Business community talks impacts of raising minimum wage - KUAM.com-KUAM News: On Air. Online. On Demand.

Business community talks impacts of raising minimum wage

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by Ken Quintanilla

Guam - The first of three public hearings on legislation to raise the minimum wage kicked off Wednesday night bringing out business leaders and concerned citizens who shared their input well past the midnight hour.

Since it was established less than a year ago, Guam Women's Chamber of Commerce president Lou Leon Guerrero says equal wages and the minimum wage has been a hot topic amongst her board and membership. "Thank you for allowing us to testify on a bill that we consider very, very critical to business and to the economy as a whole and to the livelihood of the community," she stated.

It was earlier this month when the Guam Women's Chamber hosted a forum on wage and compensation featuring key experts on the matter. Vice Speaker BJ Cruz was a guest speaker at that forum where he announced he would be introducing a bill to raise the minimum wage. The Bank of Guam president and former senator was the first to testify during the highly anticipated public hearing on the measure, as Leon Guerrero said, "There has been no judgment in the minimum wage in five years and in that time food prices are up 32%, housing costs are up 24%, power is up 42%, fuel has increased by 26%, the median rent for a 2-bedroom apartment in Guam is $800 per month."

Leon Guerrero, who noted the Bank of Guam also supports raising the minimum wage, says Bill 316 mirrors President Barack Obama's bill proposed during the 2014 State of the Union Address intended to provide employers adequate time to plan the implementation of the stepped up wage. "For Guam it brings us up wages to the $7.89 needed to bring the existing minimum wage to reflect current purchasing power."

And just as he expressed with KUAM News last week, Guam Chamber of Commerce president David Leddy stressed the over 400-member organization representing all sectors of the business community opposes Bill 316. "The Guam Chamber believes every employee should receive higher wages for their labor and efforts but wage increases should be directly related to worker productivity and economic expansion and not through arbitrary increases," he said.

Certified financial planner Carl Peterson says investing and saving money is what he does best but questioned what magic lawmakers had up their sleeves to raise the minimum wage 39.3% without having an impact on the community. He said, "The old saying holds, a bad economist sees a short term euphoria, a good economist sees the long term unintended consequences of that short term decision But if the legislature believes so strongly that this will not impact anyone, let's not mess around, lets raise it 539% so we can really help the little guy."

He says passing such legislation would increase prices, force businesses to cut operating expenses along with cutting profits. He adds if lawmakers can pull off this trick, he hopes they can sprinkle their magic on the rising costs of power, water and trash bills.

Guam Hotel and Restaurant Association president Mary Rhodes meanwhile says magic rather raising the minimum wage won't solve the problem. "I think we are truly oversimplifying a very difficult and complex problem - this is not a silver bullet," she said.

She says despite the intent of the legislation to lift low-income wage earners out of poverty, raising the minimum wage will increase prices thus have a rippling effect on consumer goods and services. She says increasing the minimum wage will essentially change the market conditions for companies and cause changes in its structure affecting hard-working people in the workforce. "There are a lot of issues at hand and for the reasons why, there's a difference between skilled and unskilled workers and minimum wage a lot of the time goes to unskilled workers and that's how they enter in so they can get skills and once you start introducing or lowering that gap and get that compression you're going to start impacting those who are skilled workers," she said.

She says just as the minimum wage is being discussed across the nation, a lot of it is still premature and requires an independent economic impact study.

Small business owner and Attorney Vanessa Williams says she wasn't always in support of raising the minimum wage, saying, "I've been working since I was 14 almost nonstop, several minimum wage jobs, and as a business owner, I became even more skeptical of disturbing the status quo."

Williams says her change of heart came as a result of not rhetoric but research some of which included information shared by economists and professors at the Guam Women's Chamber forum which she is also a member. "In my research, I found the facts support and history proves that raising the minimum wage is the right thing to do for our island's economy," she said.

She adds while the status quo shows that cost of goods and services are increasing, the cost of living is outpacing the real wages and poverty and crime rises, raising the minimum is worth considering. Two more public hearings are set for April 30 at 2pm and 5:30pm. 
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