Congressman Faleomavaega Eni is seeking modification to the federal minimum wage law in American Samoa— including a delay in the next wage increase— and he thanks U.S. Rep. George Miller for his willingness to support the modifications.

Miller is chairman of the U.S. House Committee on Education and Labor that has jurisdiction over labor issues.

Last Friday, Faleomavaega wrote to Miller as a follow up to ongoing discussions between himself and Miller’s committee since the release early last month of the U.S. Government Accountability Office (GAO) report on the impact of minimum wage in American Samoa and the Commonwealth of the Northern Mariana Islands.

Current law states that employees in American Samoa are scheduled to reach the federal minimum wage of $7.25 per hour by 2016.

“However, as discussed with your Committee, the GAO report illustrates just how limited American Samoa’s economic options are given the Territory’s over reliance on the tuna fishing and processing industries,” Faleomavaega wrote.

He points out that for more than 50-years, StarKist and Chicken of the Sea served as the backbone of American Samoa’s economy, but in 2006 the two canneries began operating at a $7.5 million loss per year in American Samoa due to a transformational shift in the way the U.S. tuna industry is doing business, “as the GAO report makes clear.”

“In other words, American Samoa’s economy is not collapsing because of minimum wage.  Minimum wage is simply exacerbating a problem that already existed,” he said.

Faleomavaega noted that Bumble Bee and Chicken of the Sea have adopted a new business model of outsourcing the cleaning of fish to low-wage countries like Thailand, Fiji and Papua New Guinea.

Because 90% of labor costs and employment come in the cleaning of the fish, the outsourcing business model maximizes profits and decreases employment in the U.S., while increasing employment in low-wage rate countries, he said adding that this is the reason Bumble Bee and COS employ more workers outside of the U.S. than in the U.S.

And since Sept. 30 last year, COS has closed operations in the territory and outsourced over 2,000 jobs to Thailand where fish cleaners are paid $0.75 cents and less per hour, while employing a skeletal crew of about 200 workers in Lyons, Georgia, he said.

Faleomavaega said StarKist has chosen to clean whole fish in American Samoa and thereby create jobs for the Territory’s workers. “But this has put StarKist at a competitive disadvantage and StarKist cannot hold out much longer in American Samoa, given the unfair trade advantages of Chicken of the Sea and Bumble Bee,” he added.

“Unfortunately,” said Faleomavaega, “the GAO report makes no recommendations about what can be done to help StarKist nor does it offer solutions to make sure that workers in both American Samoa and CNMI receive fair wages to compensate for increases in cost of living.”

“But the GAO report does reaffirm the real need for minimum wage to be modified until such time as American Samoa can stabilize its economy and a plan of action can be put in place,” he said.

Faleomavaega also noted that the American Samoa Economic Advisory Commission - established by the Interior Department - issued a report in 2002 with recommendations on how American Samoa could diversify its economy, but says no recommendations have been implemented yet. 

“However, I thank you for your willingness to support modifications to the law, including a delay in the next minimum wage increase so as to give the American Samoa Government (ASG) the time it needs to put forward a plan of action based on the findings of the American Samoa Economic Advisory Commission,” he wrote.

“Any modifications we make to the law should also call for a thorough review of the some 18 different minimum wage rates in American Samoa which are based on economic development in different sectors,” he said, adding that these varying minimums are a relic of Special Industry Committees “which are now antiquated and discriminatory”.

“Like every other State or Territory, one federal minimum wage rate needs to be established for American Samoa, and I am hopeful that we will collectively work together towards this end,” he said.

Faleomavaega thanked Miller and his committee for working together to draft the “language which we will need to modify the current minimum wage law as it pertains to American Samoa and to find an appropriate legislative vehicle to move it forward prior to September.”

This year’s minimum wage hike is scheduled to go into effect on Sept. 30.

“Given the urgency of this request, I have copied [U.S] Senator [Daniel] Inouye so that he can be fully informed of our efforts in the House and better positioned to assist us in inserting language on the Senate side, if necessary,” said Faleomavaega.

Copies of the letter were also forwarded to U.S. Rep. Nick J. Rahall II, chairman of the House Committee on Natural Resources, U.S. Secretary of the Interior Ken Salazar, Governor Togiola Tulafono, Lt. Gov. Faoa A. Sunia and the Fono.