March 3, 1998

Moderator: T. Alexander Aleinikoff, Senior Associate, International Migration Policy Program, Carnegie Endowment for International Peace

Panelists: Alex Gisser, Associate General Counsel at the U.S. Immigration & Naturalization Service; Allen Stayman, Director of the Office of Insular Affairs at the U.S. Department of Interior

Mr. Aleinikoff introduced the panelists and welcomed them to the Carnegie Endowment. The CNMI has come under scrutiny, Mr. Aleinikoff noted, for what critics charge is an exploitative immigration policy. Such criticism has been the impetus for a Clinton administration bill that would apply federal immigration and wage rules to the CNMI. Mr. Aleinikoff thanked Mr. Stayman and Mr. Gisser for coming to Carnegie and explaining the administration view on CNMI immigration policy.

Mr. Stayman began by reviewing how the CNMI came under U.S. control after World War II. Although the CNMI is now a self-governing territory, its status differs from other U.S. territories due to a basic agreement between the CNMI and the federal government, the Covenant, that went into full effect in 1986. Among other provisions, and specifically in response to CNMI fears that the islands would be overrun by Asian immigrants, the Covenent grants the CNMI local government control over immigration as well as minimum wage policies.

According to Mr. Stayman, CNMI immigration and minimum wage policies in conjunction with U.S. tariff and quota laws that protect the islands' products have resulted in the CNMI becoming a haven for cheap garment labor. Despite a 14.2% unemployment rate and a 35% poverty rate for local citizens in 1995, the CNMI's population counts approximately 37,000 temporary alien workers (7,000-10,000 of them illegal) who work for the lightly enforced minimum wage of $3.05 per hour. The approximately 30,500 U.S. citizens tend to work for the over staffed local government.

In addition to the high U.S. citizen unemployment and poverty rates, there are secondary consequences to current CNMI immigration policies. Evidence suggests the existence of shadow contracts, especially among the large proportion of guest workers from mainland China, and patterns of illegal recruitment and fraud. For example, future CNMI workers are enticed to pay thousands of dollars to middlemen to obtain jobs in Saipan which may or may not be available. Guest workers are thus left in virtual indentured servitude until they can pay off their exorbitant debts. Some of the shadow contracts, moreover, stipulate that female workers must undergo abortions if they become pregnant. Mr. Stayman also accused the CNMI government of neglecting to investigate accusations of sexual harassment and forced prostitution and failing to crack down on businesses that employ illegals and do not pay wages.

Mr. Gisser agreed with Mr. Stayman on the necessity of extending federal immigration and wage rules to the CNMI. The structure of the current system, Mr. Gisser argued, encourages the exploitation of vulnerable temporary workers. For example, the CNMI immigration structure allows the entry of temporary guest workers to fill permanent positions, a system that does not exist in the United States. Once they are on the job, temporary workers can change employers only by leaving the island or filing labor complaints, the latter of which the CNMI government adjudicates at a very slow rate. Without proper work-site enforcement, something the CNMI government has not demonstrated, temporary workers are at the mercy of their employers. Currently, one can become a U.S.citizen or legal permanent resident in the CNMI only through birth on the island or close relationship to a U.S. citizen. This situation leads to a disenfranchisement of the temporary workers. Mr. Gisser suggested that in addition to falling under federal immigration and wage rules, the CNMI should move away from a low-skill, labor-intensive, and garment-based economy toward a service-based economy such as financial services or telemarketing.

Mr. Aleinikoff interjected to point out that opponents of the administration proposal claim it will hamper the "economic miracle" of the CNMI. If the minimum wage increases, for example, garment factories will no longer be able to attract workers, and the industry will lose its competitiveness. Mr. Stayman responded to these objections by noting that the U.S. textile and garment industries are in decline. Furthermore, the WTO will eliminate the favorable quotas from which the CNMI has been benefiting by 2005, at which time the textile and garment industries will largely disappear. Even if there were a labor shortage when the CNMI functions fell under federal immigration rules, H-1B provisions would be available to meet any such need.

To contact the panelists:

Alex Gisser
INS Associate General Counsel
Office of the General Counsel
Immigration & Naturalization Service
Room 6100
425 I Street, NW
Washington, DC 20536
Telephone: 202-616-7977
FAX: 202-514-0455

Allen Stayman
Director, Office of Insular Affairs
Department of the Interior
Room 4328
1849 C Street, NW
Washington, DC 20240
Telephone: 202-208-4736
FAX: 202-208-3390