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HAGATNA, Guam (Pacific Daily News, Sept. 16) – About 10,000 workers on Guam are likely to benefit directly if Democrats in the Guam Legislature succeed in pushing for a two-tiered increase in the minimum wage, according to local Department of Labor statistics presented at a legislative public hearing yesterday.

Sen. Benjamin Cruz has led a Democratic push for an increase in Guam’s minimum wage, to US$5.75 per hour from the current US$5.15 an hour.

Under the proposal, which would go into effect in January 2006, a second increase to US$6.25 an hour would take effect in January 2007.

[PIR editor’s note: The National minimum wage in the Unites States is $5.15 per hour but many states maintain higher minimums. In Hawaii, the minimum wage is currently set at $6.25 per hour.]

Democrats are pushing for the increase to help consumers cope with skyrocketing gasoline prices and increases in the cost of health insurance and power and water rates.

But Gary Hiles, chief economist with the local Labor Department, said if the amount of money generated by the local economy doesn't increase and the minimum wage does, money would simply shift from one group to another.

An employer forced to raise the minimum wage might cut the number of jobs on his payroll or reduce employee benefits, such as health care, Hiles said, expressing his personal view when pressed for answers by lawmakers.

And in some industries, particularly in retail, consumers will see higher prices as stores try to recoup the extra money to pay for higher minimum wage, Hiles said.

Hiles gave his personal opinion because the local Labor Department has not taken -- and isn't expected to -- a stand for or against raising the minimum wage.

But if the minimum wage does increase, the Labor Department will make sure to enforce the law, said Labor Director Maria Connelley.

Sen. Cruz said the Labor Department's acknowledgment that as many as 14,000, or about one in four of Guam's private-sector workers, make between minimum wage and $7.09 - and that only about 2,000 of them are teens -- bolsters his argument that the increase helps more low-income families and their children rather than teen workers.

"There are about 10,000 people -- with families and children," he said of those adults making just a little above $7 an hour or less.

And while local and federal government workers make more than minimum wage for the most part, Cruz said, "it is imperative to take care of (private sector) people who have to take two or three jobs trying to make ends meet."

Of the 55,800 jobs on Guam, the median hourly rate is $10.56, according to a Labor Department estimate.

But the private sector, particularly the service industry, such as hotels, is where people making at or near minimum wage are concentrated, according to the Labor Department numbers.

The Guam Chamber of Commerce has submitted a written position that now is not the time for the economy to add a minimum wage increase because businesses continue to struggle.

The Committee on Aviation, Immigration, Labor and Housing, under Chairman Sen. Jesse Lujan, has scheduled another public hearing on the minimum wage issue on Oct. 15.

September 16, 2005

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