BY WAYNE CHARGUALAF
The time it takes to gather, analyze and then present data means there is always a time-lag between economic data and the current reality of the economy. Since the governor of Guam ordered the shutdown of various businesses to help slow the spread of the coronavirus, data-gathering for the Guam Department of Labor has practically ground to a stand-still, according to Gary Hiles, chief economist at DOL.
“We don’t have much information yet on how the employers handled [the effects of the coronavirus] because we’re at a stay-at-home status,” Hiles said. “There probably have been some layoffs already, but we don’t have much information about whether the employees have retained the employees in some work status or if they’ve laid them off. We should have more of that information in the future.”
It isn’t just the governor’s March 19 executive order that’s responsible for the lack of data, however. The realities of the coronavirus itself may have impeded key aspects of every organization’s operations. Businesses and agencies are adapting to becoming newly de-centralized as they’ve begun to implement remote or work-at-home policies; operations and staff have been reduced and various agencies and businesses have been completely shut down. Some may never reopen.
Calculating unemployment on Guam is virtually impossible in this environment, due to social-distancing protocols.
“Unemployment is calculated with a survey,” Hiles said. “It’s a combination of personal visits for new households that haven’t been on the survey and follow ups with those that have been included in previous surveys. We were set to begin the March survey, but because of the government shut down and the need to limit social contact, we’ve not proceeded with that at this time.”
Guam DOL also conducts a payroll survey that it presents on its website as the Current Employment Report, which shows the number of employees in various industries throughout the island.
“In the states that have unemployment insurance compensation programs, people that get laid off automatically report to file their claim online, so there’s considerable information on those states,” he said. “In those states, the claims have gone up drastically, so I’m sure it’s the same situation on Guam.”
For now, the best the DOL can do is provide a snapshot of Guam’s economy prior to the arrival of the coronavirus on Guam as well as early indicators of what was to come.
“Before it happened, the economy was doing quite well,” Hiles said. “It was up about 8% in terms of revenues from the prior year at this time with tourism. When the news about the coronavirus started coming out, the arrivals dropped, particularly from South Korea and then from Japan.”
The tourism industry was possibly only the first wave of the coming economic downturn. The governor’s executive order — although necessary to save lives — resulted in an inevitable second wave, according to Hiles.
“One thing that offers some hope is the federal government has implemented some aggressive fiscal and monetary policy,” he said. “The Federal Reserve cut its interest rates to near zero and they’re also trying to pump money into the economy by purchasing $700 billion worth of Treasury bonds and mortgage-backed securities. They’ve also struck a deal with foreign banks such as the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss Central Bank to lower their rates on currency swaps to keep the financial markets functioning normally; so there’s some international coordination.”
Hiles said there is some work being done at DOL on economic projections for the future, but there is no date set for its release.
According to the U.S. Employment and Training Administration, 3.4 million U.S. workers filed for unemployment the week ending March 21.
The Guam Hotel & Restaurant Association has more than 15,000 employees among its 320 members, according to Journal files. mbj