Guam Speaker Retintroduces Minimum Wage Increase Bill

Economic Impact Report showed past increase helped boost economy

By Shawn Raymundo

HAGÅTÑA, Guam (Pacific Daily News, Feb. 13, 2017) – Speaker Benjamin Cruz, D-Tumon, on Monday reintroduced his measure to incrementally raise the island’s minimum wage to $10.10 by next year.

The results of the latest Economic Impact Report , released last Friday,  have bolstered Cruz’s plan to increase the minimum wage. Certain aspects of Guam’s economy improved in 2015 after the minimum wage rose from $7.25 to $8.25, the report states.

“While some people will always oppose minimum wage increases for personal, philosophical, or political reasons — the facts are in,” Cruz said in a press release.

According to Market Research and Development’s third-party assessment on how the $1 wage hike impacted the local economy in 2015, Guam’s GDP grew from $5.6 billion in 2014 to $5.7 million 2015, while the inflation rate declined and the workforce grew by 2.2 percent.

Opponents of the wage increase had argued employers could increase prices and cut jobs to compensate for the higher payroll costs.

“A review of the island’s macroeconomic indicators shows Guam to be in an expansionary phase of its business cycle,” the report stated. “Leading indicators of GDP, employment, inflation and others presented here confirm that the minimum wage has not negatively impacted Guam’s economic progress. Employment trends show continued job and wage growth.”

“Whether you agree or not, the independent study sought by our opponents says we can help working families earn a little more, and we can do it without the collapse of our economy ­— just as we have been doing in the near 80-year history of minimum wage in this country,” Cruz added.

The speaker’s measure, Bill 20-34, proposes to increase the minimum wage to $9.20 in October and then to $10.10 a year later. His previous measure passed the Legislature at the end of last term on an 11-3 vote, with Sens. James Espaldon, Dennis Rodriguez Jr. and Mary Torres opposed the bill while former Sen. Brant McCreadie absent from session.

Last month, a week before the impact study was scheduled to be given to the Department of Labor, Gov. Eddie Calvo vetoed the bill, citing the lack of data to ensure Guam’s workers won’t be adversely impacted by the raises.

“Few businesses report reductions in the number of workers, hours, or benefits in the year following the minimum wage increase to $8.25 per hour,” the study reported. “Many businesses interviewed indicated that they had absorbed higher minimum wages with no major disruption to their business activities, nor to the employees who work for them.”

After lawmakers in 2014 passed the bill to increase the minimum wage by a $1 at the start of 2015, they later passed a companion bill, requiring the labor department contract a firm to conduct an economic impact statement.

“The scientific study required by law may be a year late, but its findings are crystal clear,” Cruz said. “The 2015 minimum wage increase did not eradicate jobs, incite massive inflation, or cause widespread disruption to the business community.”

Cruz’s initial wage-hike measure in 2014 proposed three incremental raises. The first would have bumped the minimum wage to $8.20 in 2015, then to $9.15 in 2016 and to $10.10 in 2017. Amid threats of a veto, Cruz amended the bill to only authorize the $1 increase.

“Had my original proposal become law in 2014, minimum wage workers and their families would be making $10.10 an hour right now,” Cruz noted. “They have been patient and continue to keep our economy going doing the jobs many of us couldn’t stand to do.”

Pacific Daily News
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