MOST people who discuss NMI workforce issues are unaware of local workforce history— or even the workforce issues that continue to bedevil the U.S. and other countries. Hence, many of their proposed “solutions” in the NMI are either already in place or have been implemented in one form or another since the TT era.
The actual problem is that there are not enough local workers for certain jobs: construction, healthcare, caregiving, trades, hospitality, etc. And these are the same jobs that also need more workers in the U.S. and other prosperous countries, which have a variety of apprenticeship and training programs. NMI employers, for their part, are already paying federally mandated prevailing wage rates if they want to hire CWs. But they cannot possibly compete with stateside employers, who can pay much more and offer more benefits that do not include moving to a remote, faraway island thousands of miles away, in an area known as “typhoon alley.”
In the NMI, nonresident workers powered the economic boom during the Japanese administration before the war. Nonresident workers, especially construction workers, were also brought in by the U.S.-administered Trust Territory government.
Today, besides the U.S., Japan, Germany and other prosperous nations with big populations are hiring foreign workers for specific jobs — usually the same jobs that the NMI needs.
Moreover, there are now labor shortages in countries like China and Vietnam, part of what the Wall Street Journal says is “the world’s factory floor and the source of much of the stuff Americans buy.”
In China, the youth unemployment rate is high (up 20.4% in April 2023) even though there are plenty of jobs available. Delivery drivers and restaurant waiters, among other similar jobs, are “in demand, but many young job-seekers have college diplomas “and are uninterested in blue-collar jobs.” According to the WSJ, “A survey by Zhaopin.com, an online recruitment platform, shows that around 30% of college students graduating this summer desire to work in the internet, telecommunications and education sectors.”
Sounds familiar?
In Vietnam, the WSJ says young people, by and large, don’t want to work in factories. “Everybody wants to be an Instagrammer or a photographer or a stylist or work at a coffee shop,” an employer said.
The WSJ noted that multinational companies are already moving production from China to Malaysia, Indonesia, Vietnam and India. But factory “owners there said they, too, are struggling to get young people to sign up.”
The WSJ reported that factory wages in Vietnam “have more than doubled since 2011… — three times the rate of increase in the U.S., according to data from the United Nations International Labor Organization. In China, factory wages rose 122% from 2012 to 2021, the latest period for which the U.N. data is available.”
In response to the crisis, the WSJ said “Asian factories have had to [further] increase wages and adopt sometimes costly strategies to retain workers, from improving cafeteria fare to building kindergartens for workers’ children.”
What is the usual result of these labor shortages? Higher costs that consumers will end up paying.
In the NMI, there are workers available and are already here, hired through the federal process. But the same process, devised by faraway politicians and bureaucrats, many of whom are unfamiliar with the NMI, also include a “touchback” provision. The — for lack of a better word — “thinking” behind it is purely political: it is “popular” among many voters. Hence, only politicians and bureaucrats can come up with such a rule. CWs were hired to fill jobs for which there are not enough U.S. workers. But after three years, the CW must “exit” to “encourage” the hiring of U.S. workers who, supposedly, should be available already — despite the well-documented (worsening) labor shortages reported not only in the NMI but on Guam and the states themselves. In many countries where there are labor shortages, governments are trying hard to recruit and/or bring workers in. Here in the NMI where the workers are already in place, the federal government is trying hard to shoo them away while politicians and bureaucrats tell businesspersons how to run their businesses.
The economist Milton Friedman supposedly said that if you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand. It was supposed to be a joke. But replace “the Sahara Desert” with “workers,” and “sand” with “workers,” and it’s no longer funny.
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