By Bryan Manabat and Mar-Vic Cagurangan
Saipan – The Northern Mariana Islands relies heavily on skilled guest workers to fill most job positions in the private sector but policy changes have caused the labor pool to shrink over the years, exacerbating the commonwealth’s perennial labor deficit. According to the Government Accountability Office’s report last year, the number of foreign workers in the CNMI declined by 73 percent over two decades—from 36,000 in 2001 to 9,700 in 2020.
The temporary hiring of guest workers in the CNMI is allowed under the Commonwealth-Only Transition Worker Program, commonly known as CW-1.
The CNMI is facing another labor crisis that threatens to pause local economic activity, specifically in the construction industry. Hundreds of skilled workers are expected to exit the CNMI in the summer because of the "touchback" provision of the CNMI U.S. Workforce Act of 2018. The rule requires local employers to send their CW-1 workers back to their home countries every three years. The worker is required to remain outside of the U.S. jurisdiction for a minimum of 30 days.
The looming departure of workers comes at a time when the CNMI’s construction activity is boosted by the Bipartisan Infrastructure Law, which provided $114.4 million in fresh funds for more than a dozen projects including roads, bridges, public transit, ports, airports and water infrastructure.
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"Businesses, employers and the CNMI government should lobby for the suspension of the touchback provision," said Carlito Marquez, an officer of the United Filipino Organization and a mechanical engineer. "Not to scrap, repeal or to amend, as it will take more time in deliberation on the floor of the U.S. Congress.”
Marquez estimated that 2,000 or more CW-1 visa holders will exit CNMI after the touch-back rule takes effect on Sept. 30.
In a recent public statement, CNMI Labor Secretary Leila Staffler advised local employers to prepare for the exodus and eventual loss of their CW-1 employees. "It is unlikely for the U.S. Congress to remove the 'touchback' provision," she said.
The labor secretary encouraged employers to start recruiting U.S. workers, advising them to “take advantage of programs and seek the assistance of the Workforce Investment Agency Division, the Employment Services Division, and the DOL Apprenticeship Program.”
"These programs can be tailored to fill the gaps left by the departure of CWs and assist in the investment and training of your workforce," Staffler said in an email to the Pacific Island Times.
In February, Gov. Arnold I. Palacios asked U.S. lawmakers to repeal the touchback provision. "A large proportion of workers will be required to depart all at the same time without a clear timeline for their return, and at a time when businesses are attempting to regain normalcy in operations. The touchback provision’s disruptions to families, businesses, and the overall economy cannot be overstated.”
Moreover, the governor noted that the processing timelines for CW-1 permits “are so delayed that employers wait months after the petition start date to receive the necessary approvals to secure entry of the CW-1 permit holder to the CNMI.”
For his part, Rep. Gregorio “Kilili” Sablan, the CNMI’s delegate to the U.S. Congress, introduced H.R. 1420 to modify the “exit” requirement for CW-1 workers. The bill has been referred to the U.S. House Committee on Natural Resources and Judiciary.
Juanito Montano Jr., who has been a contract worker on Saipan since 2006, expressed concerns about the possibly long wait for the CW-1 processing. Ideally, he said, it would be more convenient if workers are allowed to exit after, not before, the CW-1 visa processing and approval.
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Marcelo Masilungan, a businessman and leader of the Filipino community on Saipan, is hoping for the suspension of the “touchback” provision. He noted that the CNMI situation has changed since the rule was adopted. "The economic conditions today is different from 2018. Another study should be done,” he said, suggesting that the “touchback” rule be postponed for another three years.
Local employers said there are not enough U.S. workers for certain jobs in the CNMI. The local labor department reported that the workers' exodus is likely to leave a huge labor gap in the areas of health, human services and construction.
The CNMI controlled its own labor and immigration until the federal government implemented the Consolidated Natural Resources Act of 2008, which extended federal immigration law to the Commonwealth as a result of reported labor abuses in the garment industry.
According to GAO’s report last year, the number of CW-1 permits approved by U.S. Citizenship and Immigration Services dropped from a high of 13,685 in 2017 to 5,365 in 2021. U.S. workers made up about half of the workforce in 2016 but rose to 59 percent in 2020, due in part to the Northern Marianas Long-term Legal Residents Act of June 2019 that allowed foreign workers with employment visas who met certain qualifications to become long-term residents of the CNMI. The size of the islands’ overall workforce grew from 2016 to 2017 before contracting by about 2,000 workers in 2018, and dropping by more than 5,000 workers from 2016 to 2020.
The CNMI’s labor situation experienced a series of setbacks in prior years. At the height of the Covid-19 pandemic, the federal government suspended labor imports.
In 2019, the U.S. Department of Homeland Security imposed a labor ban on the Philippines— the CNMI’s main source of labor— citing the country’s high rate of visa abuse and high volume of human trafficking. The CNMI at the time was in rehabilitation mode, rebuilding houses and repairing facilities damaged by a series of typhoons that plowed through Saipan, Tinian and Rota. The federal government lifted the ban in 2021 after the Department of Defense acknowledged the extreme labor shortages in the CNMI and Guam, where the military is reinforcing its presence.
In August last year, Tinian business owners called for the repeal of the CNRA. A survey showed that a majority of business owners believed that the federal government “has failed the businesses of the CNMI” and that “long-term foreign workers have earned the right to be given unconditional permanent CW status due to their years of service.”
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