22 Nov 2007

Taskforce says impact on American Samoa of wage hike potentially devastating

3:44 pm on 22 November 2007

A taskforce in American Samoa believes the territory's economy will be devastated if the annual 50 cent wage hikes are not dropped.

The US Government in May approved a bill which saw the minimum wage in American Samoa and in CNMI increase.

The hourly rate increased immediately by 50 US cents, and is to rise by 50 cents every year until local wages are on par with those on the mainland.

American Samoa's governor appointed a taskforce to assess the impact of the escalator clause in the bill.

It found that local businesses absorbed the initial 50 cent hike wage without much impact.

However figures showed that the escalator clause will drive up the wage bill in government and private sector exponentially.

The information is to be incorporated into the Department of Labor study which is required under the minimum wage law and its hoped that it will convince the US Congress to remove the escalator clause.