Guam Chamber of Commerce: Wage policy should be driven by market conditions

By Pacific Island Times News Staff

Wage rates should be determined by economic conditions and competition within the labor market instead of being imposed by government mandates, the Guam Chamber of Commerce said.

“This position is rooted in long-standing free-market economic principles that guide our advocacy efforts on behalf of businesses of all sizes,” the chamber said.

Joe San Agustin

The business group issued the statement in response to Sen. Joe San Agustin’s Bill 4-38, which would establish a wage rate adjustment mechanism tied to increases seen in Guam's consumer price index.

The bill is aimed at helping maintain the purchasing power of minimum wage earners and cushion them against inflation.

“Tying the wage increases to the CPI makes the most sense. If the CPI goes up, wages increase. Should it plateau, there is no movement,” San Agustin said.

The Democratic senator sought a public hearing on the bill—which was introduced in January—to enable policymakers “to make responsible decisions on how we raise the wages of our hard-working and very deserving families.”

The chamber advised policymakers to adopt a market-driven approach to wage policy.

“While indexing minimum wage to CPI is not unprecedented in other jurisdictions, Bill 4-38 introduces a unique and unprecedented framework for Guam,” the chamber said in a statement.

In its current form, the chamber said, the bill lacks “statutory safeguards, exemptions or economic pause mechanisms, which are commonly included in similar legislation elsewhere in the United States.”

The chamber raised concerns that the absence of protection may lead to “uncontrolled and automatic annual increases in the minimum wage, independent of economic conditions.”

Noting the bill’s potential long-term implications on the business sector, the chamber said it would seek feedback from its members 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 4-38 and in shaping any advocacy efforts moving forward,” the chamber said.

Bill 4-38 has been referred to the economic investment committee, where it remains pending without further action.

San Agustin said the bill is part of “an ongoing effort to promote economic growth while protecting the welfare of Guam’s workers.”

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