Congressman Faleomavaega announced today that in a letter dated February 14, 2008 he informed Chairman George Miller of the House Committee on Education and the Workforce, that he has introduced H.R.5154, legislation to amend the federal minimum wage law. The proposed amendment will condition further increases in minimum wage applicable to American Samoa and the Commonwealth of the Northern Mariana Islands (CNMI) on a determination by the Secretary of Labor that such increases will not have an adverse impact on the economies of American Samoa and the Commonwealth of the Northern Mariana Islands.
Congressman Faleomavaega’s letter was copied to Senator Daniel Inouye, Chairman Nick Rahall of the House Committee on Resources, Congressman Don Young, Ranking Member on House Committee on Resources, Chairwoman Donna Christensen of the House Subcommittee on Insular Affairs, Governor Benigno Fitial of CNMI, Governor Togiola Tulafono of American Samoa, Senate President Lolo Moliga and Senators of the Fono, and Speaker Savali Ale and Representatives of the Fono. A complete text of the letter is included below:
Dear Chairman Miller:
On January 25, 2008, the U.S. Department of Labor (DOL) issued its report on the impact of increased minimum wages in American Samoa and the Commonwealth of the Northern Mariana Islands (CNMI). The study was undertaken in response to Public Law (P.L.) 110-28 which increased minimum wage by fifty cents per hour in American Samoa and CNMI on July 24 and July 25, 2007, respectively. P.L. 110-28 also mandated an automatic increase, or escalator clauses, of fifty cents per hour every year thereafter until 2014 for American Samoa, and 2015 for CNMI.
While I supported a one-time increase of fifty cents per hour for American Samoa’s cannery workers and lowest-paid government employees making less than $5.15 per hour, I opposed escalator clauses which I believed would be detrimental to both economies. As you may know, the DOL report concludes that “neither Chicken of the Sea nor StarKist has reduced output or working hours in immediate response to the first fifty-cent increase in the minimum wage”, and I am pleased by this outcome.
Regarding automatic increases, or escalator clauses, every year thereafter, the report also supports what I have said from the outset. Our economy cannot afford automatic increases in minimum wage. Automatic increases could lead to the closing of both canneries which would devastate the local economy “resulting in massive layoffs and insurmountable financial difficulties.”
According to the DOL, when our canneries go, their closure will have a ripple effect on our economy and could amount to a loss of 7,825 jobs. Given that the United States Territory of American Samoa lies 2,300 miles southwest of Hawaii, covers a land area of 76 square miles, has a population of almost 70,000 and a per capita income of $4,300 per year, American Samoa cannot afford, at this time, to lose either cannery until such time as it can diversify its economy.
This is why I have introduced H.R. 5154 to end automatic increases, or escalator clauses. I am also working to extend 30A tax benefits. Even though I believe our canneries will one day depart despite these incentives, it is important for American Samoa to give its tuna canneries every reason to stay until the time comes for them to move elsewhere.
I also believe it is important to help CNMI protect its economy, and H.R. 5154 would do this. If passed, H.R. 5154 would empower the DOL, in consultation with the Secretary of the Interior and the governments of American Samoa and CNMI, to conduct economic assessments every two years to determine when and if our economies can absorb future increases.
I want to convey my personal thanks to you for sending two professional staff members from your Committee to the field hearing being held on the economic effects of the recently increased minimum wage. The field hearing is being held at my request by the House Resources’ Subcommittee on Insular Affairs and will take place in American Samoa on February 22, 2008.