Feds to review NMI economic activity

Members of the U.S. Government Accountability Office will be arriving in the CNMI either on Nov. 28 or the first week of December to assess the overall climate of economic development, especially on Saipan. GAO, also called the “congressional watchdog” is an agency that provides auditing, evaluation, and investigative services for Congress.

Saipan Chamber of Commerce president Velma Palacios, in their yesterday general membership meeting at the Hyatt Regency Saipan’s SandCastle, said they met with GAO officials last September when Gov. Ralph DLG Torres and SCC secretary Alex Sablan testified in an oversight hearing of the House Committee on Natural Resources.

“We’ve met with GAO, an agency of the U.S. Congress, when they began to review the CNMI’s U.S. labor market policies. GAO will begin this work in response to a statutory requirement and a request made by [Delegate Gregorio “Kilili” Sablan] and a ranking member of the Senate Committee on Energy and Natural Resources,” said Palacios.

“[GAO is] mandated by Congress to conduct reviews on the impact of the minimum wage increase. And [Delegate Gregorio Sablan] also requested GAO to come here and a ranking House member to see firsthand the impact of the [CNMI-Only Transition Worker Nonimmigrant Visa] CW1 program because that is what we are focusing on right now.”

Labor market changes since the minimum wage increased, the CW1 workers’ role and significance to the CNMI economy, and how the U.S. and CNMI programs have promoted U.S. citizen training and employment are the things that GAO would cover in their review.

“It is basically to see what we’ve been doing with the minimum wage and how it has impacted the community,” said Palacios.

She added that GAO came here more four years ago, back when there was no development and economic activity in the CNMI due to the effects of the global financial crisis. “When they first came here, the economy was down. People were leaving to go to the mainland to look for jobs, some businesses either closed or cut their hours.”

“But right now we have a booming economy and there’s growth. It is different when they were here in 2012 and a lot of things happened after that. We see growth in investment, businesses are opening, a lot of franchises opened, and that’s why the more we need workers,” said Palacios.

She believes the minimum wage in the CNMI won’t be an issue since businesses complied with the 0.50-cent increase. “It has been increasing and some businesses have already been paying more than the federal level of $7.25 because it is needed, to remain competitive and keep your employees, especially those who are performing well.”

Palacios, however, again said that some small businesses won’t be able to afford the increase or they could raise the minimum wage of their workers but they have to also pass the cost to consumers.

She said GAO would meet and talk with business and other leaders in the CNMI to discuss issues that would affect the economy and labor matters. “GAO would make a report after that. They would come here and study everything. They are looking at April to present their report to Congress. Once [the report] is completed, they would give a more definitive timeline.”

Government support

Gov. Ralph DLG Torres and Delegate Gregorio Kilili C. Sablan said they continue to work with the business sector to find solutions to the CW1 issue. The governor and Sablan met last week to further discuss the matter before GAO’s scheduled visit.

Torres said GAO’s visit is important and timely. “We have spoken with GAO officials who are undertaking this important and timely review. I am confident that the numbers and the study will reflect the need for increased labor supply in our economy and the importance of increasing wages across the board for all CNMI workers.”

“I am looking forward to working with GAO on this project and believe that when the report is completed in the spring of 2017 it will provide us with useful and actionable data for the road ahead.”

Sablan said a coordinated effort is needed to address the CNMI’s labor issues. “I’ve met with the governor to discuss and coordinate our efforts to address the Commonwealth’s workforce challenges, now that employers have once again reached the annual CW1 cap. [We] also invited the leaders of several local business organizations to join us in the discussion.”

“I plan to continue supporting the governor’s 902 position by introducing his proposals as legislation in the new Congress that begins in January, as I already have done in the current Congress.”

He added that more meeting and dialogue would take place to resolve the issue. “And I look forward to a continuing dialogue with the governor on how to ensure that we put U.S. workers first when filling the jobs created by development in the Marianas.”