AMERICAN SAMOA LAWMAKERS: WAGE HIKE A ‘TSUNAMI’

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By Fili Sagapolutele

PAGO PAGO, American Samoa (Samoa News, May 16) - Senate President Lolo M. Moliga and House Speaker Savali Talavou Ale, who left Sunday night for Washington, are hand carrying the Fono's 35-page Joint Position Statement opposing the minimum wage measure, now pending in the U.S. Senate.

The statement asserts that the wage provision will "trigger an economic tsunami" that would "wipe out" the territory's economic system.

Before departing the territory, Lolo said the Fono's joint official statement will be presented to Congressional members and other ranking Washington D.C. officials with the hope of preventing a mandated minimum wage hike.

If approved, the Fono argues, this federal provision will, "without a doubt, trigger an economic tsunami that will absolutely wipe out the Territory's economic system; thereby causing catastrophic social chaos, with sufficient effects, which will clearly be felt by the 50 States of the union and the Congress..."

"As leaders and residents of the territory, we want our people to earn more and to have the additional disposal income, to improve their quality of lives," the Joint Statement says. "While short time economic benefits will be realized, unfortunately this short lived Utopian state will be followed by a period of drastic economic devastation. This is not a prognosis. It will be American Samoa's reality."

The major point of the statement focuses on the impact on the local economy if the two canneries reduce production or move elsewhere.

"If American Samoa's economic system was sufficiently diversified, the adverse economic impact will not be as destructive, if the canneries were to leave," the Fono contends. "Unfortunately, the two tuna fish canneries are the only economic game in town."The canneries departure will immediately curtail 29% or 5,000 jobs overnight and within six months, 37% or 6,501 more jobs will be abridged. Within six -12 months 2,875 or 16.5% government jobs will be lost, according to the Fono.

"Clearly, substantial amount of purchasing power will no longer be available in the Territory's economy," it says. "The economic and social destruction will be pervasive and unrelenting."

The Fono statement estimates the total direct tangible canneries' contribution to the local economic is about $233.8 million. Their figures are based on 2003 information provided by the canneries and 2005 estimates based on local economic conditions.

Estimates for 2005 states that 4,664 workers were employed at the canneries with a payroll of $45.4 million; $7.2 million for electricity & water; and $20.3 million in local purchases.

In 2003 total direct tangible contributions was at $183.9 million, which includes $42.8 in payroll (for 4,664 workers); $19.1 million in local purchases and $6.8 million in electricity & water expenses.

"The influence of the canneries over the territory's economic and social systems is pervasive and irrefutable," it says. "The departure of the canneries will wreak havoc in these two systems."

The Fono also provides some details of the canneries' influence over the territory's future economic perspective; surface and air transportation system; territory's infrastructure system; fuel imports; private sector; and ASG.

"Will the canneries leave the territory if the proposed minimum wage hike is approved?" the statement asks. "We contend that the canneries will leave, within two years from the approval of 50 cents minimum wage hikes, have fully transplanted their operations in more economically conducive locales. This is understandable as this represents a sound business decision."

Also included with the report are letters from Governor Togiola to ranking leaders of both the U.S. House and Senate, plus a Fono resolution passed earlier this year urging Congress to exclude American Samoa from the minimum wage hike, as well as a new Legislature Joint Resolution, signed by 17 Senators and all House members.

The new resolution "vehemently" objects to the proposed increase citing that such an increase will result in a "sizable curtailment of employment, which will effectively obliterate American Samoa's economic system, and contribute to indiscriminant social and economic chaos, eventually necessitating a federal bailout."

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