UPDATE: Minimum Wage Task Force calls for moratorium and for a Specialized Industry Committee
Pago Pago, AMERICAN SAMOA — In its report, the governor’s appointed Minimum Wage Task Force provided criteria and further explanation on the three options for consideration to address — and among other things — sustainability and economic feasibility pertaining to the federally mandated minimum wage hikes for American Samoa.
The Oct. 23rd report provided three options: status quo, moratorium, and special industry classification - or a local specialized industry committee - SIC. (see Samoa News Nov. 12th edition for details)
To achieve the overall goals of mitigating an economic catastrophe if American Samoa loses the last tuna cannery, the task force said it analyzed each option based on the following “criteria” - sustainability or economic feasibility, affordability, fairness or equality, and self-determination of each policy option.
“By utilizing sensitivity analysis to review the status quo and other options, the historical impact of the federal minimum wage increase since 2007 remains a concern given the vulnerability of American Samoa’s economy,” the report said.
The report explains that the decision to continue with the ‘status quo’ and allowing the minimum wage increases could pose significant threats to the government and private sector with regards to the ability to absorb additional wage costs.
“Faced with budgetary constraints and depleting fish supplies, the government may be forced to reduce hours or layoff while StarKist may consider relocating elsewhere,” said the task force, noting that such “a move could pose adverse and potentially disastrous impacts to the overall economy.”
According to the report, a “moratorium” or temporary exemption from the minimum wage increases may not significantly increase the number of employees in the workforce but would certainly maintain current levels.
It notes that there are public benefits that help the community, especially very low income individuals and households, offset some of the costs. For example, affordable healthcare (medicare and medicaid), housing (affordable home loans & rental assistance programs) and social services (food stamps).
The report notes that allowing for a “local special industry classification or special industry committee” would not automatically increase the number of employees but could provide valuable data and insight from a local vantage point into a recommended course of action.
According to the task force, opting for a status quo or continuation of the minimum wage increases could potentially increase the number of employees that can afford the cost of living. However, until a “feasible cost of living and wage is determined for all impacted employees, there may remain employees still living below the cost of living with respect to various indicators.”
Furthermore, a moratorium on the minimum wage increases would maintain current levels of employees that can or cannot afford the cost of living. On the issue of an SIC, the report notes that the ability for local public and private stakeholders to determine a minimum wage that is feasible for the economy would not directly increase the number of employees that can afford the cost of living but would be a step in the right direction.
This is the same assessment of the three options in discussing “Fairness/Equality”.
Under this assessment, the task force looks at increasing local public-private participation in determining feasible minimum wage. The report says that a status quo option will not allow it. At the same time, federal increases will continue without much participation from stakeholders in the decision making process.
But a moratorium will allow more time for more stakeholders to participate in the decision making processes at the local level, says the report. Additionally, A special industry classification or special industry committee (SIC) “would definitely increase and maximize the opportunity for local stakeholder participation”.
RESULTS & CONCLUSION
• status quo option had negative potential impacts across each of the policy goals with a few positive potential impacts with respect to affordability and fairness;
• moratorium option had positive potential impacts in terms of sustainability/economic feasibility and self-determination with neutral potential impacts with respect to affordability and fairness/equity;
• SIC option had positive potential impacts with respect to self-determination and neutral potential impacts in terms of sustainability/economic feasibility, affordability, and fairness/equality.
According to the report each of the options faced limitations with respect to capturing specific industry data that has been a historical information gap in the community. In conclusion, the task force recommends “a combination of a moratorium option to allow ample time for local private and public stakeholders to further research special industry classifications through its own special industry committees and allow for a thorough assessment and determination of a feasible local minimum wage.”