Last Sunday, the minimum wage on Guam rose 50 cents from $8.25 an hour to $8.75.
Today, “valued customers” at some restaurants are being greeted with signs advising them that prices have been raised to make up for their increased costs.
This comes at a time when customers are dwindling in the face of the ongoing coronavirus outbreak worldwide.
On the door at Chesa Guam in Barrigada, a sign reads: “To Our Valued Customers … due to the increase in the minimum wage, we regret to inform you that we will be increasing our prices.”
A notice on the menu over at Linda’s Café in Hagåtña states: “We regret to inform you that effective Monday, March 2, menu prices at both Linda’s coffee shop and the Whispering Palms will be increased due to the passage of the minimum wage.”
At Shirley’s in Hagåtña and Tamuning, more and more tables are empty.
Albert Sison, the general manager at Shirley’s Hagåtña, said they’ve seen a very major impact as far as sales are concerned.
“Because not only with the coronavirus but also with regards to the increase in the minimum wage. We’re looking at that particular impact combined with the coronavirus … we’ve already experienced a decrease in sales may be to varying degrees, 20 percent more or less yes that’s right,” Sison said.
It is the service industry that is hit hardest by the minimum wage increase where, on average, more than 50 percent of employees are making minimum wage and they depend on customer tips to get by.
Shirley’s customer base is primarily local so, despite the downturn, they’ve been able to resist price increases. But Sison expects that will change.
“As it trickles down the line, hotels cutting hours, we have smaller businesses tightening the belt. That will eventually reach our level. People don’t have that expendable income to use and purchase things from us,” he said.
When that happens, Sison says their options are cutting work hours, reducing operating hours or limiting menu choices in order to cut costs. Layoffs would be a last resort.