27 Feb 2008

Further warning about impact of wage hikes on American Samoa

4:11 pm on 27 February 2008

The former general manager of Samoa Packing in American Samoa Herman Gebauer warns further increases in the minimum wage will see the demise of the tuna canneries.

Hearings are underway to consider the impact of a federal law to hike the minimum wage by 50 cents every year, until it's on par with the federal minimum wage of 7 dollars and 25 cents an hour.

The next 50 cent hike is due in three months.

He says the two canneries can non longer compete with Asian producers, and says if canneries go offshore it would cripple the local economy.

"And that will probably be very hard for them to swallow. Thailand and these places are being paid the hourly wage of probably 1 dollar an hour or less. Raw material in those places, well tuna is almost the same price, it is global, but the manufacturing supplies most of those other countries have, is their own canning manufacturing within, [like] cartons, labels."

Mr Gebauer says the rising cost of electricity and fuel are also a factor for the canneries.