NMI, American Samoa leaders ask for delay in wage hike or $30M aid

Gov. Benigno R. Fitial and American Samoa Rep. Eni Faleomavaega have asked the U.S. Congress to either delay the next minimum wage hike or approve a $30-million financial aid for both jurisdictions.

In a letter addressed to U.S. senators, the two officials reiterated their plea for Congress to postpone the next minimum wage increase scheduled for May 25, 2008.

“Simply put, the fragile private sectors of American Samoa and the Commonwealth of the Northern Mariana Islands cannot support additional costs when we are already in economic decline,” Fitial and Faleomavaega said in a letter to senators Edward Kennedy, Daniel K. Inouye, Jeff Bingaman, and Daniel Akaka.

The pair noted that the impact study by the U.S. Department of Labor supports their position.

Fitial and Faleomavaega also proposed a backup plan should the wage hike take effect. They asked the senators to support a $30-million financial assistance to be shared by the CNMI and American Samoa. They proposed that the funding provision be included in the emergency supplemental appropriation bill now being drafted in both houses of Congress.

Fitial and Faleomavaega said the money would be spent on “investments in critical areas that have the potential to bring multiplying economic benefits.”

They identified the areas where the money could be spent: transportation projects, measures to bring down the cost of fuel and stabilize shipping, job retraining, emergency financial relief to affected employers, efficiency studies for local governments, and funding for essential public services.

In the CNMI, temporary support could also be given to the visitor industry to help bring new money into the islands.

“Inclusion of this language in the Emergency Supplemental this year and every year thereafter will give American Samoa and the CNMI an opportunity to provide an essential bridge to sustainability that our communities need in the coming years until such time as Congress reviews the economic impact of further increases in minimum wage,” said Fitial and Faleomavaega.

Senate Majority Leader Harry Reid is aware of the funding request, they added.

Fitial and Faleomavaega wrote a separate letter to Rep. George Miller, a staunch defender of the scheduled increase in the minimum wage. They asked Miller to support legislation that would hold off, or offset, further wage hikes.

“We appreciate your leadership in making sure all workers receive decent wages and we stand with you, in principle. However, because there is no new money coming into our islands, the increase will not bring benefits to our people, but will more likely result in losses of jobs, benefits, and tax dollars,” they said.

“In short, American Samoa and CNMI could become welfare wardens of the federal government. We are sure this is not what Congress intended when it passed legislation to increase minimum wage in our jurisdiction,” they added.

The minimum wage rates applicable to American Samoa and the CNMI were increased 50 cents an hour on July 24 and July 25, 2007, respectively. Minimum wages to both jurisdictions will increase by 50 cents until they reach the federal minimum wage of $7.25 an hour.

For the CNMI, the minimum wage was increased to 50 cents an hour to $3.55 on July 25, 2007, and will rise to $7.25 an hour by 2015. The next 50-cent increase will happen in May.

For American Samoa, current minimum wages vary by industry, with the most significant being the minimum wage for the tuna canning industry, which is currently $3.76 an hour, reflecting the initial 50-cent increase on July 24, 2007. The minimum wage for American Samoa will increase across the board to $7.25 an hour by 2014.