American Samoa Min Wages Set To Go Up 2018; Tuna Exports Dropping

Both gov and cannery officials argue that wage increases aren’t tailored for local economic conditions, competition with low wage countries

By Fili Sagapolutele

PAGO PAGO, American Samoa (The Samoa News, December 19, 2016) – Scheduled mandated minimum wage increases for American Samoa will eventually affect wages of almost all tuna cannery workers in the territory, according to the US Government Accountability Office report to the US Congress; and also points out that there is a drop in tuna exports to the US.  

Based on an amendment provision to federal law, the 40-cent hike per hour for all minimum wages in American Samoa went into affect last September 2015, and the next hike is in 2018.

Both the government and cannery officials have argued that the wage increases do not take into consideration local economic conditions and that the local canneries are completing with low wage countries.  

In its Dec. 2 report to Congress, the GAO — the investigative arm of Congress — says that as American Samoa minimum wage increases continue, they will affect a growing percentage of workers in the territory’s tuna canning industry.   For example, GAO says that from June 2014 to January 2016, both the minimum wage and the median wage of hourly workers in the tuna canning industry increased by 8 percent, from $4.76 to $5.16.  

Additionally, from 2007 to 2016, as a result of previous minimum wage increases, the median wage among workers in the tuna canning industry employed by questionnaire respondents rose by 56 percent, from $3.30 to $5.16 per hour, the GAO report revealed.  

GAO also says that American Samoa employers’ responses to its questionnaire regarding workers’ wages as of January 2016 indicated that the scheduled increase of the industry’s minimum wage to $5.56 in September 2018 would affect 91 percent of canning industry hourly workers, who currently earn that amount or less.  

A footnote in the GAO report notes that a scheduled increase in the minimum wage would not directly affect the wages of any workers already earning the amount of the new minimum.  

However, because their wages would be subject to subsequent scheduled increases, we include such workers in the percentages that would be affected,” the footnote said. “Available data do not show any workers currently earning the precise amounts of the scheduled minimum wages.”  

The GAO also informed Congress that future minimum wage increases would affect the wages of 93 percent of current cannery hourly workers when the industry’s minimum wage reaches $5.96 in September 2021 and would affect 98 percent of current canning industry hourly workers when it reaches $7.25 in 2033.   “By 2033, the extra annual cost added by minimum wage increases after January 2016 would be approximately $4,027 per worker,” said GAO, which explained that GAO identified the additional cost by calculating the difference between the cost per worker in January 2016 and the cost per hourly worker through 2033, based on the scheduled minimum wage increases and averaged across all workers.  

TUNA EXPORT   According to GAO, tuna exports to the United States from all sources, and from American Samoa in particular, have dropped over the last few years. GAO cited one tuna expert who was interviewed, who says that the general decline in tuna exports to the United States reflects a shift in consumer preferences.   Data published by the National Oceanic and Atmospheric Administration (NOAA) show that U.S. per capita consumption of canned tuna fell by 25 percent from 2004 to 2014, according to a footnote in the GAO report.   Congress was also informed that from 2008 to 2015, the nominal dollar value of canned tuna exported to the United States from American Samoa fell by 37 percent. GAO says that in 2015, tuna shipments represented more than 99 percent of American Samoa’s $367 million in commodity exports to the United States.  

GAO also says that according to the US Bureau of Economic Analysis (BEA), changes in American Samoa’s tuna industry have been important determinants of changes in its gross domestic product (GDP).   For example, the BEA attributes the decline in the territory’s GDP to decline in activity in the tuna canning industry, such as when canned tuna exports fell in 2010. However, according to the BEA, increased activity in the tuna industry in 2014, including the construction of a multimillion-dollar tuna processing plant, contributed to growth in private investment and goods exports due to an increase in exports of canned tuna.  

However, the multimillion-dollar processing plant, cited by BEA is Tri Marine International’s Samoa Tuna Processors Inc., cannery plant, which officially opened in January 2015; but as of last week Friday, the cannery’s canning operation has been closed “indefinitely”, laying off some 700 workers, but leaving a skeleton crew of 100 for the company’s local logistic hub. 

The Samoa News
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