US Dept of Interior: Insufficient Info On Negative Impact Minimum Wage Samoa ff

Source: Samoa News

“Insufficient commentary” is how the U.S. Department of Interior describes the federal report on the impact of future federally mandated minimum wage hikes in American Samoa and the Commonwealth of the Northern Mariana Islands (CNMI).

However, the report’s author, the U.S. Government Accountability Office (GAO), disagrees, saying that this information is provided by employers and worker views as cited in the 165-page report publicly released last Thursday.

DOI’s Anthony M. Babauta, Assistant Secretary for Insular Areas, responding in a Mar. 10 letter to a draft of the report, says that DOI values the fact that the report contains a great deal of “useful and diverse information” on both American Samoa and CNMI and agrees with the GAO’s findings.

“The Department, however, notes that there is a lack of sufficient commentary on the future impact of minimum wage increases in American Samoa and the CNMI,” Babauta wrote.

With regard to the impact of further wage increases “the relatively minor amount of material is interspersed throughout the report among the findings on the minimum wage impact from 2007 to date,” he continued.

“Currently, there is little research or data on the implementation and impact of federal minimum wage rules in American Samoa and the CNMI, and the report, along with the subsequent reviews, could be instrumental in identifying trends,” he observed.

“The downward spiraling economic situations in... American Samoa and CNMI present an austere future for the areas, and information in the report helps to identify the immediate need for actions to assist the territories,” he observed.

In American Samoa, said Babauta, there is only one major industry, i.e., canning tuna, and one of the only two canneries has already closed its operations. As identified in the report, “cannery officials cited that minimum wage increases were a significant contributing factor” for one of the canneries closing operations.

Babauta noted that the closure of one cannery resulted in the layoff of over 2,100 employees, and closure of the one remaining cannery will result in the layoff of 2,000 more employees.

“The number of displaced workers is quite significant as the canneries have employed over one-third of the work force and provided approximately 35% of total revenues of the American Samoa Government,” Babauta points out. “Additionally, the ripple effect of the closures on other businesses will reduce further the revenues to the local government.”