The Case for Fair Wages

Presentation by Vice Speaker BJ Cruz THE CASE FOR FAIR WAGES For more information, please contact: The Office of Vice Speaker Benjamin J.F. Cruz I Mina’trentai Dos Na Liheslaturan Guahan T 477-2520/1 | F 477-2522 http://www.senatorbjcruz.com 1 TABLE OF CONTENTS FORUM PRESENTATION 3 INCOME EQUALITY AND GENDER 12 LOCAL IMPACTS OF THE LAST FEDERAL MINIMUM WAGE INCREASES 17 COST OF LIVING 24 POVERTY ON GUAM 27 IMPACT OF PROPOSED MINIMUM WAGE INCREASE 31 ECONOMICS OF MINIMUM WAGE 38 SETTING THE RECORD STRAIGHT ABOUT THE MINIMUM WAGE 50 For more information, please contact: The Office of Vice Speaker Benjamin J.F. Cruz I Mina’trentai Dos Na Liheslaturan Guahan T 477-2520/1 | F 477-2522 http://www.senatorbjcruz.com 2 FORUM PRESENTATION 3 FORUM PRESENTATION 44 12 6 Women make up 44% of There are 12,160 women Of the 6,514 families the island’s total on Guam who live below living in poverty, 2,874 workforce the poverty line. families have female heads of household However, while without a contributing employment numbers male present. for women increase every year, more women earn poverty wages than their male counterparts. Source Guam DOL Current Employment Source: U.S. Census Bureau, 2010 Census Guam Table 1-17. Poverty Status and Workers in Family in 2009 by Statistics Historical Tables 1993-2013. Ethnic Origin or Race: 2010 December 2013 4 FORUM PRESENTATION • +14.53%. Ave $35.00 140 Hourly Rate in the Private Average Wages in the Private Sector, Minimum Wage, Sector is $12.77, 14.53% and the Cost of Living on Guam Average Hourly Rate - CPI FOOD, 132.1 $30.00 higher than in Q3 2007, the Private Sector 130 quarter the first of the Minimum Wage Per CPI HOUSING, Hour 124.3 three-step minimum wage CPI FOOD $25.00 increases was CPI HOUSING CPI MEDICAL 120 implemented. CPI MEDICAL CARE CARE, 114.7 • +32%. Food prices are $20.00 Min Wage, Ave Private 110 up 32%; Housing, 24%; Wage Hourly 2014-Q1, Wage, 2014- Medical Care, 15%; Power, $15.00 $7.25/hr Q1, $12.77/hr 42%; Fuel, 26%. Living costs in Guam are up 100 significantly compared to $10.00 Index costs in 2007. CPI 2007 90 • $1.16. A minimum $5.00 wage earner today would need a $1.16 raise just to $0.00 80 have the same buying 2007-Q2 2007-Q3 2007-Q4 2008-Q1 2008-Q2 2008-Q3 2008-Q4 2009-Q1 2009-Q2 2009-Q3 2009-Q4 2010-Q1 2010-Q2 2010-Q3 2010-Q4 2011-Q1 2011-Q2 2011-Q3 2011-Q4 2012-Q1 2012-Q2 2012-Q3 2012-Q4 2013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q1 power as a minimum wage 2007-Q1 worker had five years ago. Quarter and Year Source Guam DOL Current Employment Statistics Historical Tables 1993-2013. December 2013 Guam Consumer Price Index 1st Quarter 2007 through 1st Quarter 2014 Vol. XL No 1 5 FORUM PRESENTATION 2007 2014 $14.95/50-LB BAG $29.99/50-LB BAG $1.89/12-OZ CAN $3.19/12-OZ CAN Photos by C. Catunao. 6 FORUM PRESENTATION Stock photo from http://onlineathens.com 7 1 After several months of study and consultations with island economists , FORUM PRESENTATION Vice Speaker Cruz will be introducing legislation to raise Guam’s minimum wage from $7.25 to $10.10 an hour over the next three years. Year Minimum Wage Estimated Impact % of Workforce 2015 $8.20/hr 5,035 8% 2016 $9.15/hr 14,011 23% 2017 $10.10/hr 17,514 28% Based on the latest occupational data2: • 8% (5,035) make less than $8.20/hr, • 23% (14,011) make less than $9.15/hr, and • 28% (17,514) make less than $10.10/hr. Raising the minimum wage to $10.10/hr would benefit over 17,514 workers from all types of households by 2017. 1 Dr. Claret Ruane, Dr. Rosanne Jones, Dr. Joe Bradley, Mr. Gary Hiles, Mr. Albert Perez 2 Occupational Employment Statistics Data 2012, U.S. Bureau of Labor Statistics 8 48,000 Employment Private Sector Hourly Rate - Private Sector FORUM PRESENTATION $24.00 Sum of Min Wage The last minimum wage increase did not 46,000 negatively affect Jobs, Wages, Hours. Before Minimum Wage Increases 44,000 $19.00 Compared to labor statistics 4 years before Periods Following the Increased Minimum Wage the minimum wage 42,000 increases began in July 2007 and 4 years after the last minimum wage $14.00 Employment increase in July 2009 40,000 when the minimum wage 7/24/2008: $6.55 7/24/2008: $7.25 7/24/2009: 7/24/2007: $5.85 7/24/2007: was raised to $7.25: • Jobs: +2,477 38,000 • Wages: +$1.50/hr $9.00 • Hours: +1.2hrs/wk 36,000 34,000 $4.00 Sep-02 Sep-03 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Source: Calculations from Guam DOL Current Employment Statistics Historical Tables 1993-2013 9 FORUM PRESENTATION Henry Aaron, Brookings Institution — Katharine Abraham, University of Maryland — Daron Acemoglu, Massachusetts Institute of Technology — Frank Ackerman, Synapse Energy Economics — Earl Adams, Allegheny College (retired) — Jacqueline Agesa, Marshall University — Tanweer Akram, ING Investment Management — Randy Albelda, University of Massachusetts, Boston — Carolyn Aldana, California State University, San Bernardino — Mona Ali, State University of New York, New Paltz — Sylvia Allegretto, University of California, Berkeley — Elizabeth Ananat, Duke University — Bernard E. Anderson, University of Pennsylvania — Marcellus Andrews, Bucknell University — August Ankum, QSI Consulting — Eileen Appelbaum, Center for Economic and Policy Research and University of Leicester — Kenneth Arrow, Stanford University*+ — Michael Ash, University of Massachusetts, Amherst — Bevin Ashenmiller, Occidental College — Glen Atkinson, University of Nevada, Reno — David Autor, Massachusetts Institute of Technology — M. V. Lee Badgett, University of Massachusetts, Amherst — Ron Baiman, Benedictine University — Dean Baker, Center for Economic and Policy Research — Erdogan Bakir, Bucknell University — Stephen Baldwin, Retired — Erol Balkan, Hamilton College — Jennifer Ball, Washburn University — Gustavo Barboza, Clarion University of Pennsylvania — David Barkin, Universidad Autonoma Metropolitana, Mexico City — William Barnes, University of Portland — Charles Barone, Dickinson College — Alan Barreca, Tulane University — Chris Barrett, Cornell University — Robin Bartlett, Denison University — Donald Basch, Simmons College — Laurie Bassi, McBassi & Company — Francis Bator, Harvard University — William Baumol, New York University+ — Amanda Bayer, Swarthmore College — Dale Belman, Michigan State University — Lourdes Beneria, Cornell University — Peter Berg, Michigan State University — Gunseli Berik, University of Utah — Eli Berman, University of California, San Diego — Alexandra Bernasek, Colorado State University — Jared Bernstein, Center on Budget and Policy Priorities — Nancy Bertaux, Xavier University — Charles Betsey, Howard University — David Betson, University of Notre Dame — Haimanti Bhattacharya, University of Utah — Carole Biewener, Simmons College — Cihan Bilginsoy, University of Utah — Cyrus Bina, University of Minnesota — John Bishop, Cornell University — Josh Bivens, Economic Policy Institute — Sandra Black, University of Texas, Austin — David Blanchflower, Dartmouth College — Gail Blattenberger, University of Utah — Robert Blecker, American University — Alan Blinder, Princeton University — Barry Bluestone, Northeastern University — Lawrence Blume, Cornell University — Peter Bohmer, Evergreen State College — Barry Bosworth, Brookings Institution — Howard Botwinick, State University of New York, Cortland — Heather Boushey, Washington Center for Equitable Growth — Roger Bove, West Chester University (retired) — Samuel Bowles, Santa Fe Institute — Elissa Braunstein, Colorado State University — David Breneman, University of Virginia — Marc Breslow, Massachusetts Climate Action Network — Dominic Brewer, University of Southern California — Nancy Brooks, Cornell University — David Brookshire, University of New Mexico — Christopher Brown, Arkansas State University — Clair Brown, University of California, Berkeley — Thomas Bruggink, Lafayette College — Michael Brün, Illinois State University — Luis Brunstein, Hiram College — Robert Buchele, Smith College — Nina Banks, Bucknell University — John Burkett, University of Rhode Island — Joyce Burnette, Wabash College — Gary Burtless, Brookings Institution — Paul D. Bush, California State University, Fresno (emeritus) — Al Campbell, University of Utah (emeritus) — Jim Campen, University of Massachusetts, Boston (emeritus) — Paul Cantor, Norwalk Community College — Marie-Louise Caravatti , American Federation of Teachers — Jeffrey Carpenter, Middlebury College — Michael Carter, University of Massachusetts, Lowell — Dell Champlin, Eastern Illinois University (retired) — Richard Chapman, Westminster College — John Dennis Chasse, State University of New York, Brockport — Howard Chernick, Hunter College, City University of New York — Robert Chernomas, University of Manitoba — Victor Chernozhukov, Massachusetts Institute of Technology — Robert Cherry, Brookly“…withn College — Lawrenc e theChimerine , weightRadnor Consulting S eofrvices —evidence Menzie Chinn, University onowf Wisconsin — Charles Chittle, Bowling Green State University — Mussaddeq Chowdhury, University of Redlands — Paul Christensen, Hofstra University — Kimberly Christensen, Sarah Lawrence College — Gary Clayton, Northern Kentucky University — Rachel Cleetus, Union of Concerned Scientists — Nathaniel Cline, University of Redlands — Richard Coe, New College of Florida — Jennifer Cohen, Whitman College — Steve Cohn, Knox College — William Comanir, University of California, Los Angeles and Santa Barbara — Sean Corcoran, New York University

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