Guam – Another public hearing was held on the bill to raise the minimum wage this afternoon at two p.m. Members of the island’s tourism industry came out to testify in opposition to the raise saying it would hurt the industry and cause layoffs. However some, like UOG Professor Gerhard Schwab testified in favor of the bill saying it will help close the growing gap between the rich and the poor.
If the minimum wage is raised Al Ysrael says that after GRT’s are factored in businesses will actually be paying an additional $2.96 an hour while employees will receive only an additional $1.92 an hour after taxes. “So here you have the businessman being forced to increase their rates to $2.96 cents an hour while the poor schlub, smuck, will only get a $1.92 an hour. There’s where the misconception arises but if they cannot see that…in the words of Archie Bunker…hey dingbats sleep on it,” said Ysrael. Ysrael believes the bill will ultimately pass because it’s an election year.
Meanwhile GVB Chairman and businessman Mark Baldyga says he’s already cut as many costs as he possibly can so if minimum wage is increased he says it will cause layoffs and will force him to close the Lina’la cultural park in Tumon. “This is not macroeconomic theory. It is a simple incontesable fact and I will sit with any of you one on one and go through and walk you through it. There is no choice. I must cut jobs. The wage increase that you would mandate will force me to fire the very same people you are trying to help. There is no debating this fact,” said Baldyga.
However, not everyone testified in opposition to the minimum wage increase. UOG Professor Gerhard Schwab said, “I think it is long overdue that we raise the minimum wage because American society as a whole and Guam society is increasingly a society of inequalities that separate people and people at the lowest strata can’t keep up.” Schwab says that globally the gap between the rich and poor keeps increasing supported by what he calls a shadow welfare system that supports the middle class and corporations more than it does the poor. He says this shadow welfare system comes in the form of various tax breaks. For example, on Guam some businesses are given qualifying certificates that grant them tax breaks. “I would contend for instance if we add up all of the qualifying certifcates all of the tax exemptions all those costs that all those taxes that businesses corporations would have had to pay is more than what we would pay to help poor people,” said Schwab.