The national labor force was estimated at about 23,190 in 1994. Two-thirds of the labor force in 2002 were government employees. In 1999 the unemployment rate stood at 16%. While unemployment remains high, the economy faces shortages of skilled personnel since over 44% of the population is under 16 years of age.
The law provides the right to form or join unions, and government employees are granted the right to form associations to proffer their views. However, no such associations have been formed as of 2002. The country is not affiliated with the International Labour Organization (ILO).
While labor laws are applied mostly without variance in all four states, the minimum wage varies from state to state. Minimums for government-employed workers in 2002 ranged from $0.80 per hour for Yap to $2.00 per hour in Pohnpei. Only Pohnpei had a minimum wage for private sector workers. In 1999, it stood at $1.35 an hour. There is no minimum working age for children and many children assist their families in subsistence farming activities.