Democrats back bill to raise minimum wage - KUAM.com-KUAM News: On Air. Online. On Demand.

Democrats back bill to raise minimum wage

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Let the public debate begin over another increase in the minimum wage. All 10 democratic senators are sponsors of a bill to phase in a $1 hike over the next two years. Main sponsor Sen. Joe San Agustin calls it," a small step that could make a difference in the lives of many." But the Chamber of Commerce says it will also have a negative impact on many small businesses.

The measure proposes a $0.50 increase to $8.75 by March of next year, and another $0.50 to $9.25 by March 2021.  Sen. San Agustin says he chose to phase in the hike based on input from a human resource managers group. But he's also convinced that companies who are benefiting from a 14-point federal tax cut can afford to pay employees more.

"So the businesses right now are in the greatest position right now," the senator said. "An increase in the minimum wage is actually the way to go. You know we got to start paying things forward."

But the business community points out that because of a resulting hit to government revenues, the legislature raised the business privilege tax from 4% to 5%. Guam Chamber of Commerce chairman Joe Arnett, in a previous interview, said the wage hike will also lead to higher consumer prices as businesses pass on the increased costs.

"I can think of many small businesses off the top of my head that are really going to be seriously injured by this," Arnett said. "I think the answer is not an artificial increase in wages, but training of the workforce so that they can earn more in a skilled position."

San Agustin disagrees with the Chamber chairman's idea.  

"For me that's an excuse," he said. "OK, why don't we send everybody that comes out of high school, we send them to all the schools, they go to University of Guam, they go to GCC, when they come out what do they get, do they in fact really get the higher wages, or do they start at the minimum wage? I want to keep business in business because of the economy, but I can't just sit back and allow businesses to keep making money and not sharing it with everybody else."

A public hearing must still be held on the bill, but with nine co-sponsors, San Agustin appears to have a veto-proof majority.

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