Reports Show Poverty Up, Private Sector Employment Down In Marshall Islands

More than half the population live below poverty line

By Giff Johnson 

MAJURO, Marshall Islands (Marianas Variety, Sept. 26, 2016) – Two new reports on the Marshall Islands suggest why out-migration to the United States continues at a steady pace, with communities of Marshall Islanders growing as many as 10 U.S. states.

While employment levels in the Marshall Islands government have grown, jobs in the private sector declined dramatically in fiscal year 2015, according to the Marshall Islands Fiscal Year 2015 Preliminary Economic Review issued earlier this month by the Graduate School USA. Employment figures for the Marshall Islands show that private sector jobs peaked at nearly 5,000 in FY 2010 and steadily dropped to about 4,200 by FY 2015.

A second report, issued last week by the Asian Development Bank, says the Marshall Islands has the highest poverty rate in the Pacific islands.

The main drivers of the job losses are at the Pan Pacific Foods tuna loining plant that in 2010 average over 400 workers a day, said the Graduate School USA annual economic review of the Marshall Islands. “However, the supply of labor (at the tuna plant) contracted in FY 2011-FY 2015 and the daily average had fallen to 168 by FY 2015,” the report said. “The labor shortages at the plant and falling construction demand led to a reduction in private sector employment in FY2011, and these trends have continued since then through the subsequent four years.”

Last year was a particularly bad year for business sector employment, as the number of jobs “dropped by a large 6.9 percent,” most of this from the fisheries sector, the report said.

From the start of the second financial aid package in the Compact of Free Association in 2004, 929 new jobs in government were added, while private sector job numbers increased by only 215. This translates to just 19 new jobs annually in the private sector in the 11 years since the second Compact started.

This demonstrates the reliance of this country’s economy on the public sector for job creation. But private sector gains in this period, modest though they may be, were “offset by the reduction in operations and demand for employment at the Kwajalein base by 534 jobs (cut by the U.S. Army),” the report said.

Over half the Marshall Islands population lives below the national poverty line, said ADB. This is the highest poverty rate in the Pacific, according to ADB, which said the island country facing the next worse incidence of poverty is Timor-Leste. The Federated States of Micronesia’s and Fiji’s poverty rate are pegged at 31 percent, while other island countries are in the 20-30 percent range: Cook Islands and Papua New Guinea (28), Samoa (27), Tuvalu (26), Nauru and Palau (25), Solomon Islands and Tonga (23) and Kiribati (22).

ADB said that 60 percent of the Marshall Islands population aged 15 years and above is unemployed.

An estimated 10,000 Marshall Islanders live in Northwest Arkansas, working in numerous poultry packing and other factories in the area. There are other significant size communities of Marshall Islanders in Oklahoma, Missouri, California, Oregon and Washington.

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