Gov. Togiola tells U.S. Congress minimum wage increase will destroy AS economy

(UTULEI: Sunday, September 25, 2011) - In Washington DC, Governor Togiola Tulafono appeared at a congressional hearing on Friday, September 23, 2011 to testify that the continued minimum wage increase will destroy American Samoa's economy.

Governor Togiola gave the following testimony before the Subcommittee on Fisheries, Wildlife, Oceans and Insular Affairs of the Committee on Natural Resources:

Testimony of
Togiola T.A. Tulafono
Governor of American Samoa
The Subcommittee on Fisheries, Wildlife, Oceans and Insular Affairs
The Committee on Natural Resources - U.S. Congress
On The Impact of Minimum Wage Increases on American Samoa
September 23, 2011

The Governor: "Continued Minimum Wage Increases Will Destroy American Samoa's Economy."

Mr. Chairman and members of the Committee, thank you for your invitation to testify in your hearing today. I am honored to be here and pleased to testify on a matter of grave importance to American Samoa.

As you might all appreciate, it is very difficult for us in American Samoa to pick up and come all the way to Washington DC to present a 5 minute testimony. But the opportunity to demonstrate to the U.S. Congress how serious this issue is for us cannot be dismissed because of the cost and the distance. It is an opportunity that we cannot afford to ignore or squander.

I have submitted a substantial and quite a detailed written testimony in support of my 5 minute presentation here, with the understanding and expectation that:
- This opportunity to address this very important issue before this subcommittee of the U.S. Congress cannot end with this detailed report.
-This Territory of the United States, American Samoa, needs some advice from this Subcommittee, and from this Congress.
-We are watching our economy burn down. We know what to do to stop it. We need to bring the aggressive wage costs decreed by the Federal Government under control. But we are ordered not to interfere.
-Our job market is being torched. Our businesses are being depressed. Our hope for growth has been driven away. We are still ordered not to interfere. Our people live in the middle of the South Pacific Ocean, with no place to seek refuge in any economy other than our own.

Our question is this: How much does our government expect us to suffer, until we have to stand up for our survival? At what point does it expect us to strike out to preserve our well being, because we need to live? We are in a far off place. We need to know. And if silence follows now, we have our answer.

Having said that, let me quickly summarize where we are today. After three increments of $.50 to the minimum wages in American Samoa, a cannery that once employed over 2,000 people closed; thousands of jobs had been lost at all levels of employment in American Samoa, and the economic conditions in the territory continue to decline. That is basically why, to me, a 5 minute opportunity is priceless, to demonstrate to you how critical this situation is, and how important it is for American Samoa to have permanent and enduring solutions to these issues.

So, while I respect very much the professional work of GAO and the limitations upon their authority to investigate these matters, I would be remiss if I did not continue to emphasize the concerns I have conveyed to them regarding what I felt should have been addressed in the report before you.

In my communication of May 25, 2011 to GAO with respect to the draft report (GAO-11-427) on the effects of the first three of ten minimum wage increases on American Samoa, I expressed general agreement with the GAO's findings, while also citing some fundamental concerns where I felt the report fell short. GAO did note these concerns in its final report, but, for the most part, they were not addressed in the final GAO report for reasons having mainly to do with the limitations of its Congressional mandate in requesting that report.

I remain concerned that this GAO report does not adequately, succinctly or clearly convey the magnitude of the worsening economic disaster in American Samoa that has resulted primarily from the imposition of the 2007 US minimum wage mandate. Please allow me to restate those specific concerns about the report:

It continues to understate American Samoa's employment losses due substantially to the initial increases in the minimum wage.

It continues to downplay the minimum wage as only one of several factors influencing the growing economic depression in American Samoa. This is despite the fact that its own data demonstrates that workers and major employers fault the minimum wage for adverse economic effects to date and expect economic conditions to worsen primarily as a result of continuing increases in the minimum wage.

It ignores the fact that the minimum wage increases have adversely affected the entire economy and not just the canneries.

It ignores the fact that the indirect effects of the cannery employment losses have not yet run their course as they often require several years to fully materialize.

It downplays the fact that the damage to date is from only three of ten scheduled minimum wage increases.

It ignores the evidence that continued increases in the minimum wage make economic recovery increasingly unlikely.

It is silent on the real possibility that American Samoa could be left substantially without a private sector economic base except for some limited visitor industry and fisheries activities. American Samoa's economic base would then essentially be the federal government expenditures in the Territory.

Mr. Chairman and the Honorable committee, this is clearly NOT the economic future American Samoa wants or seeks. We want to have a strong economic base supported by industry and manufacturing jobs. We want wages in American Samoa to grow with sustainable economic growth that continues to support existing as well as new jobs created by such economic growth. We need to design a system that will permit us to do that, and we need your wise advice to do it. Even in this temporary suspension of the increases, the uncertainty of what will happen and the likelihood of further increases under the present law is damaging because we are losing opportunities that could have been cultivated or harnessed, if we were certain that there is an appropriate solution in the making. NO ONE IS WILLING TO INVEST IN THIS KIND OF BUSINESS CLIMATE. That's why I am asking for immediate positive action to stop any further escalation of minimum wage in American Samoa, with proposed provisions for a proper study of how to accomplish our desired goals towards rebuilding a sustainable economy for American Samoa that will make it less dependent only on federal grants.

I truly hope that my next appearance before your committee or another Congressional committee will be to testify in support of legislation that will install for us a system that will determine appropriate minimum wages that will support our economy and create jobs for our people.

Thank you again for my priceless 5 minute opportunity.



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