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Interior asks for further study on minimum wage alternatives for American Samoa

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Additional research and information would be beneficial, says Domenech

Pago Pago, AMERICAN SAMOA — The US Department of Interior has recommended that the investigative arm of the US Congress conduct further study on potential alternatives, including the use of a committee, to set minimum wage for American Samoa.

The recommendation was made by Interior Assistant Secretary for Insular and International Affairs, Douglas Domenech in his comment letter included in the US Government Accountability Office (GA) final report released last Thursday on American Samoa’s minimum wage review.

The comment letter was based on the draft report GAO provided to USDOI for comments before it was made final and submitted to US congressional members, as mandated by federal law for a review of the territory’s minimum wage.

Domenech noted the GAO’s 2016 report — American Samoa: Alternatives for Raising Minimum Wages to Keep Pace with the Cost of Living and Reach the Federal Level. The 2016 report dealt with alternatives in American Samoa, recognizing the unique economic challenges and cost of living.

Domenech points out that OIA noted in 2016 that much more research and study are required to ascertain the full range of benefits and costs of the various alternatives.

It “would be beneficial to ASG if the draft 2020 report contained additional research and information on all potential alternatives, including the once-utilized Special Industry Committee,” wrote Domenech — referring to the federally appointed committee used years ago to set local minimum wage and also an option suggested by ASG.

(See yesterday’s Samoa News edition on the governor’s response to the GAO 2020 report.)

In the final 2020 report, GAO responded that such a study was beyond the scope of this 2020 report, which focused on: economic trends including changes in employment and earnings since the minimum wage increases in American Samoa begun in 2007; the status of the tuna canning industry; and stakeholder views on the minimum wage increases.

At the outset of his letter, Domenech said that the 2020 report correctly notes the unique economic challenges faced by American Samoa, a remote territory in the South Pacific, with limited resources to sustain a population of approximately 58,000.

He also noted that the fish canning and processing is the largest private-sector employer in the territory even after cannery closures have taken place, while ASG is the largest employer in the territory and relies heavily on federal financial assistance.

In the 2020 report, GAO does note that the federal government provides assistance to the American Samoa government, including funding the majority of its revenue.

For example, in fiscal year 2018, ASG’s financial audit reported that federal grants provided approximately $150 million of $246 million in total American Samoa government revenue.

Ranked by approximate grant expenditures, GAO said the largest federal grantors were the Departments of Health and Human Services ($43 million), Agriculture ($33 million), Interior ($30 million), Education ($28 million), Transportation ($18 million), and Homeland Security ($5 million).