American Samoa tries to rid itself of mandated wage hike

Transcript

The American Samoa government is preparing an alternative to US federally mandated minimum wage hikes, in the hope it can get rid of them once and for all.

The government and private sector say the wage increases are a huge burden on the economy and make it difficult to attract foreign investors.

But social service workers say many people are struggling to get by with the increase in living costs.

Bridget Tunnicliffe reports:

The governor Lolo Matalasi Moliga has directed the Commerce Department to come up with a living wage for local workers in preparation of the next minimum wage hike scheduled for September next year. The Department will also prepare a justification package requesting Congress permanently remove it from the automatic minimum wage hikes. The Commerce director Keniseli Lafaele says the objective is to come up with a living wage that the average local family can survive on, while not being a burden on the economy. He says with about 90 percent of the private sector based on fishing, American Samoa has a limited and fragile economy.

KENISELI LAFELE: With that kind of economic base we cannot afford not to fight for a wage that we can sustain in moving forward so the burden is on us to prove or make the US understand that this is our livelihood.

But the former director of Catholic Social Services, Cecilia Solofa, says nobody bothers to ask low income earners, who make up the majority of the workforce, how they feel about it. Ms Solofa, who is still involved with a number of charities, says the cost of living has gone up and current wage levels are not enough for many.

CECILIA SOLOFA: The biggest population are really really in need of good wages, they are low-income earners and I mean we are forever having to fish out for food for the families.

But the chair of the Chamber of Commerce, Lewis Wolman, says previously mandated wage hikes have been a huge burden. Mr Wolman says they were implemented from 2007 to 2009, at which time the territory lost one of its two tuna canneries.

LEWIS WOLMAN: Back in 2009 in one week we lost 2,000 jobs that was 10-20 percent of the labour force in American Samoa was laid off overnight and we're still dealing with the economic problems from that mass lay-off.

Lewis Wolman says wage hikes were suspended when it was clear further increases were going to hurt the economy even more. He says the current system makes it difficult to attract foreign investors because minimum wages are high compared to elsewhere in the region and it creates uncertainty. Keniseli Lafaele says it doesn't make sense that the territory is expected to implement wage hikes to bring it inline with America.

LEWIS WOLMAN: You're really looking at the US being the most powerful and wealthiest country in the world and having to have our small dependent economy, the wage rates a function of the federal minimum wage, it doesn't make any sense.

Lewis Wolman says the economic effects of the 2009 tsunami are still being felt in the territory making the economy even more vulnerable to wage hikes.