The problem with hiring an “Asian” worker who makes $500 a week is that he sends most of the money home. Temporary workers do not spend money in restaurants, hotels or shopping. They do not buy or rent cars. They do not pay much income tax. They do not bank on Guam. They do not invest in real estate, rent apartments or buy durable goods.
On the other hand, a U.S. union worker making $2,000 a week spends maybe half of his pay check on Guam. Money spent on Guam circulates around and around on Guam maybe three or four times before leaving Guam.
“Asian” workers have no disposable income whereas the U.S. union worker has a big disposable income to dispose of on Guam. Retirees, the working poor and government workers will suffer as they have no way to take advantage of this new disposable income on the island. Pretty much all the private business on the island will see an increased profit. Six percent profit on a thousand dollars is better than 6 percent profit on a hundred dollars when I went to school.
The question here is: “Is it better to send $2 billion to the Philippines or spend $8 billion on Guam?” This is without even considering the threefold recirculation factor. Although it is not clear to me who gets to collect the income taxes on $8 billion a couple of times, it would appear better for the Guam government to have a chance at a $24 billion tax base than collecting minimal tax on $2 billion before it leaves Guam.
CHARLES ADAMS
Cost Engineer
