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Surviving on Guam: the Economy

    Guam's economy is based on three main industries: tourism, the military, and employment in a Government of Guam agency. That last includes the courts, the utilities, the schools, the police, the hospital, the university, and many others, so you can begin to imagine how big the government is.
   We just were told that unemployment is up to 15% here on island, and some people are saying that that's a low estimate. In March 2008, Standard and Poor's lowered Guam's bond rating to a BB , which is below investment grade.
 There are four main problems. (1) Tourism is 'way down because of the Asian economic crisis. Japanese and Korean tourists have been the backbone of the tourism industry here, and now they can't afford to come. (2) Military spending is down here as it is everywhere in the United States, and several of our bases have closed. (3) The government is continuing to spend money as if it still has plenty, except on education, which has borne the brunt of the budget cuts. (4) The GovGuam retirement system, which is used by most GovGuam employees instead of Social Security, eats up a vast amount of Guam's income.
The good news is that there is a military build-up that is expected to begin in 2011 to 2015. The projected number of military personal is expected at 20,000 to 40,000. The exact figure is unclear because the amount includes military dependents and their families. The amount of money for the project is estimated to be in the billions and the effect on the economy will put and end to the depression on Guam's economy.
   In 2010, the Guam Legislature imposed a hiring freeze on GovGuam, coupled with an incentive-to-retire program. This caused a vast migration out of GovGuam of many vital workers, coupled with the inability to replace them, and created open war between the Legislature and the former Governor Camacho, who wanted to be able to hand out patronage to his supporters. The hiring freeze was lifted for nurses, teachers, and other essential personnel, and frayed in other agencies as well. In 2010, as revenue shortfalls continued and conditions have become more severe, the Governor proposed a 10% across-the-board pay cut for all GovGuam employees, and when the measure failed, a layoff of government workers began. 
During the first quarter of 2007, individuals were declaring bankruptcy at an unprecedented rate.

    If you are living on Guam and you do have a job, the main problem you encounter is the staggeringly high cost of living on island. The good news is that it isn't as bad as it was a few years ago.

 

So many people are leaving Guam now that rental and real estate prices are dropping steadily.

    The prices of gas, groceries, and utilities continue to rise, however.

    If you are looking for a job on Guam, you might want to check out classifieds at the Pacific Daily News website, and look on Trader Horn Online. Also check out www.jobsonguam.com.


by Brenna Lorenz and Mike Pulte.


 
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