HEARING ON GAO MINIMUM WAGE REPORT FREEPORT AND REALITA PAPUA

June 27, 2011 FOR IMMEDIATE RELEASE
WASHINGTON, D.C.—FALEOMAVAEGA REQUESTS HEARING ON GAO MINIMUM WAGE REPORT
Congressman Faleomavaega announced today that he has requested a hearing on the GAO’s recently released report entitled ‘Employment, Earnings, and Status of Key Industries Since Minimum Wage Increases Began in American Samoa and the Commonwealth of the Northern Mariana Islands.’       The complete text of Faleomavaega’s letter of June 27, 2011 to Chairman John Fleming of the Natural Resources’ Subcommittee on Fisheries, Wildlife, Oceans and Insular Affairs, which was also copied to Ranking Member Gregorio Kilili Sablan Camacho Sablan, is included below.      Dear Mr. Chairman:      I am writing to request your support in holding a hearing on the GAO’s recently      released report entitled ‘Employment, Earnings, and Status of Key Industries      Since Minimum Wage Increases Began in American Samoa and the      Commonwealth of the Northern Mariana Islands.’      The report was issued as mandated by Congress in response to a federal law in      2007 which raised minimum wages in American and the CNMI by $0.50 cents per      hour each year until we equal the U.S. minimum wage.  Although I supported a      one-time increase of $0.50 per hour for American Samoa’s workers, I opposed      automatic escalator clauses that did not take into account American Samoa’s      fragile, island economy which has hinged for more than 50-years on a single-      industry, namely the presence of two major tuna canneries – StarKist and      Chicken of the Sea – that employed more than 74% of our private-sector      workforce.      In 2009, one day after American Samoa was hit by a powerful earthquake that set      off a massive tsunami from which the Territory has not fully recovered, Chicken      of the Sea closed its operations in American Samoa and outsourced some 2,000      jobs to its parent company in Thailand where fish cleaners are paid less than      $0.75 cents per hour.  In order to take advantage of U.S. duty-free laws, Chicken      of the Sea then hired a skeletal crew of about 200 workers in Lyons, Georgia to      can the pre-cleaned fish they get from Thailand.        This new model of exploiting cheap labor in foreign countries has impacted      StarKist’s ability to stay competitive given that StarKist is the only major brand      of canned tuna that continues to cook and clean fish in the U.S.  In fact, in the      GAO’s 2010 report, it was determined that canneries like Bumble Bee and      Chicken of the Sea which outsource fish cleaning jobs to our foreign competitors      compete at about a $7.5 million per year advantage over StarKist which cooks      and cleans its fish in American Samoa.      As a result of StarKist’s disadvantage in the U.S. marketplace, the company has      been forced to lay off workers in American Samoa.  Coupled with Chicken of the      Sea’s closure, American Samoa’s economy has not been able to absorb the rapid      minimum wage increases mandated by federal law.  Also, due to American      Samoa’s remote location, limited land, and infrequent air and shipping services, it      has been difficult to diversify American Samoa’s economy but I have pledged to      do what I can to halt further minimum wage increases in order to provide the      American Samoa Government (ASG) with the time it needs to put an action plan      in place, although I do not believe minimum wage is the sole cause of ASG’s      problems.      In fact, the GAO openly admits that “it is difficult to distinguish between the      effects of minimum wage increases and the effects of other factors, including the      global recession beginning in 2009, fluctuations in energy prices, [and] global      trade liberalization.” The GAO also points out local factors that have worsened      ASG’s position.        Also of note, Tri-Marine, one of the world’s largest tuna supply companies,      purchased the Chicken of the Sea facility and intends to open up a fully      operational cannery in American Samoa, despite three minimum wage increases      thus far.  However, like StarKist, Tri-Marine will not be able to absorb further      increases in the face of local and global challenges.      Considering these factors and other complexities, I hope you will work with us to      halt further increases and I hope you will begin this process by holding a hearing      on the GAO’s recently released report.      The Congressman concluded his letter by stating, “I thank you for your consideration, and look forward to working with you.”