Wednesday, July 29, 2009

Guam considered for Gitmo detainee trials?

There are hints emerging that Guam is about to become a dumping ground for the Guantanamo military detainees, possibly a location for trials. In a way I’m not surprised, but in another way I think I’m totally outraged by even the thought of it.

Guam has already lost one-third of its island to the military. It is getting a build-up of troops that will increase the island’s population by 15%. It has no vote in Congress. Guam does not get the respect it deserves from the U.S. political leadership. It has second class status but deserves being treated as a full equal.

The U.S. has to decide where it is going to hold the detainee trials. There are now about 229 detainees in Cuba. Some will be sent back to their country of origin, but others, and it is uncertain how many, will be held over for trial.

I am certain that there are some people on Guam who will welcome the detainee trials. It will likely bring hundreds, if not thousands, of people to the island, including international press. Restaurants and hotels will benefit. The press coverage may or may not help the island; it will all depend whether reporters try to understand the island or default to stereotypes.

But if the U.S. holds these trials on Guam it will be out of political expediency and to avoid stateside opposition. Guam, will, once again, be treated like a mere possession and its people of no importance.

What is the evidence that Guam may be picked? It’s really thin at this point.

-- A political writer in the Atlantic has Guam on his short list of guesses.

-- The decision by the Palau to take 13 detainees from Cuba. A Pacific Daily News opinion piece by William Clearly was spot-on with this observation: "Palau's eagerness to please Washington is best explained by the island government's lack of any real bargaining leverage, unlike 15 years ago when the U.S. needed to extricate itself from a U.N. trusteeship obligation to support Palau's social, economic and political development. That was why Washington agreed to subsidize Palau for a decade and a half." The U.S. decision to move some detainees to Palau says two things of importance for Guam: 1. The government is clearly considering the Pacific islands as a possible location. 2. Guam may have a little more bargaining leverage than Palau, but not too much more.

-- Guam was the original list of possible locations for holding the detainees before Cuba was selected.

-- In a recent interview on CBS, Sen. John McCain acknowledges the difficulty of finding a place in the U.S. that will accept the detainees. Here's a telling excerpt from that story: McCain "said an overall and comprehensive plan on finding a safe and secure place to house detainees is necessary to convince the public. "But to just say 'we're going to send them some place in the United States,' it arouses the obvious reaction: NIMBY, not in my back yard. And I fully understand that. I don't want them in Arizona, either!"

Tuesday, July 28, 2009

Is Guam’s leadership fighting to keep workers underpaid?

Guam's most effective champion in Washington is in Hawaii, and that is U.S. Rep. Neil Abercrombie.

Abercrombie, as the chairman of the Air and Land Forces subcommittee of the House Armed Services Committee, added two important provisions to the spending bill that funds Guam’s massive military build-up.

First, employers working on federal contracts will have to set pay to Hawaii's prevailing wage levels, which are a lot higher than the prevailing wage on Guam.

Secondly, foreign workers won’t be allowed to do more than 30% of the federally funded work. Prior to the Abercrombie amendment, it was estimated that anywhere 15,000 to 20,000 foreign workers were needed for construction on Guam. Now, contractors will have to ensure that 70% of their workers are U.S. residents from Guam, Hawaii and mainland.

Abercrombie obviously wants to help Hawaiian contractors, but this will help Guam's residents as well. Despite this, there will be considerable opposition.

The Washington Post, in a recent editorial, said the Abercrombie's U.S. worker and wage requirements will add $10 billion to the build-up cost. The Post wrote in part:
If giving U.S. workers jobs on Guam is a priority, this could be accomplished without driving wages up artificially to such a high level. You could, for example, keep the 70 percent restriction on foreign workers and let the market determine their wages.
But what is the construction labor “market” on Guam? Has Guam's longstanding reliance on foreign workers for construction depressed wages to artificial levels? Abercrombie wrote a letter in response to the Post's editorial. Here is part of it:
The alternative is to bring in foreign workers, for which the Guam government collects a bounty of $1,000 per head. However, this invites profiteering and would be a slap in the face of every qualified, unemployed American worker. The wages are established at the level for similar military construction in Hawaii, because we believe that wages should be commensurate with the experience and skills the jobs demand.
The national implications of Abercrombie’s position are just beginning to emerge. The Congressional Quarterly, in a piece published Saturday by writer Matthew Johnson, looks at the dispute between Abercrombie, who is a Democratic candidate for governor, and U.S. Rep. Zach Wamp, a Republican candidate for governor in Tenn., who opposes the Guam provision, CQ reports. Wamp is worried that military construction in other states will be shortchanged if build-up construction cost on Guam are increased.

[An outstanding analysis on the wage issue was written by Jayne Flores for the Marianas Variety, What's behind the Abercrombie amendment?]

In some sense, Wamp’s parochial views are understandable, but what isn't is the business and political opposition on Guam to Abercrombie. The Guam Chamber of Commerce as well as the Guam Contractors Association appear to be arguing that Abercrombie’s changes will drive up the construction costs for non-military projects as well, reports Heather Hauswirth for Guam Senator Frank Blas, Jr., is worried that Abercrombie wants to make Guam just as an expensive place to live as Hawaii. Kuam quotes Blas:
This would obviously raise our prices to those levels (Hawaiian), people are experiencing and suffering in Hawaii, and I don't want Guam to go down that road. It would behoove Mr. Abercrombie to seek discussion with people in Guam on what this may mean. I don't like it.
From this quote, I don't know whether Sen. Blas is just thinking out loud or expressing pointed opposition. But the Kuam story says Guam's business leaders plan to travel to Washington "to lobby Congress to remove Abercrombie's provisions," so it seems as if some minds have been made up.

In sum, Guam’s special interest will argue in Washington that if Guam is allowed to load up the island with lower paid foreign construction workers to keep wages down, Guam residents will be much better off. I guess it would be wrong for Guam residents to get high paying jobs to help pay for their children’s education, save for retirement, buy a new car and improve their standard of living.

Along that line, Kuam also reported that Madeleine Bordello, Guam’s congressional delegate, said: "It would be nice to pay the workers more, but it is just going to cost too much money."

Memo to Del. Bordello: The build-up should have cost more from the start. The original construction estimates were based on the hiring of a lot of foreign workers to help keep wages low. Is that what you are actually supporting?

Prices on Guam are going to rise because of the build-up no matter what. It increases the island’s population by 15% and by attacking Abercrombie's build-up requirements, Guam’s business opponents really stand to gain. They will be able to charge more for new, non-federal construction and yet keep salaries pegged to existing levels. It’s a great outcome for them.

And is the business community really united against Abercrombie on this? I doubt it. U.S. workers assigned to the island are likely to spend a lot of off-hours eating at local restaurants, shopping, and enjoying Guam’s recreational activities. A lot of Guam’s small businesses stand to do well by this.

If Guam’s leaders are really interested in the truth, then they should hire two separate, independent off-island economic consulting firms to assess the impact of the build-up and look at wage and cost of living issues.

What these economic studies may show is that the cost impact will be transient. Once the construction is complete and Guam returns to something akin to a steady-state, what will sustain high prices? Not much. The two largest and best paying employers on the island are the federal and Guam governments, and government wages aren't that high. The tourist industry, the island’s other large source of revenue, isn’t a high-wage industry. Guam does not have high-paying industries and that’s not likely to change. But there will be a real problem with housing availability and affordability -- a problem regardless of Abercrombie’s build-up provisions.

If Guam’s lawmakers are really concerned about Guam residents, then they should support Abercrombie and recognize that the build-up should have been undertaken by U.S. workers from the start. A true price tag has has now been affixed to the build-up.

Sunday, July 19, 2009

Guam and the cost of housing

The military build-up will likely increase the cost of living on Guam, especially housing. Housing costs will be driven up by this simple fact: The build-up will increase the island's population by about 15%. For sure, rents will rise as the available rental market decreases. Many will, of course, live on the bases but not everyone. A certain percentage of people will relocate permanently to Guam and that may put added pressure on housing prices.

For now, Guam remains relatively affordable. Here are some historical statistics through 2008 on housing prices trends

Single family homes on Guam that cost less than $220,000 are available and there are numerous condos in the $140,000 to $200,000 range. There are a number of real estate firms that provide searchable listing. Here's a link to the Guam Board of Realtors searchable listing. (For specific real estate firms, see reference link list on right hand side toward bottom.) Here's the link to the main Guam Board of Realtors site.

Regarding cost of living, Guam lawmakers just approved the minimum wage increase from $6.55 to $7.25, reports the Pacific Daily News. Lawmakers had no choice thanks to the build-up.

The $7.25 wage is also the minimum in nearly half the states. Here’s a rundown from U.S. Department of Labor statistics.

Washington: $8.55
Oregon: $8.40
Illinois: $8 to $8.25 in 2010
Vermont: $8.06
California, Massachusetts: $8
Connecticut: $8 going to $8.25 on Jan. 1 2010
District of Columbia: $7.55
Maine: $7.50
New Mexico: $7.50
Michigan: $7.40
Rhode Island: $7.40
Ohio: $7.30
Colorado: $7.28
States at $7.25: Arizona, Montana, Idaho, Hawaii, Virginia, West Virginia, North Carolina, Nebraska, Pennsylvnia, Texas, Utah, South Dakota, New Hampshire, New York, New Jersey, Indiana, Maryland, Iowa, Kentucky
Florida, $7.21
Alaska, Delaware,$7.15
Missouri: $7.05
Nevada: $6.85
Arkansas: $6.25
Georgia: $5.15
Wyoming: $5.15
Virgin Islands: $4.30
Puerto Rico: $4.10
Kansas: $2.65
The federal minimum wage is rising to $7.25 on Friday.