Does current economic census data provide the true picture of the territory’s economy?

Pago Pago, AMERICAN SAMOA — ASG Commerce Department officials have suggested that the US Census Bureau include American Samoa under the federal agency’s economic census for non-pay employers, which currently covers only US states.

There’s “a program from the Economic Census... called non-employer statistics. It’s gathering administrative records of businesses that don’t have paid employees. This is just for stateside,” said Robert Nusz, the Economic Census Assistant Survey Director Staff Chief of the US Census Bureau’s Economy-Wide Statistics Division.

Nusz provided the explanation at last Wednesday’s briefing where he gave an overall look at the outcome of the American Samoa 2017 Economic Census, with just over $1 billion in total sales generated from more than 500 business establishments in the territory.

Nusz said the economic census results cover only businesses with paid employees, and  includes stateside and all island areas.

Responding to Samoa News questions, Nusz said only employers who report and pay its payroll to the US Internal Revenue Service (IRS) are counted in the economic census. (See Samoa News Jan. 30th edition for details)

Samoa News told Nusz that the “data doesn’t make sense if these businesses are not covered” and the data doesn’t provide the true picture of the territory’s economy, as there are also businesses which — as rumored — pay their employees in cash.

DOC chief statistician Meleisea Vai Filiga, who was among senior DOC officials at the briefing, pointed out that the economic census is based on those who have reported payroll to the IRS. “So I know where you’re coming from, and I know there’s a lot of activities going on that are not reported, but there is no way the Census Bureau will be able to include those, because they don’t report to the IRS,” he said, adding to Nusz’s response to Samoa News questions.

And “at the same time, there is no mechanism in place for the Census Bureau and [ASG] Commerce Department, as well as the [ASG] Tax Office to make sure all those businesses — who don’t report to the IRS for whatever reasons, but have payroll — be included in the economic census,” he continued. “I think that’s missing from our process because there’s no mechanism in place... to look into this situation to make sure that whoever has employees, they should be included in the economic census,” said Meleisea, who is also the local Census Area Manager for the American Samoa 2020 Census population count.

DOC economic development division manager, Alex Zodiacal offered additional information, saying they have been working with the ASG Tax Office to implement the employment identification number (EIN) over the last three years.

He said all businesses are now required — regardless of whether its a sole proprietorship — to apply for an EIN, and his staff helps businesses applying for an EIN online.

For the business license “renewal process this year, all businesses have to have clearance first, with the Tax Office. And that is where the control is — with their EIN,” he added.

BUSINESS LOCATIONS

According to the summary data, of the 511 businesses in American Samoa in 2017- 366 were in the Eastern District and 143 in the Western District, while the Manu’a District was not counted.

That means 70% of business establishments were located in the Eastern District,  Meleisea said, and asked how the economic census came up with the “geography” to make such an identification, and whether the federal agency used a specific coding method. “Because a lot of the population is in the Western District and so are a lot of businesses,” he added.

Nusz explained that the method used is “coded with Census Bureau geographic quoting system”, but “we [also] just kind of rely on what they report to us” — the businesses who respond to the questionnaire. Nusz said the economic census doesn’t have a way to verify what the business establishments say when it comes to location.

There was a lot of discussions between DOC officials and Nusz on this issue — on possible ways to confirm where businesses are located. Nusz notes that if a company has two  locations, they should be reporting them separately, meaning the company should complete two separate questionnaires. “We’re given a file from our Geography Division” used for this process, he explained, but “we may need to look into more ways of getting the geography information and the coding.”

Meleisea said this is “important because usually the community and businesses use Pago Pago as their main location description for the address. So if that shows up, and used as a classification of the geography [location], then it becomes a problem.”

“Even if the business is in Leone village but the address is Pago Pago. And this could be the reason for the higher number of businesses in the Eastern side,” he said, adding that Pago Pago is the city used as a postal address description, rather than a physical location.

Nusz responded, “We don’t have any real way” of verifying the information “other then asking them the address information.”

Another DOC official suggested asking in the questionnaire the village location of the business establishment — not the actual mailing address, which is Pago Pago, located in the Eastern District. Nusz said “If we were to try to counteract that” — going through the process of verifying the business establishment location — “we have to devote resources, trying to figure that out, but we don’t have a lot of resources as it is.”

Economic census data from the Census Bureau online (data.census.gov).