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Samoa Requests Wage Hike Delay – Fear Of Starkist Also Leaving

American Samoa Gov. Togiola Tulafono has asked Congress to delay the implementation of higher wage minimums in the U.S. territory, saying the rising wages have already pushed one tuna cannery out of business and may force the shutdown of another.

The governor wrote U.S. Sen. Edward M. Kennedy, chairman of the Senate's labor committee, asking lawmakers to postpone the May 2010 wage increase for one year.

Tulafono, in a letter dated May 12 and released yesterday, explained to Kennedy, D-Mass., that Chicken of the Sea International plans to shut down its COS Samoa Packing plant at the end of September, laying off 2,172 workers.

Chicken of the Sea is due to move its tuna-processing work to Vietnam, where the hourly pay is less than 70 cents, he said.

The governor said the territory's other cannery, StarKist Samoa, which is owned by Dongwon Enterprise Co. of South Korea, plans to eliminate 20 full-time salaried positions and trim hourly workers to cut costs.

The continued operation of the remaining fish processor in the territory is highly doubtful, Tulafono said.

The fish-canning industry directly and indirectly accounts for nearly three-fifths of all economic activity in American Samoa.

The wage minimums in the U.S. territory and in the U.S. Commonwealth of the Northern Mariana Islands used to be much lower than the federal standards. But the U.S. last year adopted a law mandating the wage minimums be incrementally increased until they match the federal rate.

Since last year, the rate in American Samoa has been climbing by 50 cents every six months. It will stop rising when it hits $7.25.

In American Samoa, minimum wage rates varied by industry, ranging from less than $4 to just over $5.

The next rate increase is scheduled next week. On Monday, the minimum wage for American Samoa's tuna canneries — the largest employer in the territory — will increase from $4.26 to $4.76 per hour. Workers in government jobs will see their hourly minimum wage rise from $3.91 to $4.41.

Tulafono said delaying the May 2010 wage hike would give Congress time to evaluate the results of a Government Accountability Office report on how the increases have affected American Samoa and the CNMI.

That report is due April 15, 2010.