Allotment of 3,000 CW permits pushed

Citing a shortage in manpower to perform large-scale projects, among other things, Gov. Ralph DLG Torres is seeking the permanent allotment of 3,000 CNMI-Only Transitional Worker (CW-1) permits to support construction activities in the CNMI.

In remarks that Finance Secretary David DLG Atalig delivered last Tuesday on behalf of Torres before the U.S. Senate Committee on Energy and Natural Resources, the governor asked for the U.S. Senate committee’s partnership in seeking the permanent allocation of 3,000 CW-1 permits to the CNMI during the transition period of the CW Visa Program. Torres wants the 3,000 permits to be separate from any presidentially-declared disasters in the CNMI.

Atalig delivered the same remarks at the Interagency Group on Insular Affairs meeting in Washington D.C. Torres was unable to personally deliver his remarks after testing positive for COVID-19 last weekend.

Torres said the permanent allotment of 3,000 CW-1 permits is important to deploy funding to support critical infrastructure projects and provide for an additional means to support employment across various sectors of the CNMI’s economy.

Under U.S. Public Law 115-218, CNMI employers are restricted from using the CW-1 Visa Program for the acquisition of construction workers for projects not related to a presidentially declared disaster. Torres said this restriction dramatically limits the available manpower to support public infrastructure projects provided in the Infrastructure Investment and Jobs Act, as it is not related to a disaster.

Citing the recent CNMI Economic Census, produced by the U.S. Census Bureau, Torres said the CNMI had 2,803 individuals employed in the Constructions Trade. Yet for one project alone, the Tinian Divert Airfield construction by the U.S. Air Force, Torres said this has the potential to require as much as 2,099 construction workers. This, he said, demonstrates the severe limitation on the ability of the CNMI to undertake large-scale and essential developments, the governor noted.

“As increased demands continue to be placed in support of ongoing developments, costs associated with construction will grow rapidly, reducing the efficacy of federal infrastructure dollars and limiting the range of opportunities that would otherwise be available per dollar of investment in the larger United States,” he said.

The governor said despite the considerable performance of the CNMI in increasing its U.S. worker percentages, the reality remains that there are not enough workers, let alone skilled construction workers, to support the growth and development of the CNMI economy or its infrastructure.

“With the historic investments across the nation, and with existing labor shortages, recruiting skilled U.S. workers to perform this work 8,000 miles away is even more difficult, costly, and unanticipated,” he said.

He said labor acquisition is further impeded by high transportation costs because of the CNMI’s geographic location and federal regulations governing air and sea transportation to the islands.

The governor noted that communities throughout the U.S. are experiencing similar labor challenges.

Torres said that, according to the U.S. Home Builder Institute in 2021, a lack of skilled construction labor is a key limiting factor for improving housing inventory and housing affordability, with the research supporting the estimation that the U.S. economy needs 2 million more construction workers in the labor force to meet this demand.

He said it was reported that the nation is experiencing the challenges the CNMI has faced for decades, namely not enough U.S. workers in the labor force to support economic growth.

Torres said these issues remain present in the CNMI but are vastly more severe and require a distinct set of solutions.

The governor told the committee that the CNMI has taken the mandates of the NMI U.S. Workforce Act seriously, and has made considerable progress for U.S. workers in the economy. Citing data collected from the CNMI Department of Labor and Labor Force Surveys conducted by the Office of the Governor as required under the NMI U.S. Workforce Act, Torres said the Commonwealth now has the highest percentage of U.S. workers in their labor force, earning more per hour than in any other time in recent history.

“This is a monumental success and should represent a new benchmark in our efforts to build a stronger economy and community for our citizens,” he said.

Yet, the governor said, progress for the CNMI’s labor force and economy have been set back by the global pandemic.

Torres said as tourism arrivals contracted, and restrictions aimed at mitigating the spread of the virus were implemented, businesses closed their doors, leaving thousands of employees in need of assistance.

He said while the Pandemic Unemployment Assistance provided many means to mitigate these impacts, he believes the most critical response effort lies in rebuilding the economy that supported these residents.

The governor said they have been working toward the resumption of arrivals to provide essential injection of external resources to the many businesses and employees that support, in one way or another, the tourism sector.

Torres said he is proud of the successes they have been able to achieve. However, he said, the tourism economy will take considerable time to recover.

“This is of significant concern for the CNMI as federal resources reach their expiry date, the CNMI has no alternative means to support economic activity,” the governor said.

Torres said the deployment of infrastructure development resources has the potential to fill this gap, and allow for the flow of capital to reach residents.

He said one of the greatest challenges facing the CNMI in the deployment of these funds is the availability and affordability of construction labor in the CNMI.

The governor said the relationship of infrastructure developments and access to labor under the CW-1 visa classification and the NMI U.S. Workforce Act is not solely limited to availability of workers.

Under the present law, the CNMI must produce an annual prevailing wage calculation that will govern the wages paid to employees petitioned under the CW-1 program.

Torres said should the sampling requirements for this survey provided by the U.S. Department of Labor not meet for a particular occupational category (i.e., three employers with 30 employees for each Standard Occupational Classification), then the wages revert to those in Guam or in the national prevailing wage for that specific occupation.

He said this requirement presents challenges that must be noted.

First, the governor pointed out, the CW-1 visa is the only program within the U.S. Immigration System that requires an annual survey. He said applications for H visas utilize a two-year timeframe for survey applicability.

“This presents a pronounced issue with labor market and business cycle fluctuations, wherein disruptions to the economy, such as disasters or industry closures, have a profound impact to the survey results that establish a benchmark for future surveys, leading to rapidly inflating costs that do not account for economic conditions,” he said.

Torres said this is especially true in the present conditions caused by COVID-19.

Today, he said, there are simply fewer businesses across sectors, resulting in fewer responses and a greater frequency of wages reverting to those outside of the CNMI.

Secondly, Torres said, the reversion to Guam wages negates the important distinctions between the two economies of this region.

Guam is a larger, more developed economy, with a different labor force makeup that supports different types of economic activity.

“One would not make the case that wages in California would appropriately depict the labor conditions in Oregon, yet for many occupations, wages represent the Guam economy and not the conditions of the CNMI,” he said.

Torres said this raises significant challenges to the long-term labor force planning required of large-scale development projects.

Torres said from the CNMI’s experience and from the data available, foreign workers aid in the economic growth of the CNMI and help increase the employment opportunities of U.S. workers.

“The CNMI will require substantial effort and investment to recover from this pandemic, and can only do so with access to skilled workers,” the governor said.