9 Apr 2010

GAO report shows wage hikes contributed to cannery closure

8:19 am on 9 April 2010

The U.S. Government Accountability Office impact study on the minimum wage increases report indicates the mandated wage hikes contributed to the closure of the Samoa Packing cannery in American Samoa.

The GAO report, released today, was mandated by federal law as American Samoa and CNMI are now faced with annual minimum wage increases.

According to the report, earnings data show that employment in American Samoa grew from 2006 to 2008, but dropped from 2008 to 2009.

The report says that many employers reported having taken cost-cutting actions, such as freezing hiring and cutting worker benefits, since the increases began.

Employers also reported planning actions such as leaving American Samoa or closing by the end of 2010.

More employers attributed their actions to the minimum wage increases than to other factors.