ASG takes strong position on costs of decisions made in D.C.

Pago Pago, AMERICAN SAMOA — American Samoa raised its minimum wage once again on September 30, 2018, marking the 5th federally-imposed increase since the passage of the 2007 Fair Minimum Wage Act. Per the Act, American Samoa’s minimum wage will reach that of the current Federal minimum wage by 2036.

 “The intent of the Act is well understood locally, however, once again we face the consequences of decisions made in faraway D.C. with no consideration given to local conditions” said American Samoa Governor Lolo Matalasi Moliga on the latest round of minimum wage increases. 

Governor Lolo further stated, “Our insular economy does not compare to economies in the continental United States. Further, our economy also differs a great deal from our brothers and sisters in the other Pacific U.S. Territories of Guam and CNMI, specifically in that their location and proximity to Japan, China, Korea and other Asian countries greatly supports their tourism industry. They are also seeing an infusion of funds into their economy due to the military buildup and relocation from Japan.

“Saipan’s economic growth in 2017 in terms of real GDP was 25.1% after increasing 28.2% in 2016, a stark contrast from what we are experiencing here. As such, special considerations must be made before making decisions, or enforcing poor decisions, that can ultimately decimate our economy and eventually our territory.”

 “After a complete and thorough economic analysis, including the 2016 GAO report on this matter, and having lived through the past five increases, we can no longer remain silent nor tolerate inaction on this very critical matter.

Our primary private sector employer, StarKist, cannot sustain further increases to the minimum wage. We continue to lose our competitive advantage every time we take a forced increase. A StarKist closure will spell an economic disaster for American Samoa, leaving us no choice but to rely even more so on the U.S. to help our people survive, let alone thrive.

“This is the exact opposite of self-reliance and our goal of ultimately being able to stand on our own two feet as a people.” said Governor Lolo. “We’ve seen first-hand the impact these increases have on our economy. The 2015 increase to our minimum wage eventually forced the closure of Samoa Tuna Processors in 2016, leading to doubling of the unemployment rate in 2017, from 10.5% to 21.5%.

“We also saw our GDP drop a whopping 5.3% in 2017 after having already decreased 2.7% in 2016. Prior to STP closing, the closure of COS Samoa Packing in 2009, which was directly attributed to these minimum wage increases, cost us over 2,000 direct jobs and hundreds more indirect jobs. We cannot stand by and watch our people continue to lose their livelihoods.” 

“Ultimately, what we would like to see happen is that the authority or control of our minimum wage be returned to local decision makers, with representation from public, private, and labor groups.” said Governor Lolo.  “We are open to oversight or participation by DOI as we had in place previously,” continued the Governor.

The Minimum Wage Task Force report developed by the American Samoa Government can be found at https://www.dol.gov/whd/minwage/AmericanSamoa/ASminwage.htm .

The 2016 GAO report can also be viewed at http://doc.as.gov/research-and-statistics/reports/.

For more information on these reports, please contact the Department of Commerce at 633-5155 or by emailing [email protected].