THE U.S. Government Accountability Office highlighted in its recent report the increase in the number of U.S. workers in the CNMI.
The report, released on Tuesday, includes a graph that indicates a steady increase in the number of U.S. workers in the CNMI from 2018 to 2022. “U.S. workers comprised a greater portion of employed workers in 2022 than in 2018,” the report stated.
In 2018, the report added, 53% of the workforce in the CNMI consisted of U.S. workers. The rate went up to 59% in 2019, and at the onset of the Covid-19 pandemic, went up again to 63% in 2020, then to 65% in 2021 and soared to 71% in 2022.
The GAO noted that during this time, the local economy declined due to Super Typhoon Yutu, the Covid-19 pandemic, “and the closure of a major employer,” referring to Imperial Pacific International.
But while “the number of workers in CNMI increased between 2021 and 2022, CNMI is still at risk of a severe economic crisis and has limited prospects for recovery due to various factors. For example, its tourism industry is struggling, and its largest casino remains closed and unlikely to reopen soon. Tourism, the main driver of the economy, experienced a small increase in 2022 compared with 2020 but has not returned to pre-2017 levels, prior to the typhoon and the pandemic. The number of annual visitors remained below 100,000 in 2022 compared with nearly 700,000 in 2017,” the report stated.
The GAO at the same time said it “recommended ways to improve the territory’s annual worker ratio report, such as by adding key information about how the government categorizes workers as U.S. or foreign, to make the report easier to replicate and interpret.”
Very proud
In an email interview, CNMI Labor Secretary Leila Staffler said her department “is very proud to establish a standard operations procedure or SOP, which formalized this process last fiscal year.” She said with the help of GAO’s technical assistance, CNMI Labor has refined it further for increased accuracy and transparency.
She said prior to this year’s ratio report, there was no formal SOP established, hence the unknown variables in past reports.
“The ratio report is a product of both [CNMI] Labor and Finance Departments’ efforts to collect and analyze data provided in the W2 form,” she said. “This is also what prompted the DOL to conduct compliance outreach to businesses last year in October. Ensuring employers report the correct visa status in the W2 form also contributes to reduced variables in the report.”
She said the GAO report also highlights “the economic struggles the CNMI continues to face post-pandemic and the valiant efforts of the CNMI government to increase the ratio of U.S. workers in the CNMI.”
Senate President Edith Deleon Guerrero, a former CNMI Labor secretary, said U.S. workers are U.S. citizens and nationals, green-card holders and Freely Associated State citizens.
She said the increased ratio of U.S. workers is an indicator that employers are processing fewer CW-1 visas due to the economic downturn.
According to the GAO report, U.S. Citizenship and Immigration Services officials also noted that some CNMI employers “may have been deterred from applying for CW-1 permits when new requirements and higher fees for the CW-1 permit took effect in 2020.”
Deleon Guerrero noted that the 2023 allocation for CW-1 permits was 11,000 but only 5,789 were issued by USCIS. The number of approved permits in the prior years also did not exceed the allocations, she added.
‘Unknown’
In its report, the GAO said in addition to categorizing U.S. and foreign workers using the CNMI tax data, the GAO “categorized workers as ‘unknown’ when the data were insufficient to place them in the other two categories. Due to this unknown portion, the precise ratio of U.S. to foreign workers for each year is uncertain.”
The NMI U.S. Workforce Act of 2018 requires the CNMI governor to report annually on the ratio of U.S. to foreign workers. To create these reports, the CNMI government uses employers’ tax data.
“However, it has reported that these data include a relatively high share of workers with unknown visa types — from 13 to 33 percent in the 2018 to 2021 reports, making the precise ratio of U.S. to foreign workers uncertain. CNMI has recently taken steps to improve its data analysis process, reducing the unknown portion of workers to 4 percent in the 2022 data,” the GAO said.
“The CNMI government has taken some steps to communicate the analytical approach it uses to create its annual worker ratio report. For example, it uses the report and a Standard Operating Procedure to communicate some of its analytical approach. However, these documents do not include key information such as the approach CNMI uses to categorize unknown workers as U.S. or foreign, as well as the implications of the unknown portion for the ratio. Key elements of economic analysis call for transparency of an analytical approach to allow the public to assess its structure and to understand how much of its result hinges on the specific choices made by the authors,” the report added.
