‘US Labor wage report flawed’

Two ranking U.S. House members described as “poorly researched” and “fundamentally flawed” a study conducted by the U.S. Department of Labor on the impact of the increased minimum wage on the economies of the Commonwealth of the Northern Mariana Islands and American Samoa.

According to a Samoa News report, Rep. George Miller and Sen. Edward M. Kennedy wrote U.S. Labor Secretary Elaine Chao on March 14 to raise concerns that the Labor study—mandated by Congress—does not adequately address minimum wage issues, was poorly researched and in many respects, was fundamentally flawed.

Miller is chairman of the House Committee on Education & Labor and Kennedy is the chairman of the Senate Committee on Health, Education, Labor and Pensions.

Quoting the two lawmakers, The Samoa News said the Labor report makes no attempt to evaluate the impact of the first 50 cent wage hike in 2007 or future increases on the living standards of working families in American Samoa and CNMI and as a result, “the report entirely fails to address one of the main issues that Congress required DOL to assess, thereby depriving residents of the two territories of the full information that they deserve.”

Miller and Kennedy described the report as “decidedly one-sided,” citing that DOL interviewed a limited number of government officials, business representatives and industry lobbyists. The two lawmakers said that these are not the only viewpoints it should have sought.

“The authors of the report did not obtain the views of workers, their non-government advocates, or organizations such as social services or churches that interact with working families on a regular basis,” said Miller and Kennedy in the letter. “This is an incredible oversight in a report on the impact of a labor policy on living standards and employment.”

The report also failed to independently verify assertions and speculative statements made by business representatives and instead simply recorded and repeated their claims, according to the letter.

For example, they say for American Samoa, DOL had access to a long record of canneries’ testimony before the Special Industry Committee that any increase in wages would result in a curtailment of employment.

“Given that this testimony is directly contradicted by the fact that the canneries have reported ‘no’ discernible job losses in the wake of the July 2007 wage increase of 50 cents—the largest single increase in the history of American Samoa—the claims of future job losses due to future increases and the stated bases for such claims should have been carefully scrutinized,” said Miller and Kennedy.

The two lawmakers believe that if DOL had probed deeper into other cannery statements about the impact of minimum wage increases, it would have revealed further apparent contradictions warranting, at the very least, some further investigation.

Additionally, they say DOL didn’t request the appropriate data on profitability from the major employers in either territory to independently test whether further minimum wage increases would likely cause closures or layoffs.

Miller and Kennedy say they are concerned that DOL failed to generate any new data on wage levels, cost of living, or employment conditions on the two territories.

In addition, they failed to determine whether the new wage hike is actually being paid and to evaluate the impact of the new wages on workers’ living standards and rates of employment.

“The people, businesses and governments of these two Pacific territories have a right to expect that the Department of Labor would make every effort to fully inform Congress of their present economic circumstances,” said Miller and Kennedy. “Regrettably, the department failed to undertake such an effort.”

The two lawmakers said that, while data shortfalls were to be expected given the status of data collection in the territories and the limited time to conduct the study, DOL’s report still failed to identify all of the relevant data shortfalls, as Congressional staff had requested, so that Congress would know how to focus its evaluation of the report and its subsequent inquiry.

In conclusion, Miller and Kennedy said the report fails “to provide Congress with a complete, meaningful, and reliable analysis of an issue critical to the working families of American Samoa and the CNMI.”

A copy of their letter was sent to American Samoa Rep. Eni Faleomavaega. In a separate letter to Faleomavaega, Miller said that despite DOL’s failure, he will continue to work with Faleomavaega on these matters of critical importance to American Samoa.

“I know we share a common concern that the people of the territories receive fair and decent wages for their labor and that the economies of these territories grow and diversify in a sustainable way,” he added.

Faleomavaega wrote to Gov. Togiola Tulafono and the Fono and shared with them the letter by Miller and Kennedy to Secretary Chao as well as Miller’s letter to him.

Faleomavaega said that in his meeting with top staffers of both Miller and Kennedy, there was consensus that the DOL report didn’t provide enough specific data and information to address the serious issues whether another increase on wages would negatively impact the standard of living and the cost of living of our workers, especially those who do not work for the local government.”

“No other leaders in Congress know more about the rights of working men and women throughout the United States and its territories than Chairman Miller and Chairman Kennedy,” he said.

Faleomavaega said he and U.S. Sens. Jeff Bingaman, Daniel Inouye, Daniel Akaka have written a joint letter to Senate Appropriations Committee chair Robert Byrd to amend the current [minimum wage] law when it comes up on the Appropriations Supplemental bill in May.”

“Essentially, I’ve tried to work out a compromise language so that at least for the next two years we will get DOL to do a more comprehensive review of the economies of both territories,” he said. “Until we know for sure, it is very difficult to determine if another increase in wages of 50-cents is commensurate with the economies of American Samoa and the CNMI.”

Faleomavaega suggested that local leaders review carefully the letter from Miller and Kennedy for further discussion.

“As indicated in their letters, the bottom line is we need more specific data and information before we put a hold on another 50-cent increase on our minimum wage,” he said.