New Year, new minimum wage for Guam

by Sabrina Salas Matanane

Guam - The New Year brings new minimum wage for Guam workers. "I think we as a community have a responsibility to see to it that this minimum wage which hasn't gone up in ten years is increased so that all boats rise at the same time and we don't leave anybody behind," stated vice speaker of the 32nd Guam Legislature, BJ Cruz.

And today the island's minimum wage increases by one dollar to $8.25. Cruz introduced the bill to raise the minimum wage earlier this year. It was signed into law in July. The legislation initially proposed raising the minimum wage three times in the next three years capping off at $10.10. The $1 hike was a compromise after receiving opposition from the island's business community such as the Guam Hotel and Restaurant Association and the Guam Chamber of Commerce.

Chamber president Dave Leddy said, "Well, you know, we've received concerns about this in terms of the minimum wage increase all the way back to when the bill was first introduced. And if you recall, many of our businesses especially small businesses, mom and pops, came out to oppose this and they provided real world economics, not economic theory." The real world economics, according to Leddy, was that the increased labor costs would impact their business tremendously. Despite the one-dollar compromise, Leddy says many small businesses are already feeling the pinch and the additional costs he says will be felt community-wide.

"We're already seeing it now, we see increased prices at our supermarkets, we're seeing increased prices in real estate, and so that's what happens whenever you have a federally mandated or artificial wage increase that's not based on the economy, not based on the marketplace there's a cost," he shared.

Cruz however says the minimum wage increase is to help island residents make ends meet, a prime example he says those who work in the tourism industry. "We saw that the mean room rate went from $88 to $140 but the average increase for the employees at the hotels went up $0.28 - not 28%, $0.28 in those five six years - and so if we're all going to make money then let's all make money together," he said.

Leddy says the Chamber is in support of people getting higher wages and moving up the career ladder but it has to be based on the marketplace. He said, "It has to be based on the economy. Why? Because when you base a wage increase on the growth of the economy then there is no cost to anybody everybody benefits, both the private sector and the government but when you legislate a wage increase, artificially raise the minimum wage then there's a cost it's not a free lunch, we're going to pay for it one way or another the economy needs to be the driver for wages, that way everybody benefits."

Just recently Governor Eddie Calvo signed a bill into law which would mandate an independent study to be conducted on the minimum wage hike. The findings would be used to justify future efforts to raise the minimum wage.

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