Defense Authorization Amendments Would Shut Guam Businesses Out Of The Island's Military Buildup

By John Dela Rosa

GUAM - In the recently approved 2010 National Defense Authorization Act, the House Armed Services Committee adopted strict labor requirements that are good for America, but bad for Guam.

The House Armed Services Committee passed amendments made by Hawaii Congressman Neil Abercrombie (D) that on the surface are easy to understand. The Congressman’s intent to ensure that American projects benefit Americans is admirable. His vehement insistence that Americans should not take a second-seat to Japanese companies in the Guam Buildup strikes the right chord.

Yet, however noble his intent, Mr. Abercrombie’s amendments will potentially shut Guam’s contractors out of the running to secure military buildup work and will reduce the amount of money Guam will receive to train our local workforce for highly skilled jobs.

Two specific amendments are troubling for Guam:

• The minimum wage standard for all construction workers on Guam will be at the prevailing wage level for similar construction projects in Hawaii.
• Foreign workers will be allowed to do no more than 30% of the work on the project.

Setting Guam’s prevailing wage at Hawaii standards will significantly increase the cost of construction on Guam. Our isolation already presents costing challenges, as all supplies and much of the labor must be imported. Adding the increased wage requirement is certain to increase the cost of projects and likely make it more difficult for local small contractors to participate in any of the federally funded construction projects.

Using the prevailing wage methodology for common construction occupations in Hawaii, the Prevailing Wage for Carpenters is estimated at $26.84 and Cement Masons at $25.75.
Current Guam Prevailing Wage rates for Carpenters is $13.56 and for Cement Masons it is $12.87. The Abercrombie amendment would effectively double the prevailing wage for construction work on Guam.

Of this amendment, Abercrombie said, “This is a huge opportunity to put Americans to work, in an American territory, building an American military base. My amendments provide clear guidelines to manage the buildup while ensuring quality work for our service members and their families.”

Yet, the Americans on Guam seem to be left out of this equation. American Territory, yes. American’s on Guam put to work… maybe not. Increasing the price of labor will put many of Guam’s contractors out of the running for military work, and quite possibly out of business.

As for his amendment limiting foreign workers to only 30% of the work done behind the fence, there appears to be no rhyme or reason for restricting the make up of the workforce. If the prevailing wage is established at the Hawaii level, American contractors will likely look to stateside labor first. Yet, Guam contractors will be forging into unfamiliar territory as our record for foreign labor is long, but it is also solid.

“At a time when a depressed economy has dealt a body blow to our construction industry, the Department of Defense should not even consider turning over badly needed jobs to foreign workers at questionable wages,” Abercrombie explained.

But Abercrombie's statement overlooks the benefits Guam's Americans derive from the island's foreign labor laws. Foreign labor fees are $1,000 per worker. The funds collected make up the Manpower Development Fund (MDF), which is used to train Guam’s local workforce in highly skilled jobs.

*The projected breakdown of labor needs for the military construction projects are:

2010  -   2,700 workers

2011 -   7,200 workers

2012  - 12,200 - 15,000 workers
2013  - 14,700 - 15,400 workers
2014  - 15,000 - 15,400 workers
2015  - 10,400 - 3,200 workers
2016 -   2,000 workers

Over a seven-year period, Guam would potentially host 60,900 off-island laborers. If allowed to recruit foreign laborers, Guam could gain as much as $60,900,000 for local workforce development. However, capping foreign worker participation drastically reduces Guam’s potential foreign labor pool to 18,270, which means Guam will only receive $18,270,000 in training funds over the seven years. Guam stands to lose up to $42,630,000 in training money.

Depleting the MDF by $42,630,000 will leave Guam’s local workforce unprepared to compete for the career opportunities that will come after construction. So while Mr. Abercrombie’s amendment would be a shot in the arm for mainland and Hawaii unemployment, it will be a shot in the head for Guam’s local workforce. And when all the construction work is complete, US mainland construction workers are packed up and gone, only Guam’s residents will be left with tremendous opportunities and no skills to take advantage of those opportunities.

The Defense Authorization Act of 2010 is now out of the House Armed Services Committee. But it still has a ways to go in the Congressional budget process. It remains to be seen if these amendments will stay in the bill or if they will be removed.

The loyal Americans in this patriotic American territory look with hope to Congress to make the Guam Buildup good for Guam as well as America.

Jeff Marchesseault contributed to this story.

Read the official media release from the U.S. House of Representatives, 2010 National Defense Bill Includes Abercrombie Provisions for Guam Buildup, June 17, 2009.

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