Thursday, April 2, 2009

Cost of living on Guam

One of the points that Sen. Matt Rector's the Middle Class Job Creation Act of 2009 makes concerns the wage disparity between Guam and Hawaii.

When companies hire foreign workers they typically have to cite the prevailing wage as part of the visa application. Companies are required to pay prevailing wage to keep from undercutting the local workforce. The intent is to supplement the local workforce, not replace it.

But even at prevailing wage, foreign workers can still be paid less. They can be pegged at a lower experience level and may not receive the same benefits of a local worker. Moreover, the visa is tied to their continuing employment -- the ability of a foreign worker to change jobs is limited.

But on the prevailing wage issue, many employers use the Foreign Labor Certification Data Center to determine the prevailing wage for a given location.


I looked at one occupation, construction manager, to see how pay rates differ between Guam and Hawaii in this job category.

Assuming my data is correct, it shows a remarkable difference. For instance, a Level 1 construction manager on Hawaii is paid 84% more than a Level 1 construction manager on Guam. The gap narrows as you move up the experience level, but it is still striking.

If anything, Rector may have understated the wage disparity between Hawaii and Guam.

Guam

OES/SOC Title: Construction Managers
Level 1 Wage: $14.59 hour - $30,347 year
Level 2 Wage: $19.97 hour - $41,538 year
Level 3 Wage: $25.36 hour - $52,749 year
Level 4 Wage: $30.74 hour - $63,939 year
GeoLevel: 1

Hawaii

OES/SOC Title: Construction Managers
Level 1 Wage: $26.85 hour - $55,848 year
Level 2 Wage: $35.45 hour - $73,736 year
Level 3 Wage: $44.06 hour - $91,645 year
Level 4 Wage: $52.66 hour - $109,533 year

Is there a similar cost of living disparity between Guam and Hawaii?

I used the cost of living calculator at
SalaryExpert to get a rough estimate. According to it: If I earned $50,000 a year on Guam I would need to earn $59,560 on Hawaii to have a comparable standard of living as renter, a 19% difference. These percentages may change with salary level, so this example may not be true for all wage levels.

1 comment:

Anonymous said...

I dont understand how people can overlook the numbers. There is an alarming difference between Guam and all the states, especially Hawaii. Look at a cement mason: the Hourly
Mean Wage for hawaii is $28.15/hr and for guam its $12.29/hr. You are correct about the 19% for the difference.