iPacific.com | Samoa | Forum

Author Topic: American Samoa doesn't want minimum wage increases  (Read 3769 times)

0 Members and 1 Guest are viewing this topic.

Tavita Tusitala

  • Administrator
  • Hero Member
  • *****
  • Posts: 292
American Samoa doesn't want minimum wage increases
« on: September 28, 2010, 08:06:07 AM »


With the American Samoa minimum wage scheduled to increase on September 30th, Governor Togiola Tulafono has written to U.S. Senator Jim DeMint (R-SC) to allow Senate action on H.R. 3940 delaying for one year the annual minimum wage increase in American Samoa.

Governor Togiola, in his letter dated September 21, 2010, said the Senate Energy Committee has proposed a one-year delay for the upcoming September 30th annual increase of the minimum wage in American Samoa.

“This temporary delay is intended to secure twelve months to review the problem and devise a response to the catastrophe of losing two-thirds of all private sector jobs in American Samoa,” wrote Governor Togiola. “I personally appeal to your sense of fairness to allow the legislation to proceed through the Senate and delay for one year the increase in minimum wage.”

The following is the official text of Governor Togiola’s letter to Senator Demint:

LETTER TO U.S. Senator Jim DeMint

 

21 September 2010

 

Honorable Jim DeMint

United States Senate

340 Russell Office Building

Washington, D.C. 20510

 

Re: H.R. 3940 Delay of September 30, 2010 Minimum Wage Increase for American Samoa and the Commonwealth of the Northern Mariana Islands

 

Dear Senator DeMint:

On behalf of the people of American Samoa I am appealing to your sense of fairness to allow Senate action on H.R. 3940 delaying for one year the annual minimum wage increase in American Samoa and the Commonwealth of the Northern Mariana Islands (CNMI).

American Samoa’s rate of military enlistment and combat casualties exceeds that of any other part of the country. Yet Congress has often acted inadvertently in ways harmful to the Territory.

American Samoa significantly lags behind the States and the other territories in all economic measurements. American Samoa’s $4,357 per capita income in 2006 was 11% of the national $36,794 average. Its $18,219 median household income in 2006 was 39% of the national $46,326 average. Its $8,041 per capita GDP in 2006 was only 22.8% of the national average. In fact, 13 countries benefitting from U.S. trade and investment preferences under the Caribbean Basin Initiatives, 5 countries under the African Growth and Opportunity Act, two under the Andean Free Trade Agreement, and two under the Central American Free Trade Agreement, have higher per capita GDP than American Samoa. All these statistics happen to be prior to the departure of one of our canneries. Things have worsened since.

 Prior to 2007 Congress established a federal minimum wage rate in American Samoa commensurate with the Territory’s level of development. Under a procedure that had previously applied to Puerto Rico and the Virgin Islands, Congress adjusted the minimum wage in American Samoa administratively every two years so as to reflect the Territory’s economic progress. Such adjustments were economically sustainable. Over time the biennial adjustments raised the minimum wage in the American Samoa as had occurred in the other territories, to eventually match the regular federal rate.

However, in Public Law 110-28, the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act of 2007, Congress increased the regular federal rate nationwide. Reacting to the lack of any minimum wage rate in the Commonwealth of the Northern Mariana Islands, Congress in the same legislation mandated an immediate 50 cent increase in CNMI hourly wages as of July 24, 2007 with an additional 50-cent increase every year thereafter until CNMI wages reached parity with the federal rate.

For American Samoa, Congress applied the same annual increase in place of the existing biennial wage adjustment based on economic development. This annual minimum wage hike for American Samoa was inserted in the rush to enact the larger bill with no evaluation of the impact on the Territory by the committees of jurisdiction – the Senate Energy and Natural Resources Committee and the House Natural Resources Committee.

Congressional lack of knowledge of the Territory is partly due to the fact that the Bureau of Labor Statistics and the Census Bureau do not collect timely economic data on American Samoa. Current data collection provides Congress with details on labor, employer, and household conditions in the 50 states, Puerto Rico, and the Virgin Islands. But the lack of such data collection for American Samoa leaves Congress without the same knowledge for American Samoa.

In response to concerns raised by the American Samoa Government, Congress in the wage legislation provided for an after-the-fact review of the annual mandated increase.

The Department of Labor in 2008 subsequently determined that the economic consequences of the legislation on American Samoa would be grave. The Department illustrated the impact in a telling way. At the relative level of economic development in American Samoa, the mandated wage increase was equivalent to imposing a $16.50 federal minimum wage requirement on the States.

As a result Congress called for another evaluation, this time from the Government Accountability Office. In a report released April 10, 2010, GAO confirmed the Labor Department’s forecast of two years ago. Employment in the Territory, GAO reported, dropped from 2008 to 2009. Employment fell even more with the closure of one cannery in September 2009. GAO further reported that employers have ceased hiring, cut worker benefits, laid off employees, and plan to close or leave the Territory by the end of 2010. (GAO-10-333. pp. 5 & 6.)

As of today, neither Congress nor the Administration has acted on the GAO report to address this legislative fiasco.

Seafood canning and processing at two canneries have been the mainstay of the American Samoa economy. Until last year’s cannery closing, this industry directly and indirectly provided two-thirds of all private sector jobs in American Samoa. As noted by GAO, the largest cannery, Chicken of the Sea, owned by a Thai company, closed in September 2009.

StarKist, the only remaining cannery, owned by a South Korean company, announced plans to reduce its workforce in the Territory by 50% at year’s end. Thus far it has eliminated 500 jobs.The annual wage increase mandated by Congress only compounds the difficulties created by the globalization of U.S. seafood suppliers. Furthermore, in 2002 U.S. tariffs were decreased on pouched tuna from countries under the Andean Free Trade Agreement. In January 2009, tariffs on canned tuna and other tuna products were lifted for countries under the North American Free Trade Agreement. A proposed free trade agreement with Thailand would have the same effect on products from that country. All these countries have far lower wages than American Samoa.
 The Senate Energy Committee proposes a one-year delay for the upcoming September 30th annual increase of the minimum wage in American Samoa and the CNMI. This temporary delay is intended to secure twelve months to review the problem and devise a response to the catastrophe of losing two-thirds of all private sector jobs in American Samoa.

I personally appeal to your fairness to allow the legislation to proceed through the Senate.

Sincerely,

 

Togiola T.A. Tulafono

Governor of American Samoa

 

cc:       Sen. Daniel K. Inouye, U.S. Senator (D-HI)

Lt. Governor Faoa A. Sunia

Hon. Gaoteote P. Tofau, President, AS Senate

Hon. Savali T. Ale, Speaker AS House of Representatives

Hon. Eni Faleomavaega Hunkin, (D-AS) Member of Congress

Tavita Tusitala

  • Administrator
  • Hero Member
  • *****
  • Posts: 292
Minimum wage increases delayed two years
« Reply #1 on: October 08, 2010, 07:54:40 AM »
Minimum wage increases delayed two years for American Samoa
September 30, 2010
U.S. President Barack Obama signed legislation that will delay the minimum wage increase scheduled to take effect in American Samoa for 2010 and 2011.

Governor Togiola said the delay in minimum wage hike, through H.R. 3940, is a much-needed blessing for the Territory.

“We have truly been spared another disaster and this hold on the minimum wage increase, even if it’s for only two years, will allow us time to work with this very important issue,” said Governor Togiola. “I am very grateful to President Obama for his favorable consideration and expeditious action. When I received the great news this afternoon, I breathed a huge sigh of relief, and thanked God for His direction and help. The minimum wage issue has made it impossible to attract investments because of the uncertainty it has created. I truly welcome this two-year suspension, but it is not the ultimate solution we need.”

Governor Togiola said there are so many hardworking and caring people to thank for the wonderful news for American Samoa.

“It is important to give credit where it is due. I want to thank Senator Daniel Inouye of Hawaii for his continuing support of American Samoa and helping to direct our attention to issues that we can address effectively to help our own cause. I wish to also express my thanks to our Congressman Faleomavaega Eni for his role in keeping track of this situation and asking the Senate and the House memberships for this relief. I look forward to our efforts in working with him for a permanent solution to our minimum wage to propose in the future.”

Governor Togiola also thanked U.S. senators and representatives and their respective staffs for their support in the successful passage of this very important federal legislation for American Samoa.

“This great news is also giving me hope that we will be able to work with Congress, on both sides of the aisle, to forge a permanent solution to the wage issues as well as our economic development needs. If we do not have a permanent solution for this issue, it will continue to be a major set back for near future developments. We need a permanent solution that makes sense for us and will help us effect more effective economic development,” said Governor Togiola. “I wish to recognize with gratitude and appreciation the special understanding given to my plea to U.S. Sen. Jim DeMint (R-SC) and his staff. I have never met the senator, but the good relations that my Washington staff have with him and his staff have enabled us to appeal to him for help, and he was gracious in his response and assurances.”

Governor Togiola gave thanks to the White House staff for their support in always being helpful; and also to his attorney and staff in Washington D.C. for the great assistance and diligence in pursuing Congressional help to achieve success in this matter.

“I wish to also thank the Fono for their support and I know that our people here in American Samoa have also been praying for relief, and God has answered us favorably. We give thanks to God for His guiding hand in these endeavors,” said Governor Togiola. “We have truly been spared another disaster, so now we have a lot of work to do in the next two years to ensure that this issue is resolved in the best interest of our people and our businesses.”

Source: American Samoa Government

LermaD

  • Newbie
  • *
  • Posts: 1
Re: American Samoa doesn't want minimum wage increases
« Reply #2 on: January 20, 2014, 11:38:09 PM »
Costco's CEO, in a move unlike most merchants, states he would like to see the federal minimum wage increased to $10.10 an hour. That is even greater than the $9 an hour Obama requested in his State of the Union address.

 


hibiscus iPacific | Samoa | Forum