Obama Intentionally Delays Minimum Wage In American Samoaff

Source: WJTV

American Samoa (AP) President Barack Obama has signed into law a bill that delays the implementation of federally mandated minimum wage hikes in American Samoa this year and next, and gives the Northern Mariana Islands a break from the hikes in 2011.

He signed the bill Thursday, the day the 50-cent hike was to take effect in American Samoa, the U.S. territory’s nonvoting congressional delegate, Eni Faleomavaega, said in a news release. The annual hikes mandated in 2007 won’t be implemented in American Samoa this year or next year, and future increases will be revisited in 2012, he said.

The hike did go into effect Thursday in the Northern Mariana Islands. The new law mandates the increase in the U.S. commonwealth will be skipped in 2011 and then resume in 2012.

“With the increase of 50 cents, bringing us to $5.05 per hour here in the Northern Mariana Islands, businesses that are primarily employing minimum wage workers have experienced a 66 percent increase in their labor costs in just three years,” Gregorio “Kilili” Sablan, the islands’ nonvoting delegate to Congress, told the Saipan Tribune. “That is a very substantial change in the cost of doing business.”

Sablan called the legislation a “reasonable compromise and a cautious policy.”

“Workers will get their raise, which business has been expecting and has budgeted for. Businesses will get some breathing room next year,” he said.

Under the original legislation, the minimum wage hikes were to go into effect annually until the federal minimum wage of $7.25 an hour was reached.

In American Samoa, this year’s 50-cent hike would have boosted minimum wages in 18 industries. Garment industry Workers, for instance, would have made $4.68 an hour, while workers in shipping and transportation would have seen their hourly pay increase to $6.09.

The territory’s largest employers, the fish canneries, would have had to pay a minimum wage of $5.26 per hour.

Chicken of the Sea cited the 2007 law when it closed its tuna cannery in American Samoa in September 2009, costing the jobs of more than 2,000 employees. The law was also cited by StarKist Co. in its decision to lay off 800 workers at its cannery this year.

The Chicken of the Sea jobs were “outsourced to Thailand where workers are paid 75 cents and less per hour to clean fish,” Faleomavaega said.