Legislators Call For Break On Minimum Wage Increase

Pacific Magazine
Saturday, June 23, 2007

By Fili Sagapolutele in Pago Pago

Lawmakers from U.S. Pacific Islands agreed that the new federally mandated minimum wage hikes for American Samoa and the Commonwealth of the Northern Mariana Islands would have a devastating impact on those economies. They want the U.S. Congress to cancel the pending increase.

This consensus was outlined in a resolution approved late today by delegates attending the 26th Association of Pacific Island Legislatures (APIL), hosted by American Samoa.

According to the new federal law, which applies to the entire U.S., the first hike of 50 cents per hour goes into effect July 24, followed by an additional 50 cents every year thereafter until the two territories' minimum wages reach the new federal level of $7.25 per hour.

However, APIL delegates agreed with testimony from American Samoa and CNMI delegates that the increases will cripple their local economies.

CNMI delegate Rep. Martin Ada told delegates that there is" urgency" in this matter because the new mandated hike will adversely affect his island territory as well as American Samoa.

Ada said the CNMI's economy is already declining and new hike will add further pressure. He points out that CNMI's garment industry is slowing "disappearing."

The CNMI's annual budget about a year ago was $213 million, Ada said, but is now down to about $163 million.

"And now this hike and escalating clauses is imposed on us," he said.

The new hikes and escalating clauses "will be devastation" to American Samoa and CNMI, said American Samoa Senate President Lolo M. Moliga. "We feel that Pacific Islands should stand with us on this economically important matter," he added.

Hawaii State Sen. J. Kalani English supports the resolution, which "is a good starting point" in informing Washington of the situation American Samoa and CNMI faces. "Congress should be made aware of the impact this wage hike will have on the two territories," he said.

The APIL resolution states in part that the U.S. government has afforded special concessions to American Samoa and CNMI to set their minimum wages at levels lower than for the rest of the country.

According to the resolution, the immediate affect of increasing the U.S. hourly minimum wage applicable to the states "will devastate the economies" of American Samoa and CNMI "due to anticipated massive layoffs and insurmountable financial difficulties."

It further notes that the fish canning plants in American Samoa and garment industry in CNMI "have already indicated that such an increase will result in their likely departure.

"It is expected that the collapse of both economies will cause an immediate mass exodus of residents, possibility to neighboring islands the U.S. mainland," the resolution says. "The sudden strain on the new host countries will devastate their economies and resources."

Additionally, "social, religious, and cultural facets of Pacific island life will also be overwhelmed. Change will be swift and if solutions are prolonged, the affected states may never recover.

"American Samoa and CNMI have expressed strong opposition to the increase in minimum, wage for their respective islands," the resolution says adding that APIL joins their efforts and prays the U.S. Congress amend provisions of the new law "and eliminate the annual escalation to the minimum wage until such time that a proper plan is in place to curtail its devastating effects."

Copies of the resolution will be sent to congressional oversight committees dealing with labor and insular area issues, Interior Secretary Dirk Kempthorne and U.S. Senators Daniel K. Inouye and Daniel Akaka, who represent Hawaii.

Also approved today was a resolution that calls on all APIL member nations "to join hands and share information on ways to prevent further gradual global warming for our atmosphere."

The resolution recommends that APIL member "increase our reliance on renewable energy sources such as wind, sun, and geothermal energies and further reduce pollution."

Established in 1981, the APIL membership includes American Samoa, Hawaii, Guam, Commonwealth of the Northern Mariana Islands, Federated State of Micronesia, Marshall Islands and Kiribati.

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