Not enough workers, not enough funds to train new ones

Editor’s Note: The following is part of a continuing series of articles that Saipan Tribune will be publishing to examine in depth a number of issues in the Commonwealth that may have repercussions in the years ahead.

Projections that there will not be enough people or funds to meet expected workforce demands loom—only a year after the contract worker program was extended another five years.

At the Saipan Chamber of Commerce general meeting Wednesday, president Alex Sablan said the Commonwealth is experiencing and is projected to continue to experience a labor shortage despite ongoing plans and efforts to make sure the transition to 2019 will push through.

The problem is made worse by the many new development projects going up on both Saipan and Tinian. With a planned casino resort going up and several major hotel constructions in the pipeline, there is not enough number of skilled workers that will be needed for all these projects.

The biggest question is: Where will all the workers that are going to be needed come from?

The Public School System, the Northern Marianas College, and Northern Marianas Technical Institute have pushed their CW fee funds into programs designed to train locals for the workforce, but both labor and education officials have stressed recently the lack of resources to meet such targets.

For one, Northern Marianas College dean David Attao projected that they will need more than $68.8 million this year for the college to train and replace skilled workers in key “job zones” as described by the CNMI Commerce Department in 2012.

“We do not see a solution in sight in short of getting as many people trained, educated and moving through the system here with the workforce development,” Sablan said on Wednesday.

“…We need to have a game plan in place. I believe we have a game plan but we’re going to be short,” he told the business community.

Sablan, in the Chamber’s newsletter, further stated that the dilemma is that most of the funding for training is coming from the U.S. federal government.

He was referring to the annual $150 fee charged for every non-immigrant worker employed by businesses in the CNMI.

“The cost of educating, training, and certifying our people for the workforce cannot be borne on federal dollars alone,” he wrote.

The fee

CNMI Labor Secretary Edith Deleon Guerrero echoed Sablan’s concern in a recent interview, saying the $150 fee is “not enough.”

“When you look at the data of what [funds] we get—and you plan out for training, for [workforce] transition—there’s no way that $150 is going to train or be sufficient enough to train, let’s say, 900 workers in a profession like carpentry. We can do the math,” Guerrero said.

Guerrero raised this question: Who arrived at the $150 amount and decided that it was sufficient to develop the CNMI’s workforce?

“We are responding to the call of transition because we are doing everything that we’re doing now. But are we going to get there to really transition out, totally, 100 percent? It’s not going to be possible,” Guerrero said.

Gov. Eloy S. Inos, responding to questions on Labor concerns, explained that the reasons why CW funds are not enough is because there are not enough contract worker holders or workers allowed in the CNMI.

“The reason why funds are not enough is because we don’t have enough CWs. You see the $150 is per CW worker. If the total of CW fees are not enough, then we will bring in more CW worker so that more payments will be made,” he said.

How fees are used

According to the information provided by Labor and gathered from CNMI educational institutions, CW fee expenditures go largely to salaries as well as critical supportive materials and utilities.

The Public School System spends every year in excess of $500,000—the allocated CW amount given to them—just for their vocational programs program salaries and benefits.

For this past school year, PSS has shared with Labor that they spend over $800,000 from their Consolidated Education grant for their Cooperative Education program, $200,000 for the “Career and Technical Education, or CTE supplies, and use their $500,00 from CW funds for CTE salaries.

According to a Cooperative Education report for fiscal year 2014, PSS placed 126 student in the private sector and 52 students in the private sector.

PSS expanded their Co-Op program this year to see a 200-percent increase in student enrollment in the first semester this year, or some 300 students.

NMC spent a tad shy under $500,000 for fiscal year 2014, or some $496,384.

In the CW report for fiscal year 2014, the college describes expenses for key workforce personnel, for servicing over 223 people in “soft skills” workforce development programs, for 13 students who completed an on-the-job trainee program, a carpentry workshop, and for their nursing, business, and education programs, among other related expenses.

About $280,386 was for salaries and benefits. About $129,703 was spent on contractual services for their NMC Community Development Institute. About $40,316 went to “other” expenditures, or training and development fees, membership and dues, and utilities expenses for Tinian campus. A total of $31, 853 of this was for the Tinian campus utilities.

The college also spent about $28,000 for supplies and student stipends and wages.

About $17, 597 was spent for travel and professional development.

For fiscal year 2014, the college spent a little over $122, 000 for salaries and benefits, about $178,000 for contractual services, about $173,000 for utilities, and the rest for travel, supplies, student, and other expenses.

NMTI, according to the most recent data provided to Labor as of May 2014, reported a total grant amount of $400,000 reduced to $311,476 after unspecified expenditures on personnel, benefits, and all other account.

This $311,476 was broken down into $111,612 for salaries and benefits, and $54,925 for instructors, $55,200 for professional fees, about $19,926 for operations supplies, $14,080 for repairs and maintenance, $8,339 for travel and mileage reimbursement, and the rest for printing and office, fuel, printing, communications, and other expenses.

NMTI also reported rent costs to the Department of Public Lands for $34,557.

NMTI deploys hotel and restaurant operations, auto mechanics, and construction trades programs.

Right now, NMTI is collaborating with Kagman High School to offer auto mechanics and hotel operations at the high school as a pilot project.

According to NMIT, they are communicating with Saipan high schools in their aim to offer at least three to four different trades programs in all of the island’s three public high schools by school year 2015-2016.

Working together

Tan Holdings president Jerry Tan expressed the need for the public and private sector to work harder together to address the labor shortage.

Considering the economic growth over the last 18 months, he said, there is almost a 10-percent growth in tourist arrivals. He also called “encouraging news” the arrival of more investors opening various-sized businesses.

“But as the economy continues to grow, the labor requirement also increases,” he added. “So it’s safe to say that the need for foreign workers in the CNMI will continue, especially when the economy continues to expand,” he said, also noting Saipan’s “very small population base.”

“We have to do more for our high school graduates. Those that choose to continue higher education, those that are not going into the military, [those that] decide to stay home on Saipan, Tinian, and Rota,” he said.

“We need to recognize that every year there are hundreds of high school grads that may be looking for jobs but may not be ready experience-wise, skill-wise,” he said. (With Dennis Chan)