Labor to check wages offered by govt contractors

The Division of Employment Services and Training vowed yesterday to scrutinize employment contracts being submitted by government contractors to ensure compliance with the governor’s order requiring them to pay workers at least the U.S. minimum wage.

DEST director Alfred Pangelinan said his division particularly aims to ensure that government contractors are advertising the right wage amounts when they announce available jobs.

Pangelinan noted that the intent of the governor’s directive, after all, is to encourage more resident workers to apply for private sector jobs.

“We are looking into contracts more closely to ensure that employers are reporting the right wage amount, although no one has been caught trying to mislead us so far,” he said.

He said one of the steps his office has taken was to revise its job vacancy announcement form to require employers to declare if they have been awarded government service and capital improvement project contracts.

He said the Division of Procurement has also provided Employment Services a list of all employers with government contracts. DEST will be using the list as cross-reference when reviewing employment contracts.

In a May 20, 2003 directive, Gov. Juan N. Babauta raised the minimum hourly wage to $5.15—then the prevailing U.S. minimum wage—for all employees working directly or indirectly on CIPs and other government projects.

Last July, Babauta again increased to $5.75 the minimum hourly wage for workers involved in government projects. This amount will further increase to $6.75 starting Jan. 1, 2005.

Babauta made the move amid a high unemployment rate among local people, particularly among entry-level workers. He cited the 2000 census which revealed that, of the 958 persons 16-19 years of age and not in school, 39 percent were unemployed.

“This is the population of persons who might be expected to be starting their working life at minimum wage jobs. For these people, however, there is a strong disincentive to look for work and accept employment, namely, the current minimum wage of $3.05 per hour—not a living wage,” Babauta said.

He added that the high availability of foreign workers willing to work for $3.05 per hour and the resulting ease with which employers meet their labor demand exacerbates the disincentive to the local workforce.

Further, the governor said the low wage rate in the private sector puts pressure on the government to hire.

“As a result, the CNMI employs a larger number of workers than the typical U.S. jurisdiction. Whereas in [the] States the ratio of government employees to population is 536/10,000; in the CNMI, the ratio is 662/10,000,” Babauta said.