Wage Proposal being debated

Wage provision worrisome: Proposal could lead to higher cost of living

BY CONNOR MURPHY • PACIFIC DAILY NEWS

A proposal to increase wages for workers on military buildup construction projects could lead to more expensive homes and a higher cost of living, said some in the business community.

The annual defense spending bill, recently passed by the House of Representatives, contains an amendment by Hawaii Rep. Neil Abercrombie that would require wages paid to construction workers of buildup projects on Guam to be at least as high as those paid to similar workers in Hawaii.

Those Hawaiian wages are up to 250 percent higher than Guam's current wages, according to a recent Congressional Budget Office report. The report stated that if the proposal were to become law, it would increase the cost of the buildup by $10 billion.

Abercrombie has said he included the amendment -- as well as one to limit work done by foreign workers to 30 percent of each project -- to ensure that buildup-related jobs go to Americans at good wages.

The Senate is working on its annual defense spending bill, and the two bills will be reconciled before a final version is sent to President Obama for his signature.

All construction workers on island would likely see higher pay if the construction wage hike was increased, said Roseann M. Jones, professor of economics and policy planning at the University of Guam.

"I think it's going to take a little bit of the wind out of the sails of the construction industry," she said.

Yesterday's Washington Post included an editorial blasting Abercrombie's wage proposal, citing the costs involved.

"Why add to the burden on taxpayers with these unnecessary provisions?" the editorial asked. "It is tempting to seize on any plan that tries to offer Americans jobs, but this cost is too great."

Housing Affected

Since labor costs are a large portion of each construction project's price tag, this would translate to higher costs for virtually all construction on island, said Peter Sgro, president of International Group Inc., which has been engaged in numerous financial and real estate transactions.

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WAGES: GUAM VS. HAWAII

Wages determined by the Department of Labor for federal projects under the Service Contract Act (all figures are rates per hour) versus Hawaii's:

Jobs In Guam . . . . . . . . .. . . . . . . .In Hawaii %Change

Carpenter, maintenance $13.00 $30.88 +137.5%

Electrician, maintenance $14.99 $28.25 +88.5%

Heavy equipment mechanic $14.81 $26.98 +82.2%

Heavy equipment operator $13.73 $29.54 +115.1%

Painter, maintenance $13.55 $23.09 +70.4%

SPEAK OUT

Guam Delegate Madeleine Bordallo

Call: Guam District Office 477-4272; Washington, D.C. Office 202-225-1188

Comment online: www.house.gov/bordallo

Write: 120 Father Duenas Avenue, Hagåtña, Guam 96910

Hawaii Rep. Neil Abercromie

Call: Hawaii District Office: (808) 541-2570; Washington D.C. Office: (202) 225-2726

Online: www.house.gov /abercrombie

Write: 1502 Longworth House Office Building, Washington, D.C. 20515