Workforce woes
WE commend the CNMI Department of Labor for reminding the community about the local Registered Apprenticeship Program or RAP, which aims to provide free on-the-job learning to local residents. Similar or related initiatives have been launched by PSS, NMC, NMTech, the chamber of commerce, and businesses themselves, which, like the local government, have been struggling with workforce issues since at least the Trust Territory era.
We urge eligible individuals and employers to avail themselves of RAP and other programs whose goal is to expand the local workforce in light of the CW “touchback provision” and other federal restrictions in hiring foreign workers.
However, we cannot oversell the adequacy of training programs in resolving a long-standing problem rooted in basic arithmetic. The local population is too small. There are not enough available U.S. workers, trained or untrained, in the NMI as indicated by previous GAO reports and by the NMI DOL secretary herself, who recently noted that even without the “touchback” provision in place, the Commonwealth doesn’t have enough construction workers. NMI employers, moreover, cannot afford to compete with U.S. employers who are also in dire need of workers.
The NMI DOL secretary also said that if local employers “haven’t made an effort to find new workers now, you will be in a bad place later if you don’t find something.” She’s right. But you know who else will be in a “bad place” if private sector employers don’t have enough workers? The NMI government…whose major source of local revenue for its operations is the private sector.
Everything is interconnected in an economy. Business that don’t have enough workers will either downsize or shut down. Which will result in less revenue for the financially strapped NMI government, the main employer of local residents.
Seen and unseen
IN a media release regarding the Registered Apprenticeship Program, CNMI DOL stated that the “earnings” of local workers “will circulate into our economy instead of money going outside the CNMI which is often the case with our foreign workers.” This is a widely popular notion spouted, now and then, by commentators and politicians since the TT era. It is, however, economically unsound because it implies that our primary economic goal is to possess money locally.
As economic professor Donald J. Boudreaux has pointed out, “Money is valuable only because it can be exchanged for real goods and services. Ultimately, wealth is not money and money is not wealth; ultimately wealth is the use of real goods and services.”
The wages paid to workers — local or not — are created through, among other things, the work they perform. In return for the work they perform, we get the things we need: a tourism industry, buildings, a telecommunications system, airports, seaports, power plants, water/wastewater systems, schools, a hospital, health clinics, restaurants, stores, paved roads, typhoon-proof homes, etc., etc. Workers, for their part, receive dollars — pieces of paper printed regularly by the federal government.
In the NMI, moreover, the economy is, in a way, based on “money going outside of the CNMI,” which includes not only a portion of the foreign workers’ wages (for which they pay NMI taxes; ditto the remittance centers). Where do you think our money “goes” when we buy vehicles, fuel, laptops, cell phones, clothes, grocery items, baby-care products, medicines, office supplies, equipment, construction materials, tools, furniture, non-local food items, etc., etc.?
Without them, how would money “circulate” in the local economy? Would there be a local economy to begin with?
And what do think will happen to the dollars that “left” the NMI or even the U.S. itself? As economists have pointed out, these U.S. dollars have to flow back to the U.S. to buy U.S. exports or assets — or used as reserves for future emergencies and/or future purchases. Meanwhile, the U.S. government can simply print more dollars while its citizens enjoy the products and services they have acquired by spending their dollars.
What the NMI should fear, in any case, is capital flight — the rapid movement of money out of a country or jurisdiction, typically in response to political or economic uncertainty. Like what we’re undergoing right now with a weakened tourism industry and a worker-shortage that is expected to get worse.
