Hon. Mrs. Nancy Pelosi, Speaker of the House
United States House of Representatives
sf.nancy@mail.house.gov                                                                        18 January 2007

FEDERAL MINIMUM WAGE INCREASE

Dear Mrs. Speaker

The Executive Board of Directors and Members of the American Samoa Chamber of Commerce would like to express their concern over what is being reported in the press as a piece of proposed legislation to include American Samoa in the broad sweep of the Minimum Wage increase in two stages from it’s present level to $7.25.

If the reports are correct, it would seem that little or no consideration has been given to the sustainability of the economy of American Samoa, an economy that is heavily dependent on the operations of two tuna processing canneries which employ 30% of the Territory’s workforce and contribute directly and indirectly to over 75% of the economy. The canneries have only a further 11 months of 30A tax credits and even with these credits they are both finding it difficult to operate profitably. If their wage bills are further increased by the imposition of a higher minimum wage and as a result they decide to scale down or even close their operations here the local economy would be decimated as there is not much other supporting industry at present. Many local businesses would not be able to sustain such a large increase in their wage bills and they would  close, and the Territory’s economy would have to be supported by even more US government financial assistance than it currently receives in order to prevent it from collapsing.

In addition to the required increased financial support, the social consequences of thousands of people being unemployed needs to be considered very carefully, as does the impact on the local banking industry, the tightening of credit, the outflow of capital and the lack of any future investments by overseas companies in the Territory.

The  negative effect of your reported actions is already being felt as a proposed new project which has been worked on for many months by an international consortium and which would have provided a high level injection of investment dollars and much needed employment  has now been cancelled by the consortium as labor costs under the new proposed minimum wage would make the project uneconomical. This is a terrible blow in our endeavors to strengthen our economy. 

The present system of a two year review of minimum wages as already approved works well and takes into consideration the economic needs of the Territory’s employers and employees, and we would ask you to leave this system in place as the reported proposed changes would cause economic problems and hardships that the Territory would not be able to sustain.

David Robinson
President
American Chamber of Commerce

                                   
cc   The Honorable Governor Togiola T.A. Tulafono
The Honorable President of the Senate Lolo L.M. Moliga
The Honorable Faleomavaega Eni Hunkin, American Samoa Delegate to Congress
Papali’i David B. Cohen Deputy Assistant Secretary, US Department of the Interior