many employers in the CNMI have been coming up with schemes to avoid hiring local residents. For example, he said the private sector pays as much as $50 per hour to a nonresident but never puts that kind of rate in its advertisements.

“There are highly paid positions. They pay a manager for as high as $50 an hour and an accountant as high as $20 per hour but they only advertise the minimum wage to discourage the resident workers from applying,” Quitugua said.

“This practice should stop. We should impose fines for employers who violate or circumvent the law,” he said.[/I]

–Saipan Tribune [I]archives, Nov. 29, 2006[/I]

It is true, the jobs audit result which says that job vacancy announcements do not necessarily reflect the actual wage rate of the employee whose contract is being renewed. Whereas the JVA would show a rate of $4 to $5, the actual wage rate of that employee may be $10 or $15 or even higher. This rarely happens in entry-level positions where the minimum wage rate is already fixed and where there are hardly any resident workers scrambling for the positions available. Rather, this involves skilled or professional positions, where rates are higher and subject to negotiations between employer and employee. It is also true that some (and I stress the word “some”) employers actually use this ruse to mislead, to discourage qualified local resident workers from applying for the job by deflating the actual wage rate of their nonresident workers. This is particularly true when employers seek to attract or retain non-local workers who come from countries where high-paying jobs are a norm and where they are seeking to retain workers who speak a particular language. You know what those countries are (wink…wink). It would be easy to slam these employers and brand these “inaccurate” JVAs as despicable attempts to keep the local workforce unemployed. But as in everything else, the situation is much more complicated than that.

First of all, it is true that a JVA may advertise a lower wage level than the actual wage rate being given a nonresident worker but that nonresident worker may have already been with that company for a long time and his present wage level was attained after so many merit increases. He may have started at the wage level as advertised in the JVA but the number of years he has put in, the hundreds of training hours that have been spent on him, and the level of trust given him as an employee certainly gives him a right to the increased wage level. A local worker seeking that person’s job certainly has a lot of proving to do before he can claim a right to receive the same wage level. From the standpoint of an employer, why would I pay a new worker the same wage rates I pay a trusted and loyal nonresident worker, who has already put in so much number of years helping me run my business? Any new worker who will take over this post will have to start from a lower wage rate and work his way up. He not only has to prove himself reliable but he must also exhibit the same level of skills for him to get that promotion or pay raise he wants. In business, a sense of entitlement is always misplaced. Just because you are qualified for a position does not automatically mean that you bypass the years of service that a nonresident worker has already put in and get a wage rate already equal to that experienced worker.

Second, the last time I heard, the CNMI is still a free-market economy, where wages are dictated by market forces of demand and supply. Yes, we do have a minimum wage but that floor level is set for entry-level positions, for unskilled workers, for people who are just entering the workforce and don’t have the qualifications for higher wages. Anything higher than the minimum wage is already subject to negotiations between the employer and the employee. If I am an employer and I want to hire a worker, I would go for the lowest price to minimize my overhead costs. It will be up to the worker to negotiate with me on a higher pay if he wants that. And I sure as hell would not tell that applicant how much I am paying my current worker to give myself a better negotiating stance. The same holds true for JVAs. The wage rate advertised is usually a range, subject to the qualifications of the applicant. It gives employers a negotiating stance. That is also why some employers chuck their most experienced alien workers (who are already being paid higher than the minimum rate) for new employees, who are more willing to accept a lower rate. I would therefore caution lawmakers from legislating anything that would interfere with market forces as this only creates artificial situations that sap the vitality of an economy.

Third, a trusted employee is not someone you just discard like clothes at the end of the day. That would work in factories, where your value to a company is measured by your productivity on the factory floor but not so much in corporate settings where highly-paid nonresident workers usually occupy positions of trust and dependability. Thousands of training dollars and hours have already been spent on these employees and the notion that they will be replaced by new employees whom you will have to train again is not only economically unsound but works against the dynamics of human nature. Regardless of what the law says, a loyal and trusted employee has a much better chance of retaining his job because of the personal relationship he has already developed with his colleagues and immediate superiors than a new worker applying for the post.

[I](The views expressed are strictly that of the author. Vallejera is the editor of the Saipan Tribune.)[/I]