CHICKEN OF THE SEA TO CLOSE PAGO CANNERY

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Increases in minimum wage blamed

APIA, Samoa (Samoa Observer, May 3, 2009) – A tuna cannery in American Samoa is closing partly because of a rise in the minimum wage mandated by recent changes to federal law.

San Diego-based Chicken of the Sea International says it will close its COS Samoa Packing plant at the end of September.

Most of its workers are believed to be from the Independent State of Samoa.

The cannery has more than 2000 workers and is one of the territory’s largest employers.

Its closure should affect the economy of Samoa but to what extent can only be speculated.

Cannery workers in American Samoa are regular travellers to Samoa at holiday periods bringing goods as well as income for Samoa Shipping Corporation and the inter-Samoa airlines.

Temporary shutdowns of production and cut backs have affected remittances from the territory this year, a money exchange company in Apia said last month.

Gov. Togiola Tulafono says the company told him that labour costs contributed to its decision.

Minimum wage rates for the US territory once varied by industry, ranging from less than $US4 to just over $US5.

But Congress passed a law last year mandating new minimums to be introduced by 50 cent increments every six months.

The rate will stop climbing in July once it hits $US7.25, the federal minimum wage.

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