U.S. Congress Urged To Defer Minimum Wage Hikes
The U.S. Congress has been urged either to defer a 50-cent-per-hour rise in the minimum wages of the Northern Marianas and American Samoa or to grant $15-million in aid to each jurisdiction.
Northern Marianas Gov. Benigno R. Fitial and American Samoa Rep. Eni Faleomavaega in a joint letter to U.S. senators said Congress should either hold off the next minimum wage hike or offset its expected adverse impact with financial aid.
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Under the current federal law, wage hikes of 50 cents per hour for American Samoa and Northern Marianas will continue until wages reach the new federal level of $7.25 per hour.
The next increase of 50 cents per hour goes into effect on May 25.
Fitial and Faleomavaega reiterated that the two economies “cannot support additional costs when we are already in economic decline.”
But the pair also proposed a backup plan which they urged Congress to consider if the lawmakers find a delay in the wage increases unacceptable. The proposed tradeoff is a $30-million financial assistance to be included an emergency supplemental appropriation bill now being drafted in both houses of Congress.
Fitial and Faleomavaega said the money, to be shared by the Northern Marianas and American Samoa, 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 Northern Marianas, temporary support could also be given to the declining tourism industry to help bring new money into the islands.
The leaders said the appropriation will help the Northern Marianas and American Samoa deal with the immediate economic effects of the minimum wage while Congress studies what next step to take.
Fitial and Faleomavaega wrote a separate letter to Rep. George Miller, a defender of the scheduled increase in the minimum wage. They asked Miller to support legislation that would postpone, 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,” said the two leaders.
They added, “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.”
For the Northern Marianas, 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.
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.
Further escalations of the minimum wage are seen to lead to the closure of the two canneries, which employ three in every four workers in American Samoa.
