admin's picture

U.S. Department of the Interior
Washington, D.C.

NEWS RELEASE December 14, 1998


The U.S. Social Security Administration pumps about $42 million into the economy of Guam every year, according to the Director of the Office of Insular Affairs, Allen P. Stayman.

Stayman, a U.S. Department of the Interior official who recently flew to Guam to meet with Governor Carl Gutierrez, reviewed recent data provided to his office by the Social Security Administration.

"Social security payments are among the larger streams of federal funds coming to Guam," Stayman said, "and as a steady flow of checks to older and disabled workers and their spouses and survivors it plays a major and predictable role in the economy of Guam."

According to Stayman, the total annual social security benefits came to about $42 million in the 12 months ended December 1997. These checks were distributed among 8,041 Guam residents, including 5,218 retired workers and their dependents, 1,969 survivors of deceased workers (i.e. mostly widows and widowers), and 854 disabled workers and their dependents, as of December, 1997.

The average monthly checks for the retired workers came to $514, while the monthly benefits for the disabled workers were $608, and for widows and widowers $487 in 1995, and currently are about 10 percent higher than those numbers.

"The social security benefits are adjusted upwards every year to factor in inflation, which is helpful to the individuals involved; further, because of this, and because of an increasing number of people receiving the benefits in Guam, the total amount coming into the territory's economy increases each year," according to Stayman. He said that the 1997 total, $42 million, can be compared with the flow of benefits four years earlier when the year's total was about $28 million.

"Clearly Guam, like the rest of the U.S., has a strong interest in President Clinton's current efforts to make sure the Social Security system remains strong and well-funded in the decades ahead," he continued.

Social Security benefits are funded by taxes on workers and employers; the current rate is 7.65 percent (by the workers and the same amount by the employer) on the first $68,400 of a worker's earnings.

"One troublesome element of island economies is the temptation to work and to hire people 'off the books'," Stayman said. "This is an extremely short-sighted approach, as it reduces or eliminates a worker's pension when he or she becomes too old, or too disabled to work."

He said such avoidance of the social security tax (FICA) in the past may account, in part for the fact that the ratio of social security beneficiaries to the total population in Guam is less than in the nation as a whole, about five percent in Guam, as opposed to about 16 percent in the U.S. as a whole. Another very significant variable, he said, is the relative youth of the Guam population.

"The bottom line in Guam, as elsewhere, is: don't take a job in the underground labor market, you are cheating yourself, and more broadly, you are cheating the community where you live," Stayman concluded.

Rate this article: 
No votes yet

Add new comment