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Impact of new minimum wage increase on StarKist still to be seen

StarKist canning plant
Workers say, “Better to have a job to feed our family than no job at all.”

Pago Pago, AMERICAN SAMOA — While StarKist Inc., the US-based owner of StarKist Samoa in Atu’u, has offered no comments on the immediate effect of the new minimum wage increase, the company notes that, historically, past increases have impacted its overall operations.

The new 40-cent per hour federally mandated minimum wage hike for all 17 different industry sectors in American Samoa, went into effect Sept. 30, 2018. Many in the private sector, as well as senior government officials remain concerned over the impact the continued increases will have on the canneries — including the can manufacturing plant in Satala — which now has a minimum wage of $5.56 an hour.

Asked how many StarKist Samoa employees are affected by the new minimum wage hike, StarKist corporate spokesperson Michelle Faist told Samoa News yesterday that, “as a policy, we don’t share specific details about employee wages.”

As to other Samoa News inquiries, Faist provided a StarKist statement, in which the company said, “We cannot comment on the immediate effect this wage increase will have on our business, but minimum wage has historically had a negative impact on our overall operations.”

“As the longest and largest private-sector employer in the American Samoa economy, StarKist has seen, first hand, the negative impact of inflationary wage increases and the resulting decline in the local economy,” the statement says.

“Downward trends in employment continue, thanks to previous minimum wage increases, including a 44% minimum wage increase for tuna canning industry workers in 2007,” the company points out.

As a result of the federally mandated increase at the time, Chicken of the Sea International closed in September 2009 its Samoa Packing cannery plant at Atu’u, the statement notes.

“And in 2016, we saw the end of Tri Marine International’s attempt to reinvigorate its Samoa Tuna Processors plant, which is now closed,” StarKist continued.

Closure of Samoa Tuna Processors came a year after the last 40-cent per hour minimum wage hike was implemented on Sept. 30, 2015.

While some of the cannery workers, who were reluctant to speak with Samoa News, are grateful for the new wage hike, they remain concerned with the security of their jobs, if the cannery makes any drastic cut backs on the workforce or working hours, or worse - closure of operations due to higher expenditures.

Three of the workers also shared what they said is the same message that has been echoed by other workers: “Better to have a job to feed our family than no job at all.”

The US Government Accountability Office report in 2014 regarding the impact of minimum wage hikes for American Samoa noted that StarKist workers who participated in its discussion group generally opposed further minimum wage increases rather than supporting future increases.

Additionally, workers expressed concerns that any increase would result in lost jobs or a closure of the cannery. Some workers, who spoke with the GAO, also expressed concerns that future increases in the minimum wage would lead to an increase in prices in American Samoa, which they said occurred as a result of previous minimum wage increases, according to the report.

In its 2016 minimum wage report, the GAO said the canning industry faces a number of challenges, including rising labor costs, decreased access to fisheries, and erosion of preferential trade status. For the ASG, the government sees minimum wage increases to be in conflict with sustainable economic development.

Meanwhile, Commerce Department director, Keniseli Lafaele, chairman of the Minimum Wage Assessment Working Group, says the group’s report on the financial impact of the new minimum wage hike is currently being reviewed by the Governor’s Office.

“And in due course the final approved report will be released by the Governor's Office,” Lafaele said yesterday in response to Samoa News inquiries on the report.

Gov. Lolo Matalasi Moliga is currently in Honolulu attending several meetings and Samoa News understands he will be briefed on the report when he returns to the territory.