Palau government seeking to plug the brain drain by offering more incentives to keep skilled citizens home
Koror — There is an increasing number of college-level Palauans who have taken advantage of the summer fellowship program – returning home during the summer semester for internship with their potential future employers. The program is a recent government initiative to encourage Palauan students to explore job possibilities back home once they have graduated from college.
“Last summer alone had a larger group of 21 students who were awarded the fellowship program since the program began in 2013,” said Chur Oip, Scholarship Coordinator of the Palau National Scholarship Board.
Since its inception four years ago, the program has interned a total of 54 students. At least 16 have returned home for employment; others are still pursuing their undergraduate or graduate degrees.
Palau has been losing its educated and skilled citizens to better opportunities in the United States and its territories. The fellowship program seeks to stem the tide of many young educated Palauans choosing to pursue careers and settle outside of Palau despite millions of dollars in scholarship funds invested by the national government over many years.
The Palau National Scholarship Office shoulders round-trip airfares for eligible juniors and one-way tickets for graduating seniors, who will participate in the eight-week internship program. Each intern also receives a $400 stipend every two weeks.
Out-migration is more acute for young Palauans leaving home for greener pasture, contributing to the shrinkage of the nation’s population. Besides the lure of higher pay outside of Palau, many students fail to return because they feel there is shortage of attractive work opportunities back home.
The recent draft Palau National Youth Policy 2016-2010 noted a disproportionate decline in Palau’s population affecting those from the ages of 20-24, the college bound age. “If this disproportionate population decline continues, it likely will have a significant impact on Palau's future development, impacting Palau's already-limited workforce and further contributing to population declines,” states the document, which is awaiting endorsement by the Palau National Congress.
The paper recommends further efforts be made to address outward migration specifically among this age group, since this is the age range when most individuals enter the workforce and begin families.
The demographic data not only shows that the number of youth as a percentage of the total population has declined since Palau's independence 22 years ago, but also that the overall population in Palau is aging. In 1990, the median age of Palau’s population was 25.6 years. This number has slowly but steadily increased with each census. The 1995 median age was 28.1 years and it increased to 30.8 years in 2000 and reached 32.3 in 2005. It has since increased to 33.3 years in 2016 as estimated by CIA World Factbook.
After the Compact of Free Association agreement between Palau and United States came into existence in 1994, an exodus of Palauans seeking better life outside started. Under the agreement, citizens of Palau are granted uninhibited access to reside and work in the United States and its territories, and eligibility to volunteer for service in the U.S. Armed Forces. In return, the agreement allows the United States to operate armed forces in Palau, to demand land for operating bases, and excludes the militaries of other countries without U.S. permission.
With the Palau national leaders hoping to turn the tide and keeping their skilled and educated young citizens at home, their task has been made more difficult with lure of the U.S. military that provides the quickest way for the youth to see the world, get a steady paycheck and pay for college.
It is estimated that around 500 Palauans are active in the armed forces, many of them recruited out of high school campuses. The recruits, who establish stability overseas, use such economic security as a passport to bring over other family members to join them.
A year after the summer fellowship program was established — the Skilled Palauan Workforce Investment Act – to upgrade skills and increase entry level pay was put in place to mainstream and integrating youth development into the work of both the public sector and the private sector. The idea was to keep Palauans home-
bound during their productive years.
Currently, foreign workers make up 40 percent of the total labor force, mainly in the skilled labor industries. In contrast to Palauan citizens, more so with the youth population, continue to be an underutilized resource in the local country. The Skilled Palauan Workforce Investment Act was designed to mandate Palau Community College, the country’s sole institute of higher learning, to create a vocational certification program in which an emphasis is placed upon building technical skills that will translate directly towards employment in the area trained. The outcome is a vocation certification program that develops Palauan citizens for employment in the areas of the economy that demand technical skills.
In the end, the skilled workforce program develops skill for locals enhancing their employability while offering tax incentives for businesses to take a chance for hiring a local at higher wages to participate in local labor market.
Government employment is still the preferred choice for locals. It is stable and offers better salary, paid sick leave, a weekend off and pension. These incentives make it hard for the private businesses to compete with government for skilled workers. To make private employment more attractive, the government has increased the minimum wage by a dollar from $2.50 to $3.50, in increments of $0.25 spread over the last four years.
More incentives are being drawn up to drum up interest in the local labor force and encourage the educated and skilled Palauans abroad to return home. President Tommy E. Remengesau, for example, has introduced a bill to increase the minimum wage to $8.50 with an incremental increase of 50 cents per year for 10 years. Also a scheme to include the private sector employees to participate in the government pension plan is gaining traction with policymakers.
The young men and women of Palau in developing the national youth policy last year remarked that while Palau has made some forward progress by raising the minimum wage, there still is concern that Palau's minimum wage is inadequate for young people to support themselves and to support strong and independent families. They said programs that support young people as they transition from being a dependent in a family to becoming a head of their own household would go a long way to help Palau's young people transition to adulthood.
“While gains have been seen in both education and the educational outcomes of Palau’s youth, there still is much that can be improved in the education sector. The country still has an unacceptably high number of young people who are not in education, employment or training. While some progress has been made in getting government agencies involved in youth development, very little has been done to bring the private sector on board,” the young locals noted in putting forward the national youth policy.
They further said that improving the educational system needs to be a central focus of Palau’s youth development strategy. Expanding and improving available training programs are imperative if Palau’s young people are to be better prepared to enter the workforce and have the skills necessary to meet the needs of the local labor market.