Tuesday, December 01, 2009

Military Buildup to Raise Cost of Living on Guam

Military Buildup to Raise Cost of Living on Guam

Guam - While conducting the Draft Environmental Impact Statement the military also conducted a stand alone study on the socio-economic impact of the military buildup.

This study estimates an increasing cost of living while wages stay low.

In addition to studying the various environmental effects of the proposed military buildup on Guam the military also conducted a study on the various impacts the buildup will have on the economy and the society as a whole.

Tremendous impacts are expected to both the economy and the society due to the drastic increase in population. DOD has estimated that this population boom will reach it's peak in 2014 when over 79 thousand new people will be living on Guam. This increase however won't remain as people will leave when the construction boom winds down. DOD estimates the amount of new people on island to decline to around 30 to 33 thousand. The study reports that this rapid growth and decline in the population construction and the economy will cause what's known as a "boomtown effect".

This according to the report can result in a recession like period when the construction boom ends. One of the biggest impacts however will be the increase to the cost of living on Guam. The D.E.I.S. states that "Guam workers will likely continue to see the cost of goods and services rise faster than their incomes." This is not something new. According to the D.E.I.S. from 2000-2008 guam workers have seen their standard of living or purchasing power decline by 30%. The buildup according to the D.E.I.S. won't reverse this trend. It will however slow the rate of decline in the standard of living by providing for more jobs and an increase in average wages. This increase in wages however is primarily focussed in the areas of construction and civilian military workers. The report states that those with the ability to quickly renegotiate their wages will have a better chance at maintaining or increasing their standard of living.

As for households living on fixed incomes they will have reduced purchasing power and thus a lower standard of living.

Most civilian military jobs would likely go to either the spouses of new active duty personnel or to labor brought in from off-island. Only about 25% of civilian military jobs are expected to be filled by current guam residents.

Overall the cost of living will increase. Only those who are able to get jobs in construction, civilian military positions, and those who are in a position to negotiate their wages should be able to keep up with rising costs. As for the rest they will likely continue to see their purchasing power decline.

Written by :
Clynt Ridgell

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