US Senate Panel Favors Suspension Of American Samoa Wage Hikeff

The chairman of the U.S. Senate Committee on Energy and Natural Resources and three other lawmakers have agreed to endorse a delay in the 50-cent wage increase this May for American Samoa and the Northern Marianas.

Bill Wicker, communications director of the committee, said Chairman Jeff Bingaman, D-N.M., Hawaii Democratic Sens. Daniel Akaka and Daniel Inouye as well as American Samoa Congressman Eni F.H. Faleomavaega are supporting a change in the federal law mandating yearly wage hikes in the two insular areas.

”The chairman and Senators Akaka and Inouye are supporting an amendment to change the automatic 50-cent annual minimum wage increase,” Wicker said.

The lawmakers have already written Senate President Pro Tempore Robert C. Byrd, chairman of the U.S. Senate Committee on Appropriations, to include their suggested changes in the U.S. 2008 Supplemental Appropriations.

”Because the next automatic increase is scheduled to occur on May 25, 2008, time is of the essence and we ask that you include the attached amendment in the 2008 Supplemental Appropriations Act,” the lawmakers told Byrd, D-W.V.

”This amendment to P.L. 110-28 would delay the minimum wage increases from every year to every two years, and would make the increases contingent on a determination by the secretary of labor that the increase will not substantially curtail employment in, and the gross domestic product of American Samoa and the CNMI,” they added.

American Samoa leaders said its tuna-based economy will collapse if manufacturers are forced to pay the 50-cent yearly wage increase.

The CNMI government and the private sector are also against the move that should bring to $4.05 the hourly wage rate on the islands by May 25, citing its negative impact on the commonwealth’s struggling businesses.

Bingaman and the three other lawmakers said they are convinced that the two insular areas’ plea “at this time is genuine.”

They added, “We support increases in the minimum wage, but believe that in these cases they must not be implemented on a fixed schedule, but on a flexible schedule that is tied to expert analysis.”

They cited the U.S. Department of Labor study “Impact of Increased Minimum Wages on the Economies of American Samoa and the Commonwealth of the Northern Mariana Islands,” which concluded that “there appears to be a genuine cause for concern that, at some point before the escalation to $7.25 per hour in 2014, production (of American Samoa’s tuna canneries) will be shifted to facilities outside the U.S. jurisdiction.”

In the Northern Marianas, the report cited the wage hike’s negative impact on the islands’ tourism-based economy.

According to Bingaman and the three other lawmakers, “The report further noted that the new full minimum wage level of $7.25 would cover nearly 80 percent of all workers and stated, ‘By comparison, if the U.S. minimum wage were increased to the level of the 75th percentile of hourly-paid U.S. workers, that the adjusted wage rate would be $16.50 per hour.’ Clearly, such automatic minimum wage increases within this short period of time are not economically sustainable.”