Commonwealth of the Northern Mariana Islands: Agencies Should Assess Risk of Ending Foreign Worker Program

What GAO Found

Over the past 2 decades, the Commonwealth of the Northern Mariana Islands (CNMI) has experienced significant challenges, including the COVID-19 pandemic, natural disasters, and the loss of its manufacturing sector. These challenges, along with a diminishing workforce, have contributed to its weak economic position.

The CNMI-Only Transitional Worker (CW-1) program is a temporary foreign worker permit program CNMI uses to employ foreign workers. GAO determined that these foreign workers in the CNMI remain a major segment of the territory’s employed workers, accounting for approximately one out of three workers on average from 2020 through 2024 (see figure).

Share of U.S., Foreign, and Unknown Workers in the Commonwealth of the Northern Mariana Islands (CNMI), Calendar Years 2020–2024

Note: We categorized workers whom we could not identify as U.S. or foreign on the basis of CNMI tax data as “unknown.” Our categorization of these workers is based solely on CNMI tax data and is not a determination based on records underlying the data of whether any individual meets the definition of U.S. worker under the Northern Mariana Islands U.S. Workforce Act of 2018. Percentages shown for 2020, 2022, and 2024 do not sum to 100 because of rounding.

Foreign workers are especially important to the territory’s primary industry, tourism, which has struggled to rebound following a 2018 typhoon and the COVID-19 pandemic. According to CNMI officials and business leaders, the CNMI does not have enough U.S. workers to fill current job openings and will continue to require foreign workers as its economy recovers.

The CW-1 program is set to expire on December 31, 2029. Officials from the CNMI government, business community, and educational institutions expressed concerns that the end of this program will have severe adverse effects on the economy. However, the extent of these potential effects is unknown.

The Department of the Interior (Interior) has been delegated administrative supervision for for managing the U.S. government’s relations with the CNMI, including coordination with other federal agencies, such as the Departments of Homeland Security and Labor. Interior has also previously conducted or contributed to studies assessing different aspects of the CNMI workforce and economy.

However, Interior has not conducted a study to assess potential risks to the CNMI workforce and economy associated with the end of the CW-1 program. Interior officials said they have limited resources to conduct such an assessment but agreed it would be beneficial to decision-makers.

Congress previously stated its intent to minimize potential adverse economic and fiscal effects of phasing out the CW-1 program. Maintaining economic stability in the CNMI is vital to U.S. interests in the Pacific region. Without assessing the potential risks of ending the CW-1 program and identifying ways to mitigate them, the CNMI, Interior, and Congress will not have the information needed to make decisions regarding how to support the CNMI economy when the CW-1 program ends after December 31, 2029.

Why GAO Did This Study

The CNMI is a U.S. territory that consists of 14 islands in the western Pacific Ocean, just north of Guam and about 3,200 miles west of Hawaii. Its location in the Pacific provides the U.S. with military deployment flexibility and the ability to monitor expanding Chinese influence in the region.

Under the Consolidated Natural Resources Act of 2008, the Department of Homeland Security established the CW-1 program to provide for an orderly transition from the CNMI immigration system to the U.S. federal immigration system during a transition period. The Northern Mariana Islands U.S. Workforce Act of 2018 (the act) extended the CW-1 program through December 31, 2029. The act sought, in part, to increase the percentage of U.S. workers in the total CNMI workforce while maintaining the minimum number of workers who are not U.S. workers to meet the changing demands of CNMI's economy. The act calls for various reports on the CNMI's progress toward this goal, including an annual report by the Governor of the CNMI identifying the ratio of U.S. workers to foreign workers in the workforce.

The act also includes a provision for GAO to report every 2 years on the ratio of foreign workers to U.S. workers in the CNMI workforce for the previous 5 calendar years.

GAO analyzed CNMI government and U.S. agency data and reports; reviewed prior GAO reports; observed economic conditions in the territory; and interviewed officials from the CNMI government, business leaders and education professionals in the CNMI, and officials from the Departments of Homeland Security, the Interior, and Labor.