The Pacific Daily News reports that prices for goods in Guam have risen by 10% to 73%, depending on the specific good. The year over year change in consumer prices is at a 10-year high of 7.9%, according to Guam’s Consumer Price Index report by the Bureau of Statistics and Plans.
Deputy Director Matthew Santos states, “Although this is not ideal, we are not in a unique position, with the United States and the rest of the world seeing a similar or greater rate of inflation.” The PDN links the recent high rate of inflation with pandemic supply change disruptions, the war in Ukraine, and a few other causes.
During this past year, the minimum wage was not increased by the Guam Legislature. In fact, adjusted for inflation, the Guam minimum wage peaked in 2018, when it was raised from the federal minimum wage of $7.25 to $8.25 per hour. Over 6 years later, the Guam Legislature allowed the minimum wage to rise to $9.25.
The question of the effect of raising the minimum wage has been studied thoroughly. In the United States, raising the minimum wage by 10% is linked with an increase of only 0.4% in the cost of living. Thus, with the proposed 20% total increase in the minimum advocated by this website and the Progressive Democrats of Guam, one would expect a minor additional increase to the minimum wage.
There has been reporting elsewhere that CEOs of major corporations in the United States have touted recent general price rises as an excuse for firm to raise their own prices, increasing the profitability of their firms, during investor calls. As a result, Congresswoman Katie Porter this fall shared results of a study indicating that over half recent price rises is explained by an increase in profits in the business sector.
Such profiteering happens at the expense of ordinary workers. Workers on Guam have seen their pay stagnate for years, while consumer prices erode any modest gains they have made in higher wages. Over the last 3 decades on Guam, tax cuts have been lavished on landowners, corporations, and highest income earners by the real property tax cut and three large federal tax cuts targeting corporations and the rich.
The Government of Guam, financially stressed by its need to provide for the people, had resorted to borrowing from the wealthy directly in the form of debt and tax credits instead of taxing the rich, placing an increased burden on middle income families and cuts to spending. It is time to go in a different direction. A first step will be to increase the incomes of working class families by raising the minimum wage to $11.10 per hour.
GuamMinimumWage.org 