Not including the ASG semi autonomous agencies, American Samoa Government employees were paid an average straight-time wage of $9.32 per hour for 4,486 employees, or an average annual salary of $19,387.35 excluding fringe benefits, according to preliminary analysis data, which is included in the Commerce Department’s second quarter performance report for fiscal year 2014.

The performance report, which covers Jan. 1- Mar. 31, 2014 — states that DOC used the ASG Employees Hourly/Salary Report submitted on Mar. 6, 2014 that was prepared by the Department of Human Resources.

Current minimum wage for the Government Employees Industry is $4.41 per hour and is slated to increase to $4.91 on Sept. 30, 2015 — when the next minimum wage hikes for all local industries go into effect.

An ASG analysis revealed that the next wage hike at $4.91 per hour would directly affect 578 employees or 12.9%of the ASG workforce, according to the performance report and noted  that an increase above $4.91 per hour “would create an unacceptably large increase in expenditures for which there is no matching revenue.”

The performance report also says that ASG would have to cover this deficit by substantially curtailing employment and the services it provides.

“In light of ASG’s cash flow problems and revenue collections, our position remains as it has been in the past years: that an increase in the minimum wage for the ASG will have a drastic budget impact on future expenditures and contribute to an already critical cash flow problem,” it says.

The preliminary analysis report was incorporated into a DOC Position Paper entitled “Impact on the Territory’s Economy If the Minimum wage increase goes into effect”. The analysis report was presented to Michael J. Simon, with the U.S. Government Accountability Office, to support ASG’s position that it will be impossible to pay and maintain a higher wage bill without cutting jobs.

The Position Paper points out that since the closure of COS Samoa Packing in 2009, there has been a major structure and compositional change in American Samoa’s economy in terms of employment structure where both ASG and the private sector — excluding the single industry i.e. tuna canneries — make up 88% of local employment for 2012, while the cannery only accounts for 12%.

According to the Position Paper, raising the minimum wage by another 50 cents per hour — as required by federal law— “will worsen” American Samoa’s economic situation.

While diversifying the local economy is paramount at this point, DOC said it’s “impossible to attract investment and to expand our export base because we are competing against countries that are paying far cheaper minimum wage than us, and at the same time can access the U.S. market either duty free or paying a very low import duty into the U.S.”

“It is critical that existing federal mandates regarding minimum wage need to be halted and phased out in order to rejuvenate our economy through creating goods and services via job opportunities,” the DOC report says.

GAO — the investigative arm of the U.S. Congress — released on Mar. 31st this year, the federally required study on the impact of minimum wage increases for American Samoa and the Commonwealth of the Northern Mariana Islands.

Gov. Lolo Matalasi Moliga’s letter to GAO on the impact study was included in the GAO report. Lolo said the findings in the report are “derived from a narrow spectrum of information sources” and does not clearly tell the whole story of what the territory faces.

The governor also says that the next minimum wage hike set for 2015 “is nothing but a prescription for total economic ruin for the territory of American Samoa”.

(See Samoa News edition Apr. 2 for details of the governor’s letter)