June 7, 1999

FOR IMMEDIATE RELEASE

WASHINGTON, D.C. ---- FALEOMAVAEGA TESTIFIES AT AMERICAN SAMOA'S MINIMUM WAGE HEARING

      Congressman Faleomavaega testified today before a U.S. Department of Labor Committee in American Samoa. The Committee will make recommendations on the minimum wages in the territory.

      American Samoa is the only jurisdiction in the United States in which minimum wages are set by special industry committees. Minimum wages are set for each industry which has a significant number of workers, and the wages can be different.

      As in the past, the Congressman noted his desire to see employees in American Samoa paid more than they are today, at the same time noting that a high minimum wage is of little value if there are no jobs:

      "At the outset, I want to state that I continue to be frustrated with American Samoa's lack of meaningful progress towards the goal of paying its people the same minimum wage which applies in the mainland U.S. Five to eight cent annual increases in the hourly rate add up to very little in real terms, especially for workers at the low end of the wage scale. The express mandate of the FLSA to bring our minimum wage rate to the national level as rapidly as possible is a goal which seems to be receding ever farther into the future, and I find this a matter of great concern," said Faleomavaega in his statement.

      He went on to say in his statement, "At the same time, the Department of Labor's directive is that this Committee's recommendations be made with `due regard to economic and competitive conditions, [and that they should] not substantially curtail employment'. Congress has also indicated that Industry Committees should consider a broad range of factors in assessing economic and competitive conditions, including `maximization of employment and the ability of business in American Samoa to be competitive within the Pacific region.' And so, as you begin your deliberations on the various industries in the territory, it is imperative that you take into consideration the economic and competitive conditions of American Samoa and ensure that what you recommend does not result in either a loss of jobs for our people or a loss of competitive advantage for our businesses."

      The Congressman continued to emphasize the need to expand the territory's economy. After noting international minimum wage rates such as Fiji (37 cents per hour), Tonga (60 cents), Samoa (51 cents) and the Solomon Islands (22 cents), he emphasized in his statement the need to diversity our economy:

      "It seems to me that the key to higher wages lies in developing a more diversified economy, one which offers more highly skilled employment. I hope that the recommendations of the Economic Development Commission will provide American Samoa with some options in that regard. As the economy grows and diversifies, wages will rise. Without diversification and growth, an artificially high wage structure simply prices American Samoa out of the global economic picture."

      Finally, the Congressman suggested that the territory could make more money available to workers by amending its tax law with regard to how the two largest private employers are taxed. Together, these two businesses exported $450 million of canned tuna from our shores:

      "I have suggested before, and I wish to suggest again, that perhaps it is time to change our local laws so that the canneries pay a fixed tax based on a fixed unit of product. This taxing regime would have several advantages, including simplification of the determination of the corporate tax owed to ASG, certainty to both ASG and the canneries of the amount of tax to be paid, timely payment of the tax owed, and a substantial reduction in the amount of money spent on tax audits and compliance. Presumably, these savings could be used to increase employee wages while maintaining acceptable corporate profits."

      The Special Industry Committees are authorized under federal law by the Fair Labor Standards Act. The committees meet every two years in the territory, and this year's committee is #23. Current minimum wages in American Samoa range from $2.45 for the miscellaneous category to $3.87 stevedoring, lighterage and maritime shipping agencies.