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HAGÅTÑA, GUAM - The Guam Chamber of Commerce recognizes the very real cost-of-living challenges facing Guam’s families and workforce. Affordability matters - to employees and employers alike. For that reason, any proposal aimed at addressing rising costs deserves careful attention. It is equally important, however, that the business community clearly understand what Bill No. 4-38 would do and the long-term consequences it may create for Guam’s economy.
Bill No. 4-38 would permanently link minimum wage increases to the Consumer Price Index (CPI). In practical terms, this means that whenever prices rise, wages would automatically increase—without legislative review, without consideration of local business conditions, and without the ability to pause during economic downturns. Once implemented, this mechanism would continue indefinitely.
Guam’s economy is fundamentally different from larger, demand-driven markets. Rising prices here are not the result of wages increasing too quickly or consumer spending overheating the economy. Instead, inflation on Guam is driven largely by external factors beyond the control of local businesses or workers, such as imports, shipping costs, fuel prices, utilities, regulatory requirements, and federal or global economic forces. CPI on Guam reflects these outside pressures, not local economic growth or productivity.
Because of this structure, automatically increasing wages whenever CPI rises places additional and unpredictable costs on employers who are already absorbing higher operating expenses. Most Guam businesses, particularly small and family-owned companies, operate on narrow margins. When labor costs increase automatically and without warning, businesses are left with limited choices: raising prices, reducing employee hours, delaying hiring, or scaling back investment and expansion plans.
If the goal is to improve affordability for Guam’s families, the Chamber believes the focus should be on addressing the root causes of high prices rather than imposing automatic cost increases on employers. Real progress can be made by reducing regulatory delays that increase the landed cost of goods, addressing fuel and utility expenses that affect every household, simplifying permitting and compliance requirements, providing targeted tax relief or credits for low- and middle-income workers, and encouraging sustainable wage growth through productivity, training, and business expansion.
While well-intended, Bill No. 4-38 risks increasing prices, reducing flexibility, and undermining affordability for the very people it is meant to help. Chamber members are encouraged to closely review this proposal and understand how permanently linking wages to CPI could affect payroll costs, pricing decisions, hiring, and long-term business sustainability on Guam.
*** End of Release ***
January 6, 2026
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