GUAM REPORTS INCREASED EMPLOYMENT, WAGES

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Out of tourism slump but long way to go

By Oyaol Ngirairikl HAGATNA, Guam (Pacific Daily News, Dec. 15, 2010) – An increase in the number of jobs and in the average wages points to economic recovery for Guam, though a local economist said there's still a long way to go.

"Guam has recovered from the tourism slump in mid-2009, and we are seeing other numbers increase, but we're a long way from the peaks in hotel occupancy and in job numbers, said Gary Hiles, chief economist with Guam Department of Labor. But overall, the direction is positive."

The Guam Labor Department released a report yesterday that noted a jump in job numbers by more than 2,000 this September compared to the same time last year according to the preliminary statistics.

Hiles said the increase in jobs and average wages points to an increase in tax revenues.

While there's growth in overall employment, the government of Guam is having trouble paying employees, vendors, utilities and other obligations.

"This report is a positive indicator, said Guam Public Auditor Doris Flores Brooks. But right now, we're outspending our revenue."

Brooks and other government officials have said unbudgeted items, such as tax refund interest and federally mandated payments to the Department of Mental Health and Substance Abuse are eating away at GovGuam's revenues even as departments struggle to pay employees.

Brooks said GovGuam needs to determine how much money it's getting each month and match that to monthly spending needs, in addition to ensuring that all of GovGuam's known expenditures are budgeted.

Brooks said expenses such as the US$2 million payments to Mental Health weren't expected, so they could not be included in the budget. "But for a lot of these other expenses that we did know about, it should be budgeted, otherwise we're spending money we don't have."

The growth points to "expansion and continuing recovery" from previous years, according to the report.

"While September employment in both private and public sectors increased seasonally from June, despite a dip in construction, it is well above the comparable September period a year ago, the report states. Increased construction and employment related to increased visitor arrivals contributed to the year's increase."

The private sector is leading the job growth with 1,570 jobs, led by an increase in the services and construction industries, with 900 and 560 jobs added, respectively. Also, government jobs increased this year: the federal government showed an increase of 120 jobs while government of Guam showed an increase of 390 jobs.

"Federally funded temporary jobs for the American Recovery and Reinvestment Act project positions boosted the government of Guam job count," the report stated.

In addition to the number of jobs increasing, the pay for many jobs has also increased by 18 cents per hour, from US$12.15 in September 2009 to US$12.33 in September 2010. Over the same time period, average weekly hours paid increased from 35.6 to 36.5 and average weekly earnings increased correspondingly from US$432.52 to US$450.51 or by 4.2 percent.

Hiles said Guam's tourism industry is one of the leading economic factors in the road to recovering from recession.

"Primarily, the increase is in the Japan markets, but we also saw rebounds in the Korean and Taiwan markets that have helped us out of the tourism slump we saw last year," he said.

According to Guam Visitors Bureau officials, tourism numbers are up 3 percent from last year.

Hiles said in terms of job numbers, Guam is still "nowhere near" peaks in the 1990s.

"At that point there were approximately 12,000 people in construction. So we're nowhere near that, he said. But looking ahead, even those peak numbers in the 1990s shrink in comparison to what's expected in the buildup. While September employment in both private and public sectors increased seasonally from June, despite a dip in construction, it is well above the comparable September period a year ago, the report states. Increased construction and employment related to increased visitor arrivals contributed to the year's increase."

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