PAGO PAGO, American Samoa – Congress passed a bill this week to freeze American Samoa's minimum wage, responding to employer concerns and a government financial report that suggest automatic increases were harming the U.S. territory's economy.
American Samoa's minimum pay was set to increase by 50 cents in September, but that now stands to be delayed until 2015.
Minimum wage in American Samoa varies from $4.18 to $5.59 per hour, depending on the industry. The lowest wage is for garment workers and the highest is for those in the shipping industry. Tuna canneries make up the largest private employer, where the rate is $4.76.
The Fair Minimum Wage Act of 2007 provided for annual 50-cents per hour increases until the rate matched the rest of the U.S., where the minimum pay is $7.25 per hour.
Increases for 2010 and 2011 were previously delayed by another federal law. The last increase went into effect in 2009, the day after a tsunami killed 34 people in the territory and the same day a tuna cannery shut down.
The issue of pay has been the focus of an ongoing debate in the territory where a communal land system allows many people to live rent-free with their families. A majority of American Samoa land is communally owned by families. But everyday household items need to be shipped to the island, making them much more expensive than in most parts of the U.S.
A report last year by the U.S. Government Accountability Office said employment in American Samoa has declined because of the minimum wage increases that began in 2007. The 142-page report said the decrease in employment was a result of losing a tuna cannery in American Samoa. Employers blamed the minimum wage increase for layoffs, work hour reductions and hiring freezes.
America Samoa's nonvoting delegate in the U.S. House of Representatives, Eni H. Faleomavaega, said the Senate bill was overwhelmingly approved Tuesday, 378-11.
While he supported it, "I take no happiness in the successful passage of this bill because I still stand for fair wages for American Samoa's workers," he said. "So between now and 2015, it will be up to the American Samoa government and our corporate partners, including StarKist and Tri-Marine, to find new ways of succeeding without further compromising the wages of our fish cleaners because I cannot promise that I will support any more delays after this."
The measure now goes to the president, who is expected to sign it.
Three years ago, StarKist Co. announced the reduction of some 800 positions at StarKist Samoa, citing a competitive industry and higher labor costs. Spokeswoman Mary Sestric said the company is hopeful Congress will again delay the next scheduled increase.
StarKist workers on a morning shift Wednesday declined to comment on the delay.
American Samoa Gov. Togiola Tulafono has said the 2009 cannery closure led to unemployment reaching nearly 20 percent by 2010.
"Congress is to be thanked for preventing further economic calamity in American Samoa and preventing continual increases to the minimum wage which would have led to additional layoffs in our fragile economy," said local Chamber of Commerce Chairman David Robinson.