14 May 2015

Wage rise will be tough on American Samoa businesses

3:00 pm on 14 May 2015

The American Samoa Chamber of Commerce says a wage increase will have a serious effect on the canneries and local businesses that are already struggling.

American Samoa tuna processing plant

American Samoa tuna processing plant Photo: RNZI Monica Miller

The federally mandated minimum wage in the territory is set to rise by 50 cents in September, following a three-year wage freeze.

Both canneries in the territory, Starkist and Samoa Tuna Processors, want the freeze to continue, saying further increases will be detrimental.

The chair of the Chamber of Commerce, David Robinson, says the increase will be very tough on businesses, as the economy has been quite weak for some years.

"Some of the small and medium size businesses have been finding it quite difficult, to make ends meet, and another 50 cents whilst it doesn't sound very much, it does account for quite a lot of money that those businesses will have to find in order to pay their wage bill and at at time where the economy is not performing particularly strongly, it's another imposition that a lot of them would prefer not to have to deal with."

David Robinson says it's possible the wage rise could mean a reduction in the labour force.

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