While the CNMI experienced 42-percent increase in wages since 2014, according to the 2016 Prevailing Wage and Workforce Assessment Study results released yesterday, in Guam, there is a proposal by its legislature to increase the territory\u2019s minimum wage for the third time in two years. <\/p>\n
According to Guam Chamber of Commerce chair Bobby Shringi, the concern within the island\u2019s business community is that wages are \u201cgoing too fast, too quick.\u201d<\/p>\n
And that will have wide-ranging impacts on Guam, Shringi said. \u201cA lot of small businesses will be impacted. The cost of goods is going to be impacted. \u2026It\u2019s the small ones, they are the ones going to be impacted. <\/p>\n
\u201cWhen your operating costs go up, what is the first thing you increase? What\u2019s the first thing you do? You either find a way to reduce your operating expense, which is to reduce [the number of] employees, or increase your costs. That is where the challenges come in,\u201d he added. <\/p>\n
At the last Saipan Chamber of Commerce general meeting, Shringi thinks the CNMI mirrored what Guam did in 2015. <\/p>\n
\u201cGuam changed its wage in 2015. So we went from $7.25 to $8.25 and I believe that the CNMI is now at $7.25. When the CNMI finally caught up with Guam, Guam pumped it up by another dollar Now, there is a proposal on the table to take it all the way to $10.10 in two years. Businesses have just absorbed a huge impact in 2015, now lawmakers are saying we are going to take this $8.25 to $9.20 and ultimately to $10.10 in 2019.\u201d <\/p>\n
\u201cThis is not really about the large entities because a lot of the large companies are not even in that position where they have a number of employees earning minimum wage. So the impact isn\u2019t great for them.\u201d<\/p>\n
Shringi questions the timing of the wage increases. \u201cDuring that time, Dusit Thani has just opened with 700 employees, JRC has just brought in several hundred new employees. Applebee\u2019s and iHop just hired another 100-plus employees. So was this a business boom because of the minimum wage or was the timing perfect?<\/p>\n
According to Shringi, the business community in Guam knows that a wage increase could happen. \u201cThe reality is it\u2019s a hot potato issue. Unfortunately, there\u2019s an election season that is looming so something is going to pass. <\/p>\n
\u201cSo instead of fighting this, rather than putting the armor in front of you, let\u2019s work with lawmakers and see what\u2019s palatable, what\u2019s balanced and maybe, instead of going up by $2 over a two-year period, maybe we can go up $0.95 cents over a two-year period. That still represents a 6-percent and a 5-percent increment, respectively. Keep in mind that in the private sector, the 85-percent increase per increment is typically a high increment. Meaning, you\u2019ve done really well this past year and we are giving you a 5-percent increase, 3 to 5 percent is the norm. It\u2019s fair, it\u2019s palatable, businesses have enough time to absorb it so that really the big thing,\u201d Shringi said.<\/p>\n
\u201cThe worst thing is going across the board,\u201d he added.<\/p>\n
According to Shringi, he knows it is the resolve of the Guam legislature to pursue some form of wage increase. But the Guam Chamber of Commerce would like to reach out in order to reach a \u201cpalatable\u201d discussion.<\/p>\n
A possible solution to increase a person\u2019s take home pay without touching wages is the creation of a tip credit program that allows the F&B industry to use a certain portion of tips for wage hikes. \u201cIt sort of caps the wage at a certain level. As minimum wage goes up, tips can be applied towards the difference between the current minimum wage and future minimum wage.\u201d <\/p>\n
\u201cGuam has had that policy for a long time, many states already do. But it just suddenly disappeared a few years ago. Let\u2019s re-create it. That would actually protect the F&B industry from raising its costs, especially the hotels and restaurants,\u201d Shringi said.<\/p>\n
There is also a youth minimum wage because studies show that when minimum wage increases, those impacted are the young ones. \u201cSo there will be a cap-skilled workers here, unskilled workers there. Minors are not looking for a career, they are looking for part-time jobs so they can take care of bills and possibly pay for college.\u201d<\/p>\n
The Guam Chamber of Commerce is also asking its legislature to look into the Dave Santos Act, which is a gross revenue tax exemption issue \u201cso small businesses can at least get something to offset an increase in minimum wage,\u201d<\/p>\n
\u201cThe Guam Chamber believes that wage increase should be dictated by market forces, not by government methods. That is the sole intent of the organization and the position we continue to preach but then there\u2019s the reality of what is politically right,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"
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