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Obama's call for wage hike needs serious local debate

U.S. President Barack Obama’s proposal to increase the federal minimum wage to $9 per hour should “serve as a reminder” to territorial leaders who need to debate and discuss this important matter, says Congressman Faleomavaega Eni.


Obama’s proposal was made Tuesday night in his State of the Union Address in Washington D.C. before a joint session of the U.S. Congress. The President proposed the minimum wage hike, tying future increases to inflation. Current federal minimum wage is $7.25 per hour.


It was Tuesday afternoon when Obama’s address was aired live in the territory and Samoa News immediately asked Faleomavaega for his reaction and comments to the proposal — and how this will impact American Samoa, whose next 50 cent per hour wage hike is delayed until 2015.


“President Obama’s comment concerning the minimum wage... should serve as a reminder to our leaders in the territory that this issue is not to be taken lightly for discussion and serious debate and it needs to be addressed now by our territorial leaders,” Faleomavaega told Samoa News.


Faleomavaega said he “personally “discussed this matter recently with Gov. Lolo Matalasi Moliga and Senate President Gaoteote Tofau Palaie and House Speaker Savali Talavou Ale when he was in the territory more than a week ago.


“I hope that in the coming weeks there will be some kind of special task force established in the territory to review and offer recommendations to improve our laws on immigration, taxes, corporate/business licensing, duties and customs collections etc. — all in an effort to get a better picture on the health of our territory's economy,” he said via e-mail from Washington D.C. on Wednesday night.


In his State of the Territory address last month, Lolo announced that he will appoint a task force to focus its attention on preparing a comprehensive justification package to petition the U.S. Congress through Faleomavaega  “to settle the minimum wage issue once and for all by reverting to the traditional practice of reviewing our minimum wage, with control granted to American Samoa.”


The automatic minimum wage hikes are "a disincentive and a deterrent to American Samoa’s efforts connected with the attraction of foreign investment,” said Lolo.


Prior to the 2007 federal law mandate minimum wage hikes for American Samoa, a federal industry committee appointed by the U.S. Secretary of Labor would review local wages based on local economic conditions and make proper recommendations to the Secretary.


Lolo also stated his plans to set up a task force to prepare an Economic Development Implementation Plan (EDIP) containing practical and feasible economic development projects to be implemented by the American Samoa Government in the next four years. The EDIP will also be submitted to Congress.


Faleomavaega told Samoa News that “without a doubt, over the years the issue of minimum wage in our territory has been one of mixed feelings, frustrations and outright anger among our workers — both private and public sectors — and our business community.”


“Last year, we were able to amend federal law to delay the increase of the federal minimum wage  for a period of three years. It is critically important for ASG to seriously address the current situation with our economy, and changes that need to be made now so that by 2015, we will see improvements for economic growth and as the cost of living increases, so should the minimum wage,” he said.


Faleomavaega says another key issue that “really needs to be addressed is to resolve the problem of why, to my knowledge, our territory is the only jurisdiction in the United States that currently has 18 minimum wages.”


American Samoa’s different minimum wage levels are due to the fact that it has 18 different types of industries. For example, the minimum wage for the largest employer in the territory, the cannery, is $4.76, while the government’s minimum wage is $4.41 per hour.


The congressman also says that he commends Lolo for his appointment of Keniseli Lafaele as the new director of the local Department of Commerce.


“As an economist by profession, I believe Keniseli’s knowledge and understanding of economic issues will provide greater focus on how ASG is going to address the serious problems confronting our economy,” he said.


“Although I am not an economist, I do believe an accurate assessment on the cost of living conditions of our territory will definitely have a bearing on whether or not we should increase our minimum wage three years from now,” he said.


“And other economic indicators like standard of living, the consumer price index, gross national product, annual per capita income etc. — are all important factors that must be assessed accurately, if we are going to get a better picture of the status of our economy,” he noted.