Tuesday, October 06, 2009

Life on Guam getting more expensive

Life on Guam getting more expensive

Wednesday, 07 October 2009 03:33 by Jude Lizama | Variety News Staff

AS ALMOST anyone who shops or rents a home or apartment here can tell you, the cost of living on Guam continues to rise as household earnings contract even further. The island’s most recent consumer price index of 106.9 shows a marked increase of 1.4 percent over the second quarter.

In the meantime, the most recent Department of Labor statistics reflect the total number of jobs on Guam declined measurably in the preliminary statistics, as of this summer, as did private sector employment and average weekly hours paid.

The private sector particularly has been significantly affected by reduced visitor arrival numbers.

The latest figure from Bureau of Statistics and Plans found third quarter prices this year reflected less than one percent over the same period last year.

But, much like CPI data from a year ago, the dollar's buying power remains at a dismal 64 cents on the dollar for consumers when compared to conditions for the base year 1996.

However, due to the current global economic crises, there is some, though little, respite in the cost of sheltering a family on Guam. Last year’s growth rates for the second and third quarters reflect an almost identical rate of growth of 2.4 and 2.8 percent, respectively.

However, growth over the last year is minimal at 1.6 percent, especially when compared with the 2007 to 2008 increase of 10.9 percent for rent and lodging expenses on island.

And, then there is the price of gas; it continues to creep up at just under one percent from the preceding quarter, but nearly by three percent when compared to the same period last year. Between the third quarter of ’08 and this year, costs for home fuel and electricity showed a slight decrease, less than a half a percentage point for and 13.2 percent, respectively.

Water, sewer and trash costs pushed higher though, increasing almost 25 percent for rate payers of these services.

According to the DOL website, higher costs of living strained an already precarious situation for workers who have seen their buying power slashed by the increase in expenses and a reduction in earning power.

The DOL June 2009 employment report notes the average weekly hours paid to workers in the hospitality industry, a chief employer on Guam, declined dramatically. Paid hours averaged 31.7 in June, down from 36.4 the same period last year. In percentage terms, hours worked declined 13% in hotels, 7% in retail and 4% for all private industry for the comparable period. Private total average weekly earnings were little changed, however, as higher hourly earnings offset the decline in hours worked.

As Guam’s hospital progresses towards accreditation, solvency will remain an issue as residents are likely to still find it hard to meet the high costs associated with medical care on Guam. Healthcare expenses showed an increase of 3.1 percent when compared to last year’s third quarter index.

While shoppers have by now noticed that cereal products, poultry, and fish and seafood have increased by 3.6, 10.3, and 22.9 percent from one year ago, the index on beef, pork, eggs, dairy products, and fresh fruits actually reflect some relief with drops of 9.0, 11.3, 8.4, and 0.8 percent when compared to the same period in 2008.

Education was a bright spot in the report as communication, educational books and supplies, and computers all showed some easing of inflation, led by computers with a price drop of nearly 18 percent largely due to manufacturers cutting costs in line with conservative spending habits as a result of the financial meltdown of word stock markets.

Other areas that show inflationary creep in the Bureau statistics include tuition and other school fees, and telephone services which rose mildly at less than one half of 1 percent.

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