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UOG economics professor talks impact of minimum wage

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The University of Guam is weighing in on the minimum wage increase debate. UOG will host a seminar next week on the impact of the proposed hike in Guam.

Economics professor Dr. Roseann Jones will be the featured speaker at the seminar. She is also one of the main authors of an economic impact statement that was required by law during the last minimum wage increase. They studied the potential effects of the last $1 hike.

"We wanted to see how many workers on Guam were already falling below or at the $8.25, which was the projected minimum wage increase. And when we looked at the workers on Guam who were following below or at that $8.25 range we only found about 6,000 potential workers or 10 percent of the workforce. And we said that's not going to have a huge impact."

She says most of the lowest paid workers are in the service industries, hotels and restaurants, and many more work multiple jobs just to make ends meet. But Jones says contrary to common perception, companies do tend to look out for their workers, which they discovered in their many one-on-one interviews.

"I was impressed to hear from our employers of minimum wage workers when it really got down to it, some of them, I feel for my workers," she said. "I don't know how they do this. I know how expensive it is to live here, and we do the very best we can to help them."

There is also the common perception of what businesses typically do in response to a forced increase in wages: cut employees and raise prices.

"And so we asked both of those questions, and the answer to both of them was 'no,' we didn't lay off workers and we didn't cut their hours," she said. "And so then we asked, did you raise prices? And then they said, no, we didn't raise prices. We couldn't raise prices. You couldn't raise prices? For our type of product, we'll have too much competition."

So what did businesses do, Jones asked.

"It drove us to create and expand our business in new lines of business activity," she said. "So I smiled at that, who would've thought that in a sense, the increase in the minimum wage spurred business development."

Jones also compares Guam's wages to the mainland, and talks about what she says is often overlooked in wage debates.

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