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Economist: Federal financial dependency could increase

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HAGÅTÑA (The Guam Daily Post) — The release of federal stimulus checks on Guam will surely come as a relief for many residents, but the amount — $1,200 per individual, $2,400 for married couples plus an additional $500 per dependent — may not be enough to sustain recipients for long, according to economics professor Roseann Jones.

“No, not at all,” she said.

Jones said no amount of federal relief can provide a fix-all for the financial situation people on island are experiencing.

“So part of it isn’t just that the amount isn’t enough. It’s not enough for what? It’s not enough for the reality we were living under and the bills and obligations that we had. And I’m not sure there is any amount that society could afford to bail that out,” she said.

Jones said Guam has an advantage in that the island is family-oriented and accustomed to pooling resources.

“The power of Guam ... the power of its family and its culture and how it networks. That is one of the things that was broken in the U.S. mainland — families aren’t as together, in physical distance or even relationships. They don’t plan and work together for the families’ economic benefit,” she said.

While the number may look meager, she said, there is a new level of negotiation on financial responsibilities.

“No one could have anticipated the speed and the harshness of this reality. People were being able to fund their future in a way that looked perfectly rational and then one day it is not,” she said. 

The Pandemic Unemployment Assistance program, which the Guam Department of Labor has said will provide $960 a week for 13 weeks and up to about $360 a week for 26 additional weeks, could run out before the need does, Jones said.

“So what happens if the pool of money somehow runs out? Funds are limited, but on the other hand, we would probably grow more dependent on the federal government who has the power to print more money. We would probably be looking for other opportunities to work with the federal government to see some kind of benefit coming to Guam to provide income assistance,” she said, “It becomes an allocation issue, making sure that this pool of money goes to the people that need it but goes equitably in a way we can spread that resource as long as we can.”

She said an unemployment insurance program for Guam was needed long before the Covid-19 pandemic.

“Employees would need to contribute to an unemployment compensation fund. We don’t have that kind of structure here," Jones said. “It is one of the stabilizers we are missing in our own economy.”

The duration of the program is timed to meet the outlook of the crisis, said Jones.

“I don’t think (the federal government) wants to put out a safety net way out into the future. You don’t want to disincentive your future, so if you say you are going to have this for a very long term, you need the American spirit to say we are going to figure out what to do and get inventive and creative,” she said.

 

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