Lolo appoints 10-member Min Wage Assessment Working Group
Pago Page, AMERICAN SAMOA — To determine the financial and economic impact of the next federally mandated minimum wage hike, Gov. Lolo Matalasi Moliga has appointed a 10-member Minimum Wage Assessment Working Group to provide a report for review.
As previously reported by Samoa News, the next minimum wage hike of 40-cents per hour is effective Sept. 30th this year for all 17-different industries in American Samoa. The last 40-cent wage hike was three years ago, according to federal law passed in 2015.
In a Sept. 5th memorandum appointing the working group, Lolo noted the decline of American Samoa’s Gross Domestic Product (GDP) for two straight years — decreased by 5.3% in 2017 after decreasing 2.7% in 2016.
(The GDP report was released Aug. 24th by the Bureau of Economic Analysis (BEA) of the US Department of Commerce. See Samoa News Sept. 4, 2018 edition for details of the BEA report).
According to the governor, the “main contributor to this downward slide” in the GDP is the closure of COS Samoa Packing in September 2009 and Samoa Tuna Process Inc., cannery in December 2016.
He said the local economy has never recovered “from these two disastrous economic events.”
According to the governor, the territory’s economic outlook “is bleak” given the current challenges mounting against the remaining cannery, and…. these challenges are “federally induced because of its stifling policies”.
“The most critical and imminent” is the next 40-cent per hour federal minimum wage hike for all industries, he said.
“To determine the financial impact” of the next wage hike, the governor appointed the working group’s members, made up of officials from seven ASG entities, two from the Governor’s Fishery Task Force, and Paul Young of the Governor’s Office.
“Given the urgency of this matter, the report should be completed within 30 days of this letter,” said Lolo, who appointed the Commerce director as chair of the group.
Current minimum wage for the canneries — the largest private employer in the territory — is $5.16 per hour, and with the upcoming 40-cent hike increases the rate to $5.56 per hour. The canneries include Talofa System Inc., the can manufacturing plant in Satala that employs more than 200 workers, while StarKist Samoa’s workforce is 2,400.
The American Samoa Government, the largest employer in the territory, falls under the ‘Government Employees Industry', where the current minimum wage is $4.81 per hour. Come Sept. 30th the minimum wage for this industry will be $5.21 per hour.
Government officials tell Samoa News that the fiscal year 2019 budget proposal includes the pending minimum wage hike for affected employees. It’s unclear how many in government — which includes all ASG semi autonomous agencies — are paid at the minimum wage level.
The highest minimum wage industry in the territory is “Stevedoring, Lighterage and Maritime Shipping Agency Activities” at the current rate of $5.99 per hour, while the lowest minimum wage is $4.58 in garment manufacturing.
US Department of Labor’s Wage and Hour Division provides the minimum wage poster for America Samoa [www.dot.gov/whd] and other information.
As American Samoa minimum wage increases continue, they will affect a growing percentage of workers in the territory’s tuna canning industry, according to the December 2018, US Government Accountability Office (GAO) report, mandated by Congress,
American Samoa employers’ responses to GAO questionnaire regarding workers’ wages as of January 2016 indicate that the scheduled increase of the industry’s minimum wage to $5.56 in September 2018 would affect 91% of the canning industry hourly workers, who currently earn that amount or less, according to GAO.
Future minimum wage increases would affect the wages of 93% of current cannery hourly workers when the industry’s minimum wage reaches $5.96 in September 2021 and would affect 98% of current canning industry hourly workers when it reaches $7.25 in 2033.
“By 2033, the extra annual cost added by minimum wage increases after January 2016 would be approximately $4,027 per worker,” it says.
Based on the 2015 law, minimum wage for American Samoa will continue to increase by 40-cents every three years until it reaches the current federal rate of $7.25.