In March, the minimum wage will be raised from $8.25 to $8.75 for about 3,500 workers locally. Just days ago, an estimated 20,000 would-be visitors canceled their trips to Guam, amounting to a loss of more than $9 million to the island’s tourism industry. That number has increased to 30,000 visitors.
The double whammy of less business and higher wages is leaving some worried about their bottom line for the coming months.
The Guam Chamber of Commerce asked Gov. Lou Leon Guerrero to hold off on the wage hike, but she said the raise will move forward as planned.
“I want it to be held off as well,” said a business owner who asked for only his first name, Nathan, to be used.
He said sales are down and the impending wage hike is going to mean that much more of a struggle.
“Business has been a little slow,” he said. “We had expectations for this month, but it’s not really happening. If we increase the minimum wage, of course we will have to cut hours, so our staff members will have to have shorter hours and it will affect them with their bills.”
He said it’s not just his business that will suffer.
“Oh, definitely this is going to hurt all businesses,” he said. “Businesses just can’t afford to pay the overhead.”
He said the hike comes at a bad time and could have a negative impact on businesses across the island.
“Their sales are being affected by tourism, less customers coming through. There is not a lot of spending in retail stores, there is not a lot of eating out,” he said.
“It’s very slow in the tourism industry now,” said Yigo resident John Valencia, who works at a local tour company.
Valencia is of two minds when it comes the minimum wage hike and the Covid-19 scare keeping visitors at bay.
“I think it’s a good thing because everything on Guam is getting more expensive, so minimum (wage) should go up more,” he said of the wage hike.
Passengers disembark from the Daffy Duck, an amphibious vehicle used for short ocean tours at the SandCastle Guam in Tumon on Friday afternoon. Photo by Norman M. Taruc/ The Guam Daily Post
And while the lack of tourists is impacting the industry he works in, he said, maybe less people coming to the island has a positive aspect.
“It’s a good thing because we don’t want it to spread around the island,” Valencia said.
He said he is taking precautions while on the job.
“I have to always wear a mask,” he said.
But there is little consumers can do to protect themselves from a higher cost for goods and services, according to Jay Cruz, 25, of Toto.
“All I know is that once minimum wage goes up, everything else goes up. It’s deserved, but that does not mean the cost of everything won’t go up too,” he said.
“Most of our customers are tourists,” said Leonor Patricio, who works at a kiosk that sells mainly Zippo lighters — a favorite with many visitors from Asian countries.
She said that since the island’s decline in visitors began, some days her store has no sales at all. “It’s very, very slow,” she said.
An increase in the minimum wage can be survived, she said, but she does not know if her business can survive in the coming months it will take to recover after the outbreak.
“The minimum wage — if they raise it, it’s OK, we can handle it. But if it’s like this every day — no tourists…maybe we will shut down the store,” Patricio.
Evangeline Delambaca, a supervisor at Levi’s Outlet at the Guam Premier Outlets, said Levi’s should be able to weather the storm during the Covid-19 outbreak and still manage to give employees an increase in wages needed to keep up with the island’s rising cost of living.
“It really affects us because we have less customers and less sales every day, and then also the raise. But we do support the raise of minimum wage,” she said. “Especially for the employees who have been here many years and still make the same wage.”
Although the Guam branch of South Korea’s largest tour agency, Hana Tour, has predicted arrivals to remain low in the next couple of months, Delambaca is hopeful — as many others likely are — that the industry will rebound eventually.
“It’s just for now, maybe,” she said. “It’s just because of this virus, but hopefully it will be OK and we will have a lot of tourists again, and business will be OK.”
