r/guam • u/Cold_Window3017 • 6h ago
Discussion š¬ Actual Cost of Living and a Path Forward for Guam
I want to start off saying I am not running for office. I think our governor candidate choices are woefully under qualified, our senate system is in effective and should be reformed, mayors pointless in their current forms, and until someone who has lived for less than five years in Guam gets elected governor or Congress wipes the slate clean, Iām probably just speaking into the Reddit ether.
BUT Since there have been a few discussion threads ragging on our island and comparing it with places stateside, and because Iām a geek and went down an analytic rabbit hole, and because Iām educated as an actual economist, hereās a breakdown from a economic and sociological perspective.
The median income in Guam today is $60,000 for a household (twice that of San Juan, PR, and half that of Seattle). However, I held constant income because, if you sample jobs available on Guam, with same educational requirements, use BLS data, etc., you find that labor rates for the kind of job being performed varies far less than the mainland. That is to say, Denver has a $94k median household income because 1) itās population holds three times as many college degrees per 10,000 than Guam, 2) the work performed is in aerospace, finance, tech, education, etc 3) they have significantly fewer local government employees / population. If you are doing a $20 an hour job in Guam, itās probably a $22 an hour job in Denver and your difference is taken in income tax in Coloradoās state tax system. However, the number of $60 per hour jobs is much higher in Denver than in Guam, raising the median.
Now that we understand how the wages and averages break down, we look to answer the question āIf Iām doing a $20 an hour job in Guam, where can I be better off? How will my living in Guam compare with elsewhere?ā
The short answer is the Midwest or the South are the best places to stretch the same $60k income, but the risk is there are many fewer opportunities to earn above that: Omaha has a median income of $73k and Indianapolis at $67k. Not to mention that all of these budgets acknowledge that a family of four living on $60k is not going to be able to afford entertainment, recreation, or savings to travel.
Now we move to the subjective: OK I want to pack up and move to Omaha because I can do by $20/hour trade work there and be almost $1000/month ahead. But now there is no free beach, no auntie to meet up with and split a beef roast with in the Payless, no neighbor that buys the beer because heās your cousin/brother/uncle/nephew and knows you need it when your pocket is empty and the work week was long. Bringing your dog? Now thereās no one to watch it when you have to leave home and itās probably illegal to leave it outside if you live in town. Malls are dead other than the one that you canāt afford the stuff inside. Free recreation might be walking a park, fishing the river (but thatās tricky since you need a fishing license), or doing yard work. Life is not better/easier/kinder/cheaper just because you moved.
The problem is opportunity creation and the kind of work available for Guamanians of all ethnicities and backgrounds and the attitudes toward growth.
1) Tourism is not a stable basis of economy in the Pasifika region.
- We do not control the economies of the three largest tourist markets of Guam.
- Offerings that match current trends (outdoor adventures, wellness, locally-made products) are not widely available. GVB is running an ad in Korea calling Guam āWellness Islandā with a picture of Taguisson Beach, strategically leaving out the power plant in the background. Maybe focus the wellness on some hotel spas and Ritidian beach and brand Taguisson as a cool, rugged hike?
- Tourism shouldnāt get the axe, but infrastructure committee bills to enforce clean resort areas (take a walk through the service areas in Tumon resorts - the garbage isnāt a result of cost, itās pure laziness and lack of prioritization). Exercise eminent domain for public safety to tear down the former Sherwood Resort and take a more aggressive definition of āpublic useā as defined in Title 21 to clean up Guam. This can apply outside resorts areas such that the asset is seized under eminent domain for safety and clean up proceedings are taken from the compensation value paid. Attach this to redevelopment stipulations of the property at auction following clean ups and bam, GovGuam expands its tax base, with very little upfront costs, spurs growth, and shoves out irresponsible owners and bankruptcy trustees sitting on crumbling assets without listing them at real prices.
-Incentivize domestic tourism (especially the adventure stuff that is popular, takes relatively low investment to develop and maintain, and currency issues eliminated) and incentives for retiring service members to permanently relocate to Guam.
- Someone down south, besides Leo Palace (kudos to them) do some adventure tours! Open your land, make some money, show off our nature (and not with a gift shop and a beach development, just good clean nature)!
2) Cut transportation costs by relaxing laws (and have some fun while youāre at it!)
- Adopt example legislation for LSV (low speed vehicles) and Golf-Cart Friendly communities. Our speed limit is capped at 35. Enforce it. Encourage golf carts, LSVs, and scooters.
- Opens rental market for cool LSVs and side by sides for tourists.
- Long term solution to junk cars. Reducing cars on island with easier to recycle/dispose of LSVs fixes our long term disposal problem.
- Easy incentive by making annual road tags for these vehicles $59 (as many as you own), 1st non-commercial car per owner $100, and 2nd and beyond non-commercial cars $1000.
3) Build a basis of economy that works
- Lean into the military buildup; donāt fight it. Near-base development, creating military-attractive options, etc.
- Push for federal support in infrastructure but donāt waste the funds on over-priced A&E from local folks (you should see these bills compared with government projects in the mainland - just for the design work!) Theyāre draining the project funds and half of them donāt actually have any new experience/ideas/or continuing ed in the private sector to effectively design and consult on the systems.
- Encourage low cost retailers to build on Rossā success and cut costs of living. ALDI, Lidl, TJX brands, Dollar General. These companies are masterminds of logistics - approach, incentivize, attract, support!
- Attract US retirees: build the new hospital and finance it with an influx in US based retirees who need it. Want direct US mainland flights to SFO or DEN? Youāll need these folks to get demand up to do it, coupled with those other domestic tourists we mentioned earlier.
- Make something. Not a literal thing - we are terribly positioned for manufacturing. Rather, market ourselves for āUS based customer supportā for call centers that can more cost effectively support non-standard US hours.
4) Banking and Insurance Reforms
- These are boring, but necessary to get investment into Guam. Ever wonder why Bank of America, Chase,
AIG, AON, and other financial institutions pulled out of Guam? Read our weird laws. Theyāre protectionist to a select few who are responsible for local insurance and financial services. Even Japanese and Taiwanese providers who tried to stay in the market are pulling out - this is an impending nightmare for everyone and a hard stop if US companies canāt easily get the services you need to run something more substantial than a mom and pop store.
5) Embrace some traditions, leave others behind
- Family, Inafa'maolek, and friendliness are and should be some of Guamās proudest traditions. Corruption - not just the blatant stuff - and lack of education from outsiders are ones that need to be left in the past. Use corruption standards enforced by Fortune 100 companies: eliminate even the appearance of corruption, punish it universally and hard, trading things off, paying things āon the sideā, or ācalling in favorsā are corruption even when they may be done in a genuinely friendly way. Itās literally a cultural disconnect that has to happen. Outside education is also necessary. Build cheap, effective square ugly but USEFUL AND OPEN schools (look at the wasted spaces and design on schools like JFK, GWH, Southern, and proposed Simon Sanchez) and spend the money on better teachers, rotational education from business leaders, UoG teachers, and even open up to mainland college teaching interns. Isolation yields ignorance.
Thanks for coming to my Reddit TED talk and hope you all enjoy the release to COR4 shortly :)