The Guam Chamber of Commerce has expressed concerns about a bill that would tie the island’s minimum wage to the Consumer Price Index, saying it introduces “a unique and unprecedented framework for Guam.”
Bill 4-38, introduced by Sen. Joe San Agustin, would implement a mandatory adjustment in the minimum wage each year to keep up with inflation.
“Having an annual adjustment ensures that minimum wage keeps pace with the economic realities and allows workers to maintain a basic standard of living,” the bill states.
California, Washington, Massachusetts and Oregon link their minimum wages to the Consumer Price Index.
Guam’s minimum wage was raised to $9.25 an hour on Sept. 1, 2021. For a full-time employee, that’s $19,240 a year before taxes.
The bill states that the “disparity between wages and the cost of living creates economic hardship for middle to low-wage workers, hindering their ability to meet basic needs such as housing, food, and healthcare.”
The Chamber of Commerce issued a statement Tuesday saying that “wages should be determined by economic conditions and competition within the labor market, rather than by automatic government mandates.”
The statements said the legislation has “no statutory safeguards, exemptions or economic pause mechanisms.”
Automatic increases could have a potential impact on small businesses, the tourism sector and Guam’s broader economic competitiveness. Employers would not be able to provide input before the increases occur, the statement said.
San Agustin said the bill, introduced in January, has been referred to committee, but no further action has been taken.
Last week, he called for discussion and action on the bill.
At the same time, the Chamber of Commerce said it is reaching out to members “to gather feedback and assess the full range of perspectives within the business community. This consultation process will guide our organization in forming an informed and representative position on Bill No. 4-38 and in shaping any advocacy efforts moving forward.”
