Why combine a new minimum wage with a BPT increase?

(From Sen. Wil Castro's page)

Guam – There’s a new minimum wage bill being proposed but one with a twist.

Introduced by Senator Wil Castro, Bill 142-35 proposes to raise the minimum wage to $8.75 per hour effective July 1, 2020 and $9.25 an hour effective July 1, 2021.

But here’s the twist: Castro’s bill is different from previous minimum wage bills in that Bill 142-35 also seeks to roll back the Business Privilege Tax from 5 percent to 4 percent.

Castro said he is in full support of improving the earning power of all workers across the board.

The senator believes that every resident should be afforded an opportunity to improve their lives and compete so that they may improve the quality of life for their families.

However, Castro said businesses should also be given the means to make this happen.

This is why the senator wants to roll back the business privilege tax at the same time because he says the continued pressure on the private sector may hurt the very people a minimum wage increase is designed to help.

Bill 142-35 is the second minimum wage bill filed this year.

Earlier, Sen. Joe S. San Agustin filed Bill 136-35, which would raise Guam’s hourly minimum wage in two 50-cent increments — from $8.25 to $8.75 by March 1, 2020, and to $9.25 by March 1, 2021.

Castro stressed there is a need to roll back the BPT by 1 percent in order to give businesses the means to pay for any minimum wage increase.

Absent an economic impact study, Castro believes his minimum wage bill is something that the private sector can get behind.

He added that the last thing the island needs is stymied private sector growth, a further increase in prices, capital flight or other unintended and irreversible consequences.