Chamber seeks urgent action on wage hike moratorium request

February 19, 2020

 

                                                               The coronavirus scae is affecting Guam tourism.

 

Citing the economic impact of the novel coronavirus scare,  the Guam Chamber of Commerce is asking the government to take immediate action on its request for deferment of minimum wage increase, which is scheduled for implementation on March 1.

 

Signed into law on Oct. 14 last year, Public Law 35-38 bumps Guam's minimum wage to $8.75 per hour this year. The second installment of the two-tiered wage increase will come into force in March 2021, thus raising the hourly rate to $9.25.

 

“Our request was merely to delay the increase by six months,” Christine Baleto, chair of the Chamber board, said in a letter to Gov. Lou Leon Guerrero.

 

If the Chamber’s request is granted, the minimum wage raise would be rescheduled for Sept 1.

 

“This request is not meant to dissuade the increase altogether,” Baleto said. “We would like to reiterate that the request is to merely delay the implementation of the first increase by six months, so our government can monitor the impact this global virus would have on our economy.”

 

The Chamber made the initial request to the governor on Feb. 13.

 

“While we did not receive an official response from the governor's office in reference to our letter of Feb. 13, 2020, we were informed unofficially that a moratorium cannot be issued via an executive order, since it would impede on a public law,” Baleto said.

 

“The Guam Chamber of Commerce humbly requests that legislation not only be submitted by the Office of the Governor, but a special session be called to address this emergency,” she added.

 

Baleto said the novel coronavirus outbreak, which originated in China and has since spread to seven more countries, is taking its toll on Guam’s tourism industry.

 

On Tuesday, Guam Visitors Bureau president Pilar Laguana reported a total of 15,000 seat cancellations, which she said would result in revenue losses amounting to $9.1 million between February and April.

 

Tom Ada, executive manager of Guam International Airport Authority, said statistics from the Transportation Security Administration indicated a significant drop in traffic. The number of departing passengers between 1 p.m. and 4 p.m. has gone down from 32,000 to 24,000, he told the GVB forum on coronavirus update on Tuesday.

 

“In discussions with stakeholders in the tourism industry, which employ a large percentage  of entry level wage earners, the visitor cancellations are creating uncertainties on operations, and PL 35-38 creates an additional adverse impact,” Baleto said. “Additionally, the benefits outlined in the revised Dave Santos Act are directly (or even indirectly) in the tourism industry.”

 

She said many of the workers who would be affected by reduced hours or layoffs are employed with for companies that do not qualify for exemptions. “For those small entities who do qualify , the savings provided by the mandate, which is up to $2,000 on business privilege taxes annually, would be able to offset the increases of just one employee,” Baleto said.

 

“However, for those who employ multiple staff at entry level positions, not to mention possible wage compression for other employees, the savings would be welcome but not enough to balance operations with this new statute,” she added.

 

While the outbreak might eventually be curbed, Baleto said, the economic recovery “is not as simple  as  we  have  experienced previously with other outbreaks in the past.”

 

Prior to the signing of the law last year, the Chamber opposed the legislated wage increase, saying rate adjustments must be determined by market forces.

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