17 May 2007

Fono paper warns minimum wage rise will devastate American Samoan economy

10:26 am on 17 May 2007

A paper presented by Fono leaders to U.S. lawmakers this week says a bill now before Congress to increase the local minimum wage will trigger an economic tsumani that will wipe out the territory's economic system.

It appeals to Congress not to go ahead with a proposal to increase the local minimum wage by 50 cents annually beginning 60 days after the bill is passed until the federal minimum wage of $7.25 is reached.

The paper states that if the 50 cent increase is approved, the canneries will have to move their operations.

Currently the canneries is one of the biggest contributors to the territory's economy.

It predicts that the territory will experience a massive economic recession like it did in the mid 1970s, and predicts a mass migration of unemployed residents moving to the U.S. mainland.