The governor is prepared to sign a bill to lift the minimum wage to $9.25 per hour – in two 50-cent increments over two years – from the current $8.25 per hour.
“Let's give the 11,000 people on Guam who would benefit from a minimum wage increase a raise. While some members of our community have always – and will always – oppose minimum wage increases, the verdict is in,” Gov. Lou Leon Guerrero said. “A Guam-based study measuring the impacts of the last minimum wage increase found that our (gross domestic product) went up, that the rate of inflation in the price of goods stayed generally flat, that work hours weren't lost, and that most people stayed on the job.” The U.S. Bureau of Economic Analysis reported last year that Guam's GDP increased 0.2% in 2017 after increasing 0.3% in 2016. For comparison, real GDP for the United States increased 2.2% in 2017 after increasing 1.6% in 2016.
Adelup spokeswoman Janela Carrera said the 11,000 people include private- and public-sector employees.
Bill 136-35 doesn’t address compression, which revolves around the wages of those who earn $9.25 an hour and above. This was a concern raised by the business sector and by government of Guam employees during the last minimum wage increase.
During the public hearings earlier this year, the Guam Chamber of Commerce noted that many in the private sector start at levels beyond the minimum wage, but even those who start at the minimum wage are able to work their way to wage increases in the same position or move on to higher-paying positions. There were also concerns about whether small businesses could absorb the cost of an increased minimum wage.
"We maintain our stance that a minimum wage is a starting wage and that it should be determined by market conditions," Catherine Castro, Guam Chamber of Commerce president reiterated Monday.
In her monthly address, the governor also touched on the minimum wage, service charges for those in the service industry, worker compensation benefits, and extending the apprenticeship program.
A 2017 economic study showed that 33% of employers surveyed had reduced or planned to reduce the number of scheduled hours or employees as a result of the most recent wage in increase in 2015; 65% said they weren't reducing hours. Additionally, 20% of respondents said they had or planned to reduce the number of employees.
The same study also noted: "In the qualitative interviews, consistent with the survey, almost a third of businesses said they have increased prices of goods or services to keep up with wage increases. As one respondent described, 'We have to include the increase in the minimum wage so whatever we expend on minimum wage... the impact of the minimum wage 2015 until now we were able to include that and bill that to our clients.'"
Ready for session
Just last week, Sen. Regine Lee sent a press release saying the bill, which was introduced earlier this year, has been sent out of her committee and is ready to be discussed in legislative session.
The senator's announcement followed the Legislature's approval and the governor's signing of a nearly $1 billion budget bill for fiscal year 2020. During budget discussions, a majority of senators voted against amendments by Sen. James Moylan to roll the business privilege tax from 5% to 4% in an effort to reduce government cost.
There is one other legislation, Bill 142-35, introduced by Sen. Wil Castro, which would return the Business Privilege Tax to 4% while also increasing the minimum wage. There has been no public hearing on that bill.
Service charges and apprenticeship programs
The governor wants the service charge customers pay as part of their tab at local restaurants to go to “the people who actually serve.”
Additionally, the governor said she would support Lee’s effort to increase Workers' Compensation Benefits for workers who are injured or lose their lives on the job. “I will sign it. Any senator who stands for the rights of working people will find me standing with them.”
Another bill of Lee’s that the governor supports relates to extend the apprenticeship program. The apprenticeship program started in the Camacho administration and is expected to expire soon.
“For years, the Guam Apprenticeship Program has partnered with the private sector to teach skilled trades and get hundreds of people employed. Now, that program is set to expire in just four months, Sen. Regine Biscoe Lee has proposed a bill to streamline and extend the life of this program,” the governor said. “Place it on my desk and I will sign it.”
This is Gov. Lou Leon Guerrero's entire address:
Every day, the People of Guam prove that in times of great challenge or significant opportunity, we are home to the most resilient, creative, and hardworking people in the world.
Generations of working people built the island we love. Every day, in ways big and small, working people repair our roads, clean our hotel rooms, serve our tables, and build the homes, schools, and bridges that keep our island moving.
Recently, Guam joined the nation in celebrating Labor Day--a holiday that was established by the efforts of organized labor to honor all workers --union and non-union alike. They are the reason we have the minimum wage, weekends away from work to rest and spend time with family, and basic protections in our workplaces. We are the inheritors of their progress and we have a moral responsibility to advance the cause of working people.
We need to help our people with policies based on democratic principles that support working people like raising the minimum wage. Let's give the 11,000 people on Guam who would benefit from a minimum wage increase a raise. While some members of our community have always--and will always oppose minimum wage increases, the verdict is in. A Guam-based study measuring the impacts of the last minimum wage increase found that our GDP went up, that the rate of inflation in the price of goods stayed generally flat, that work hours weren't lost, and that most people stayed on the job.
I am proud to know that Senator Joe San Agustin's proposal to raise the minimum wage has wide support among Democrats. And because people struggling on the minimum wage belong to both parties, I know our Republican Senators will follow suit.
A large portion of the island's working class comes from the hospitality industry, particularly in food and beverage, and, as minimum wage earners, they can barely afford to pay their bills. They often don't have any health insurance coverage and are sometimes forced to work multiple jobs just to afford rent or feed their children. For food establishments that assess a service charge, we should make sure all of it goes to the people who actually serve.
But raising the minimum wage and directing 100 percent of service charges to the employees is not enough.
We must give everyone willing to work the chance to learn a skilled trade in telecommunications, mechanics, construction, welding, and other trades we need. No one who works a full-time job should live in poverty. And a career in the skilled trades is a proven path to great paying jobs. Many successful tradesmen and women go on to start thriving small businesses of their own.
For years, the Guam Apprenticeship Program has partnered with the private sector to teach skilled trades and get hundreds of people employed. Now, that program is set to expire in just four months. Senator Regine Biscoe Lee has proposed a bill to streamline and extend the life of this program.
Place it on my desk and I will sign it.
Supporting workers also means standing by them if they are injured on the job. Days after a holiday that celebrates workers, we should recommit ourselves to workers compensation laws that truly protect working people. For decades, hardworking people injured on the job have had to accept that the benefits they receive have not kept pace with what it costs to live on Guam.
We can and must do better. Send me a bill that brings Worker Compensation Benefits into the 21st century. I will sign it. Any senator who stands for the rights of working people will find me standing with them.
What President Roosevelt said in 1938 about establishing a minimum wage is also true about raising it: Without question it starts us toward a better standard of living and increases purchasing power to buy the products of farm and factory.
For me, the test of a successful community is providing opportunity for those who want to work and taking care of those who are most vulnerable.
Let's raise the minimum wage. Let's keep the Guam Apprenticeship program working for a new generation of skilled labor. Let's write and pass a worker's compensation law fit for the 21st century; and let's give the service charge to those who actually serve.
Have a wonderful month and God Bless Guam!