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From $S$1000 to US$40,000 to get an outsider
Haidee V. Eugenio
For every foreign worker hired, a Guam employer will have to pay US$40,000 in annual fee—a sharp increase from only US$1000 they now pay to the Department of Labor—once a controversial bill that purports to raise government revenue eliminates the H2 programme and gives middle class jobs that pay at least US$30 an hour to local residents, becomes law.
Every single non-immigrant temporary worker is targeted—from masons, carpenters, plumbers and technicians to professionals like nurses and teachers.
Introduced by Democratic Sen. Matt Rector, Bill 48, or the “Middle Class Job Creation Act of 2009,” is now under the review of the Guam Legislature’s Committee on Labor and Public Structure, which held hearings from March 3 to 6 to receive testimony on it.
Guam businesses, lawmakers and the Department of Labor are quick to oppose Bill 48, citing the exorbitant fees imposed and its crippling effect on the ability of the island to respond to the needs of the US$15-billion military buildup.
The Guam Chamber of Commerce, for example, urged the Guam Legislature to focus instead on bills that grow the economy, and called on Rector to reconsider his bill “in light of its debilitating effects to the economy.”
Frank Campillo, the Chamber’s board chairman, cited the need for foreign workers to prepare for the $15-billion military buildup.
In a statement ahead of the public hearings on Bill 48, the Chamber cited a US Department of the Interior report to a congressional panel on September 23 that about 15,000 workers will be needed for building military facilities, and another 5000 to 7000 will be needed for construction in the civilian areas of Guam.
Campillo said by making it prohibitive for employers to hire foreign workers, the bill would strongly affect the construction industry.
He added that the measure would destroy opportunities for small players that may be created by the upcoming military buildup.
“If the objective is to prevent the island from enjoying the benefits of the military buildup, then this bill is good.
“However, if the objective is to allow the island to profit from this economic boon, evidently this bill is very, very bad.
“I questioned the wisdom and objective of anyone who proposes such a bill,” he said.
But the bill’s author said businesses that oppose his bill do not have a full understanding of economics.
Rector said contractors can recover the cost by passing it to the federal government and other customers.
“The federal government owes us a lot of money and this is one way we can get it,” he said.
Republican Sen. Ray Tenorio, who opposes the bill, said the measure —if passed—will end any chance Guam has to build the infrastructure needed for the military buildup.
No excuse
According to Rector, there is absolutely no excuse for the presence of thousands of temporary workers currently employed on Guam and the promise of thousands more in the future while over 30,000 local adults have given up looking for work on Guam.
An estimated 8.3 percent of those that are looking for jobs are unable to find employment, he said.
The senator said Bill 48 is “designed to eliminate the H2 programme, not to collect revenue from H2 workers”.
He said the foreign worker programme is driving down wages on Guam to half of what they should be and replaces local workers with temporary foreign workers that employers can exploit.
The senator said by raising wage levels and making jobs more attractive for local workers, Guam would not become dependent on foreign workers.
He said local workers who have applied for jobs got rejected because the companies they applied for would rather hire H2 workers.
He added that no resident wants the jobs offered because the pay is so low that they prefer to stay home and collect food stamps and other government aid for US$13.25 an hour.
The bill, Rector said, intends “to create thousands of good, middle class jobs for our people by making it no longer profitable for businesses to replace Guam’s resident workers with H2 workers.
“By implementing a US$40,000 per year fee for each temporary worker, it will make it more profitable to hire local workers with wages comparable to that of their brothers and sisters doing exactly the same work in Hawaii or elsewhere in the nation,” Rector said in his bill.
But Senator Tenorio said Rector can help increase local jobs by supporting Guam Community College and the Guam Contractors’ Association Trades Academy which train residents so they can qualify for skilled jobs.
The measure will also have the effect of bringing billions of additional federal dollars to Guam and ensuring they circulate within the economy.
With an estimated 6000 temporary foreign workers currently on Guam, a minimum of US$240 million could be readily available to the government to help fund critical budget issues like the construction of a new landfill.
But the Guam Contractors Association said the construction industry’s dependence on H-2 workers is a result of limited numbers of skilled workers and poor training resources on Guam.
GCA president James Martinez said the government can’t just increase wage rates if there are no qualified people to do the jobs.
The Legislature had already put in a rider in last year’s budget bill—increasing the fee from US$250 to US$1000.
Maria Connelley, director of the Department of Labor, said when the fee was raised last year, employers took a long time to get use to it, and Rector’s bill will pose yet another problem because almost all types of businesses will be affected.
She said even if Guam has qualified people on the island, it will still not be able to meet the federal government’s estimation of 30,000 to 50,000 workers needed for the buildup.
What happens if bill is passed?
• Employer will have to pay US$40,000 in annual fee—a sharp increase from only US$1000 they now pay to the Department of Labor
• H2 programme scrapped
• Middle class jobs pay at least US$30 an hour to local residents
• Every single non-immigrant temporary worker is targeted—from masons, carpenters, plumbers and technicians to professionals like nurses and teachers.
Killing the skills
training programme
It’s not only the business community that wants Bill 48 scrapped. Guam Community College said the bill could kill a primary skills training programme.
The US$1000 that employers currently pay annually to the Department of Labor for each non-immigrant hire goes to the Manpower Development Fund, 70 percent of which supports Guam Community College’s skills training programme while 30 percent is retained by the Department of Labor to run the foreign worker visa programme.
Guam has approximately 15,000 temporary non-immigrant workers, contributing an average of US$1.5 million to the Manpower Development Fund.
But under Rector’s bill, it would not only raise the annual fee from US$1000 to US$40,000, but would also get rid of the training fund and shift the money to the government’s General Fund for appropriation by the Legislature.
GCC School of Trades Professional Services said without the Manpower Development Fund, they won’t be able to support the apprentices enrolled in the programme, the two employees at the programme, and to buy equipment for many of its activities.
But Rector said his bill could generate as much as US$105 million in fees for public services, including training programmes for local workers.
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