Gov tasks DOC with finding what is local ‘living wage’
Gov. Lolo Matalasi Moliga has directed the Commerce Department to come up with a “living wage” for American Samoa workers and hopes this data will convince the federal government to halt for American Samoa the federally mandated minimum wage law.
American Samoa’s next minimum wage hike is scheduled for Sept. 30, 2015 and the Lolo Administration, Congressman Faleomavaega Eni and others are out to convince Congress to halt the escalating wage hikes, which were included in a 2007 federal law.
Last week, Faleomavaega's office informed Lolo that the next wage hike is set for 2015 and that the U.S. Government Accountability Office— the investigative arm of the U.S. Congress— is scheduled to release in April this year its report on the impact of the federally mandated wages for America Samoa.
“Based on the GAO findings, Congress will revisit the issue,” Faleomavaega wrote. (A two-member GAO team was in the territory last year to conduct follow up interviews with the government and the private sector for their report)
During his address to the Fono last week Monday, the governor said the Department of Commerce has been instructed to prepare ASG’s justification package requesting Congress to “permanently remove” American Samoa from the automatic application of federal minimum wages.
(The federal application is automatically halted once it reaches the federal minimum wage that currently is $7.25 per hour, however a bill in the U.S. Senate proposed by Tom Harkin (D-IA) would bump the minimum wage to $10.10 an hour and politicians and lobbyists are lining up to fight on both sides of the issue. Samoa News is unaware at this time whether or not the current law has a provision for raising American Samoa’s automatic application when and if a new federal minimum wage goes into effect.)
DOC “ will articulate the Territory’s position to the Congress that the automatic application of federal minimum wages will continue to create economic havoc and severely thwart our struggles to become economically self-sustaining,” Lolo said.
Lolo then revealed that the “centerpiece of our minimum wage justification package is the presentation of a locally developed ‘Living Wage’ based on prevailing economic conditions.” Additionally, determining the “Living Wage” will “allay Congress’s fear that our minimum wage does not afford our people the ability to cover basic living needs.”
According to the governor, DOC has been directed to determine a “Living Wage” for American Samoa by the end of March for examination by all stakeholders prior to finalization and submission to relevant federal agencies and Congress.
“This will provide sufficient time for consideration of our request” prior to the next wage hike, he said.
Responding to Samoa News inquiries for an explanation about a “Living Wage”, DOC director Keniseli Lafaele first pointed out that determination of a 'living wage' in the territory is a work in progress at the DOC.
“Let me start out by stating what it means in developed or 'rich' countries like the US, the United Kingdom, New Zealand or Australia,” he said.
“In these countries, there's a 'revolution' of sorts to nudge governments or employers to pay ‘living wages' rather than adhering to 'minimum wage' laws as the gap between the rich and the poor widens.
“A living wage is one that meets the basic needs to maintain a decent standard of living within a community thus is generally higher than the minimum wage,” he said.
Lafaele pointed out that American Samoa is a US Territory but not in the same economic status as the U.S and the territory has an income, a Gross Domestic Product — per capita— of about $8,000 whereas that of the US is about $50,000 per capita.
“Yet, the territorial minimum wage is tied to the US minimum wage law, something that does not make sense at all,” he emphasized.
“In the governor’s quest to resolve this matter once and for all with the federal government,” said Lafaele, “the governor has tasked DOC to research and arrive at a locally determined living wage that our territorial economy can sustain, yet provide a decent living standard for our people within our communities.”
“We are using data from the 2005 Household Income and Expenditure Survey (HIES), projections, and cost of living [the project],” he said. “A Living wage is estimated to cover at least the bare minimum subsistence wage for an average size American Samoan family and be below the current US minimum wage schedules.”
“Living wage in the American Samoa context is different from what the term is known in 'rich' countries in that we're trying to 'survive' the adverse effects of the minimum wage law of the most powerful and wealthiest country in the world that's being applied to a blip of an economy in the South Pacific,” he said. “Once complete, we will take it out to the community in the form of public hearings.”
BACKGROUND ON LIVING WAGE
The Massachusetts Institute of Technology (MIT) says that in many American communities, families working in low-wage jobs make insufficient income to live locally given the local cost of living. Recently, in a number of high-cost communities, community organizers and citizens have successfully argued that the prevailing wage offered by the public sector and key businesses should reflect a wage rate required to meet minimum standards of living, or the ‘living wage’, according to its website.
MIT also provides the “Living Wage Calculator” to estimate the cost of living in communities and regions - broken down by states and counties (but no territories). For Honolulu, it says the ‘living wage’ for one-adult is $12.91 yet the minimum wage is $7.25 an hour. It explains that the living wage calculation is based on the hourly rate that an individual must earn to support their family, if they are the sole provider and working full-time (2080 hours per year).