The unemployment rate in Federated States of Micronesia was estimated at 27 percent in 1989, but had fallen to 16 percent by 1999. These figures are high, the degree of under-utilization of the labor force is somewhat greater than even these figures suggest. For much of the year in small-scale family farming there is relatively little work to do, and this is shared among the family members. During planting and harvesting, there is more work to be done, and everyone is more fully occupied. Everyone sharing the work appears to have an occupation in agriculture, but many workers are not engaged full time for all the year, and hence there is some "disguised unemployment."
The government respects the human rights of its citizens. There is no law dealing specifically with trade unions or with the right to collective bargaining. Individual employers, the largest of which are the national and state governments, set wages.
Neither the constitution nor the law specifically prohibits forced and bonded labor by children, but such practices are not known to occur. There is no law establishing a minimum age for employment of children. While in practice there is no employment of children for wages, they often assist their families in subsistence farming activities.
The 4 state governments have established minimum wage rates for government workers. Pohnpei has a minimum hourly wage rate of $2.00 an hour for government and $1.35 an hour for private workers. The other 3 states have established minimum hourly rates only for government workers of $1.25 for Chuuk, $1.49 for Kosrae, and $0.80 for Yap. The minimum hourly wage for employment with the national government is $1.68. These minimum wage structures and the wages customarily paid to skilled workers are sufficient to provide an adequate standard of living under local conditions.
There are no laws regulating hours of work (although a 40-hour workweek is standard practice) or prescribing standards of occupational safety and health. A federal regulation requires that employers provide a safe work-place. The Department of Health has no enforcement capability and working conditions vary in practice. Foreign laborers are paid at a lower rate than citizens, work longer hours per day, and work a 6-day week in contrast to the 5-day week for citizens.