The Federal Minimum Wage and American Samoa

The Federal Minimum Wage
and American Samoa
Updated April 8, 2008
William G. Whittaker
Specialist in Labor Economics
Domestic Social Policy Division

The Federal Minimum Wage and American Samoa
In 1938, when the Fair Labor Standards Act (FLSA) was adopted, Congress
appears to have given little consideration as to how its provisions might affect the
various possessions and territories of the United States. The first off-shore
jurisdiction to request exception from the FLSA was Puerto Rico, which, in 1940,
along with the Virgin Islands, was given an exception under the act. Special industry
committees were appointed to visit the Caribbean islands and to recommend
minimum wage rates consistent with the insular economies.
In the wake of World War II, new attention was focused upon the Pacific
islands. American Samoa, basically, had no industry other than harvesting of copra,
the dried meat of the coconut, and an economy very different from the mainland. In
the early 1950s, the Department of the Interior contracted with the Van Camp Sea
Food Company to move onto the island and develop a fish processing plant.
However, the FLSA minimum wage was regarded as too high to be competitive and,
in 1956, Van Camp appealed to Congress to extend the Puerto Rican special industry
committee (SIC) model to American Samoa. Thereafter, the Secretary of Labor would
review economic conditions and establish minimum rates.
The SICs were admonished to reach “as rapidly as is economically feasible
without substantially curtailing employment” the American standard under the FLSA.
While the rates established by the committees were lower than those prevailing on
the mainland, the device was regarded as temporary. During the 1980s and 1990s,
special treatment of Puerto Rico and the Virgin Islands was phased out, and those
islands came fully under the FLSA. Of the three jurisdictions, only American Samoa
remained under the SIC structure.
Fish processing has become Samoa’s primary private-sector industry. In early
2007, the minimum wage for the industry was $3.26 per hour: the federal minimum
wage was $5.15 per hour. However, in late May 2007, Congress adopted H.R. 2206
(P.L. 110-28) which, through a series of step increases over several years, would raise
the federal minimum wage to $7.25 per hour. At the same time, the SIC for
American Samoa was abolished and the insular minimum wage was raised (through
a more prolonged series of step increases) until the federal minimum level, whatever
that may ultimately become, might be reached.
At least since the 1950s, the companies involved in fish processing have
suggested that, were the minimum wage to be raised to the national rate, they might
consider leaving the island and operating out of a country where wage rates were
more favorable. Now, with the new wage rate for American Samoa in effect, what
will be the reaction of the tuna canning companies? Will they improve technology
to raise labor productivity, change the type of production done in Samoa, absorb the
new rates — or migrate? And, if they were to migrate, what alternative employment
might be available for the people of American Samoa?
This report will be updated as warranted.

In troduction ......................................................1
The FLSA and Insular Coverage......................................2
Application to American Samoa..................................3
The 1955 FLSA Amendments................................3
The 1956 FLSA Amendments in the House.....................4
The Senate Hearings of 1956.................................8
Creating a Special Industry Committee Structure (1956)...............9
The Minimum Wage in American Samoa (1956-1986)...................11
The Structure and Functions of the Committee......................11
Appointment of Industry Committee No. 1 (1957)...................12
Thirty Years of Escalating Wages (ca. 1958-1986)...................13
Special Industry Committee No. 17 (1986).............................15
Appointment of the Committee Members..........................15
Guidance from the Department of Labor.......................15
Findings of the Committee..................................16
Congress v. the Special Industry Committee........................18
Special Industry Committee No. 18 (1987).............................19
A New Committee Appointed...................................19
The New Committee’s Recommendations.........................20
Minimum Wage in American Samoa (1987-2007)...................21
Improving the Quality of Evidence...............................21
Affirming Substantial Documentary Evidence (1974)............21
Controversy Over the Minimum Wage Rate (1990)..............22
New Legislation (1990)....................................23
Hearings on the Samoan Minimum Wage (1991-1992)...............25
Comments from Public Officials.............................25
Comments from the Industrial Sector.........................26
Rejecting the Special Industry Committee System (2007).............28
Concluding Summary.............................................30
Appendix .......................................................33
List of Tables
Table 1, Part A. Compilation of Wage Rates Established by
the Various Special Industry Committees for American Samoa.........33
Table 1, Part B. Compilation of Wage Rates Established by
the Various Special Industry Committees for American Samoa.........36

The Federal Minimum Wage
and American Samoa
The Samoan archipelago, a series of sparsely populated islands in the south
Pacific, is located about 2,300 miles southwest of Hawaii. The area is divided into
two parts: Western Samoa, formerly British and now independent; and American
Samoa, a cluster of about half a dozen islands governed from Pago Pago on the island
of Tutuila. The population of the American group, although rising rapidly, is
estimated to be about 60,000.1
Contacts between the Samoan islands and the United States developed late inth
the 19 century, but they were infrequent. A coaling station was opened at Pago
Pago, but only in the wake of the Spanish-American War (1898) did the American
presence become permanent. In 1900, President William McKinley “directed the
Navy to assume responsibility for Eastern (thereafter, American) Samoa.”2 His
directive remained in effect until 1951, when the naval station was closed and
jurisdiction was transferred to the U.S. Department of the Interior. During the middle
1950s, an insular constitutional government was developed; in 1960, a constitution
was formally approved.
The islands are mountainous, the climate tropical. There is little land suitable
for commercial agriculture. Fruits and vegetables, along with various root crops, are
grown locally and consumed largely by the families of the growers.3 More diverse
products are imported. The harbor at Pago Pago provided, during earlier periods, a
naval base, but now it appears to be especially notable as a tuna port. Although some
tourism has developed over the years, the relative isolation of American Samoa has
rendered the islands a somewhat exotic destination.
Fish processing is Samoa’s single primary private-sector industry. Under the
Fair Labor Standards Act (FLSA), the insular minimum wage has been fixed by the
Secretary of Labor through a Special Industry Committee (SIC). In early 2007, the

1 U.S. Department of Labor, Employment Standards Administration, Wage and Hour
Division, Economic Report: The Minimum Wage in American Samoa, 2005, p. 8. (Cited
hereafter as DOL Economic Report, and by date. )
2 Ruth G. Van Cleve, The Office of Territorial Affairs, New York, Praeger Publishers, 1974,
pp. 60-65.
3 See DOL Economic Report, 2003, p. 7, and the essay by Howard J. Critchfield, “Samoa,”
in The Encyclopedia Americana, International Edition (Danbury, Conn., Grolier
Incorporated, 2001), Vol. 24, pp. 180-183.

rate for the tuna canneries was $3.26 per hour; the federal rate, $5.15 per hour. Then,
in late May, Congress adopted a new minimum wage standard: to escalate to $7.25
per hour over several years. At the same time, the SIC system was abolished and the
insular rate was raised, though in more extended steps, until it might coincide with
the federal rate.4
The FLSA and Insular Coverage
In 1938, Congress enacted the Fair Labor Standards Act (FLSA) — a measure
designed to provide minimum wages and overtime pay, to limit child labor, and to
restrict industrial homework. Although the act would seem to have applied to the
states and the territories (to Puerto Rico, the Virgin Islands, etc.), little thought
appears to have been given to how that act might be applied to jurisdictions that
were, in significant ways, economically different from the U.S. mainland.
Shortly after its passage, the act was modified. In response to industry
complaints, Puerto Rico and the Virgin Islands were exempted from the full force of
the act (1940), being placed under a special industry committee (SIC) structure.5
Thus, Puerto Rico and the Virgin Islands were set aside for special treatment under
the FLSA — a process that would continue, in part, for the next 50 years.6
Under Section 8 of the original enactment, the Department of Labor (DOL) was
required, “from time to time,” to convene an industry committee for each industry
covered under the act and, through the committee, to “recommend” a rate (or rates)
of wages that might be higher than those established by the act. Section 8(b) states:
The industry committee shall investigate conditions in the industry and the
committee ... may hear such witnesses and receive such evidence as may be
necessary or appropriate.... The committee shall recommend to the Administrator
the highest minimum wage rates for the industry which it determines, having due
regard to economic and competitive conditions, will not substantially curtail
employment in the industry. (Emphasis added.)
Rates the committee could recommend were not to exceed the statutory standard (40
cents per hour). The Administrator was admonished to “consider among other
relevant factors ... competitive conditions as affected by transportation, living, and
production costs....” Discretion rested with the Administrator.7

4 Federal Record, June 13, 2007, p. 32683. See Public Law 110-28.
5 P.L. 76-667, Title IV, Section 3 (June 26, 1940).
6 Guam was covered under the FLSA in 1938 — though the act may not have been enforced
there until after World War II. The Commonwealth of the Northern Mariana Islands has
maintained insular control over its minimum wage. The SICs were gradually phased out
during the late 1980s and early 1990s — except for American Samoa.
7 See Section 8 of P.L. 75-718. Section 5, of the original enactment, established the rules
under which the committee would function.

Application to American Samoa
Following World War II, an unrelated circumstance brought American Samoa
to governmental attention. The issue was a 1948 decision of the U.S. Supreme
Court: Vermilya-Brown Co. v. Connell [335 U.S. 377 (1948)]. It involved
application of the FLSA to employees of American contractors building a military
facility for the United States in Bermuda (part of Great Britain). In its decision, inter
alia, the Court identified a “possession” covered under the act as including “Puerto
Rico, Guam, the guano islands, Samoa and the Virgin Islands.”8 Even in dissent,
Justice Jackson stated that a U.S. facility in Bermuda was of a character different
from that of “our possessions” as specified by the Court’s majority — and, thus,
covered by the act.9
In 1953, development of a tuna canning operation commenced in American
Samoa, an industry which quickly became the island’s primary private-sector
employer. With the Supreme Court decision in Vermilya-Brown, Samoan industry
became gradually — and increasingly — aware of the likely enforcement of
minimum wage and other FLSA standards.
The 1955 FLSA Amendments. In 1955, William D. Moore, Jr., Foreign
Production Manager of the Van Camp Sea Food Co., wrote to Representative
Graham Barden (D-NC), chair of the House Committee on Labor and Education,
urging that “Samoa should be exempt” from the FLSA. He emphasized that few
industries were located in the islands. “This company, at the behest of the
Department of Interior, has gone to Pago Pago for the purpose of endeavoring to
establish a fishery and a fish processing and canning plant. It is on a trial basis,” he
suggested. “In the first 12 months of our experiment, it has been found that the
American Samoans are adaptable to catching, cleaning, and processing fish and
seafood, but it takes 3 to 5 people to do and perform what one American laborer or
worker in the States can do.” If federal wage/hour standards continue to apply in
Samoa, “... there will be no incentive for American concerns to move in and build up10
the island.”
Further, Orme Lewis, Assistant Secretary of the Interior (DOI) wrote suggesting
“the need for special consideration” for American Samoa. He explained to chairman
Barden that Samoans “have clung to their ancient ways of life and their traditional
forms of economic and social organization.” Thus, “...any justification for protective
labor legislation in American Samoa should be cast in entirely different terms.”

8 Vermilya-Brown Co., Inc., et al v. Connell et al., 335 U.S. 388 (1948).
9 Ibid., pp. 391-392.
10 U.S. Congress, House of Representatives, Committee on Education and Labor,
Amendment to Increase the Minimum Wage. Hearings, 84th Cong., 1st Sess., June 1, 1955,
and forward Washington, U.S. Govt. Print. Off., 1955, pp. 1180-1181. (Cited hereafter as
House Hearing, 1955.) With Moore’s comments was a resolution from the Fono (the insular
legislature) urging an exemption from the FLSA.

Lewis urged that the Secretary of Labor be allowed to “establish minimum wages for
workers in American Samoa” as he may find that “economic conditions warrant.”11
C. S. Thomas, Secretary of the Navy, wrote to House Speaker Sam Rayburn to
urge amendment of the FLSA to include a new provision for off-shore jurisdictions.
Thomas reviewed the Vermilya-Brown decision and the likely impact if “...wage
payments on the part of contractors performing work for the Department of Defense
[were] to be made at higher wage scales than those generally prevailing in the area.”
These wages, Thomas stated, “would obviously distort the local economy and, in
some instances, objections have been received from foreign governments.” Thomas
advised the Speaker: “In addition, such payment would result in higher costs to the
United States.”12 But, Representative Barden decided not to act “at this time.”13
The 1956 FLSA Amendments in the House. It was with Vermilya-Brown
in mind that representatives of Van Camp Sea Foods appeared before the Senate
Committee on Labor and Public Welfare, May 1956, seeking FLSA amendment.
The Industry’s Perspective. William Moore spoke for the company. In

1952, DOI had circulated an invitation to bid on an unused facility at Pago Pago.

Moore went out to the islands and presented a “discouraging” report, noting that the
supply of fish was not apparent and that the local refrigeration plant (government
owned) was “in rather poor repair.” Further, Moore stated: “We were aware, or soon
learned during our survey, that the wage-and-hour laws applied to American Samoa
and it was very unlikely, although we had not gotten into any operation at that time,
whether or not our company could pay the minimum wages as required in the United
Nonetheless, Van Camp bid on the operation and was awarded “a 5-year lease
with the provision that the first year would be an experimental period.”14 Under the
lease signed with the government of American Samoa, the firm agreed “... to provide
for improvement of the economy of American Samoa by developing the skills
relating to fishing and fish processing among the Samoans, by providing local
income through wages, and by insuring a local supply of raw, frozen, and processed

11 House Hearing, 1955, pp. 1179-1180.
12 House Hearings, 1955, pp. 1182-1185.
13 See U.S. Congress, House, Committee on Education and Labor, Amending the Fair Labor
Standards Act to Make the Minimum Wage $1 an Hour Effective March 1, 1956, Report Tothst
Accompany H.R. 7214, Report No. 1095, 84 Cong., 1 Sess., July 11, 1995, p. 2.
14 U.S. Congress. House, Committee on Education and Labor, Minimum Wages in Certain
Territories, Possessions, and Oversea Areas of the United States, 84th Cong., 2nd Sess.,
February 15, 1956, and forward, pp. 5-7. (Cited hereafter as House Hearings, 1956.) The
original firm had been started by Harold Gatty, an Australian, and had gone bankrupt. In

1956, Van Camp was still the only firm operating in Pago Pago. See also pp. 58-59.

Moore explained that, though the company was operating at a loss, the loss was
gradually diminishing and that the company was “...the only industry that has come
into the island from the outside.”15
In 1956, the company had about 300 employees — reportedly a mixture of
British and American Samoan.16 Their productivity, it was explained, was somewhat
less than cannery workers on the mainland. “Climatic conditions are not particularly
conducive to energy and activities.” The temperature runs about 70 to 90 degrees
throughout the year — but there is high humidity: upward of 80%. In terms of
turnover, Moore stated, “... I am quite sure that the changeover in personnel there is
less than it is stateside.” He added: “Most of our employees are women.”17
Moore then turned to the wage/hour law, stating that the cannery paid “from 27
cents an hour to $1 an hour, which is only paid 1 employee.” Representative James
Roosevelt (D-CA) then suggested: “You come before this committee to establish the
fact that you are having difficulty making any profit, and that this [payment of not
less than the minimum wage] would seriously impair your profit picture or your
chances of making a profit....” The witness, Roosevelt stated, comes as something of
“a special pleader” for his company. “Therefore, it seems to me incumbent that you
show us what effect it would have, in some relation to your cost of operation, or what
it would do to you if you had to pay, let us say, 75 cents an hour, or $1 an hour, or
whatever the wage law would require.”18
Roosevelt then turned to another issue: What would happen to regular U.S.
workers in canning factories on the West Coast were the wage/hour statute modified
for American Samoa? Moore responded that, from January 1954 through January
1956, “the total production was 3 ½ percent of the total production of Van Camp’s
stateside plants for the same period.” Roosevelt was not entirely satisfied.
Mr. ROOSEVELT. (...) What I am trying to get at is that I want to make awfully
sure that I understand from you that this is not going to be a substantial part of
your operation, the plans of your company and you and everybody else are such
that they are not aimed at making this a substantial part of your production.
Mr. MOORE. That is true, it is not going to be a substantial part of our19
Moore stated: “There may be some advantages gained on the one hand, but these
advantages are definitely offset by additional expenses that we do not normally have
stateside.”20 Moore pointed to costs for the “the transportation of cans and cartons,
and oil, and salt, and labels, and everything that goes into the product, and everything

15 House Hearings, 1956, p. 9.
16 House Hearings, 1956, p. 12.
17 House Hearings, 1956, pp. 13-14.
18 House Hearings, 1956, pp. 15-16.
19 House Hearings, 1956, pp. 17-19.
20 House Hearings, 1956, p. 19.

has to be transported to Samoa.”21 As for wages, Moore observed, “we have a plan
in effect now” — a 2 cent an hour raise annually — “that will increase those
Roosevelt further questioned Moore on his statement that closing the cannery
would have a deleterious effect on the general economy of the island and would deter
other firms from entering insular commerce. Might that be a threat, he reasoned?
“By implication,” he suggested, “that means to me that if you cannot get this relief
that you would feel that it would be impossible for you to continue the operation....”
Representative Roosevelt stated:
In other words, what you have in essence said is that this is important to the
economy there, and which I believe it is, and on the other hand, I have to be
shown that without this relief it would not be possible for you to operate. ... I for
one, would want — and I think the committee would want — some information
to back up the statement that you would not consider this possible of
continuation unless the relief which you seek is granted.
Moore queried: “Are you asking that we give you a statement that says that unless we
get this we will not continue?” Roosevelt suggested that the interpretation had been
correct, to which Moore answered:
Mr. MOORE. It would put our costs out of line.
Mr. ROOSEVELT. And therefore, in order to maintain the operation at
approximately the same cost as your west-coast operation, you would have to
have this relief in order to stay in the islands.23
Mr. MOORE. That is right, sir.
Support from Officials of Government. As the hearing progressed, there
was considerable speculation about the impact of the minimum wage for Samoan
Phil Landrum (D-GA) asked Wayne Aspinall (D-CO), a witness who had visited
Samoa, what in his judgment would happen to Van Camp Seafood Co. if the
minimum wage were enforced in the islands. “It would fail,” Aspinall stated. “It
would close up and these people would be put out of employment.”24 But, Aspinall
acknowledged that Samoa has certain “cultural advancements or attributes” which
are, “to me ... necessary to have retained among those people. Just how far,” he
added (in reference to the Samoan way of life, or fa’asamoa), “you can go in bringing
in industries and uprooting their traditional economy is a question for continuing
study.”25 Representative Orvin B. Fjare (R-MT) wondered if people of such “deeply

21 House Hearings, 1956, p. 16.
22 House Hearings, 1956, p. 19.
23 House Hearings, 1956, pp. 21-22.
24 House Hearings, 1956, p. 37.
25 House Hearings, 1956, p. 39.

seated customs” might not “[p]erhaps rebel at the so-called curse of civilization
moving in on them.”26
Roosevelt, from his understanding of the bill under consideration, stated that
“they are not asking for complete exemption from the wage and hour law. We are
using the same machinery which is already in effect ... in Puerto Rico, so that the
wage scale will be reviewed and established from time to time.” (Italics added.)
Roosevelt suggested that “the possibility exists, for instance, that another industry
might come into the area, and we certainly would not want to just make a blanket
exemption and invite industry to come down and exploit these people.”27
“It will readily be seen,” said William Arnold, Assistant Director, Office of
Territories, DOI, “... that any application of stateside wage scales to industrial activity
in American Samoa would completely disrupt the local economy, impose price
inflation upon the people and create serious personnel and financial problems for the
territorial government, to say nothing of the impact which such a situation would
exert on the prevailing economic conditions of neighboring islands and territories.”28
A letter from Richard Barrett Lowe, Governor of American Samoa, was read into the
record. The Governor explained the modest character of economic life in the islands
and stated, as his first choice, placing decisions concerning the minimum wage in the
hands of the Secretary of Labor. He urged Congress, “at an early date,” to enact
legislation that will “exempt American Samoa from the Fair Labor Standards Act.”29
The Views of Organized Labor. Walter J. Mason, AFL-CIO legislative
representative, took a different approach. He pointed to the “first and foremost
challenge facing this committee” as the removal of “unnecessary and unjust
exemptions now provided in the law.” He chose not to support further exemptions.
Turning to the islands, Mason stated that a Samoan exemption “would simply
feed grist to the mills of the Communist propaganda machine. Our relationship with
the peoples in underdeveloped areas,” especially those under U.S. administration,
“must be exemplary and beyond criticism....”30 If an exemption were made for
American Samoa, he stated, it might “provide the precedent to permit interested
parties to request other exemptions from coverage under the act” — that could31

“precipitate a virtually endless chain of requests” from one group or another.
26 House Hearings, 1956, pp. 40-41. The matter of fa’asamoa has continued to be an issue
through the late 1990s and into the 21st century.
27 House Hearings, 1956, pp. 39-40. As Representative Aspinall was departing, he as asked
about the competitive impact for mainland production of having low-wage labor in the
islands. Roosevelt suggested that, “at this moment,” there really is not that sort of
competition. See dialogue on page 42.
28 House Hearings, 1956, pp. 84-85.
29 House Hearings, 1956, pp. 92-93.
30 House Hearings, 1956, pp. 149-150.
31 House Hearings, 1956, pp. 150-151.

Mason opposed making changes in the FLSA that “would make Samoa ... a
refuge for runaway shops.” Further, he objected to placing the “entire discretion”
within the hands of the Secretary of Labor.32 Finally, he saw no excuse for
condoning past violations of law (non-payment of the minimum wage) by “extending
retroactive immunity from prosecution to those who knowingly failed to comply with
the act’s requirements.”33
Representative Sam Coon (R-OR) asked if Mason would insist on payment of
“the minimum wage of 75 cents even though it would put them out of business....”
Mason replied: “I want them to stay in business and make money. But I also want
to see that the Samoan workers get a fair wage....” Coon referred to the insular
temperature as a debilitating force. Mason responded: “What I am saying is that we
should take a look at it and consider all aspects of what the repercussions may be....”
He affirmed: “...I do not think there is any need for hasty action....”34
If other options were not sustainable, Roosevelt questioned, what course might
be acceptable to labor. Mason, reluctantly, suggested the Virgin Islands formula —
with committees set up on “a tripartite basis so that all parties concerned will take a
part in arriving at a fair determination of what the minimum wage should be.” Again:
“If Samoa should be exempted from the statutory minimum, I believe the procedure
should follow along the same lines that we have for the Virgin Islands.”35
Others voiced economic concerns. The Seafarers International Union explained
that Van Camp tuna canneries located in San Diego and Terminal Island, Calif.,
“employ approximately 2,000 tuna-cannery workers” and pay $1.65 and $1.85 for
women and men respectively. Tuna, from low-wage labor in Samoa, “enter the
continental United States duty free and are sold to consumers under the same Van
Camp label as tuna canned domestically. This,” he suggested, “is unfair competition
to the domestic tuna industry and its workers.”36 And, Representative Earl Chudoff
(D-PA), suggested as a possibility that “...goods would be manufactured in a
possession at very cheap labor rates and would be sent into the United States and sold
cheaper than our own people could manufacture them....” Chudoff was open to the
establishment of “industry boards or something” to provide for a fair labor scale in
The Senate Hearings of 1956. Moore, spokesman for Van Camp Sea
Foods, returned as lead witness in the Senate. He declared the existing minimum
wage (75 cents per hour) “unrealistic” and “unwarranted” and affirmed that it would

32 House Hearings, 1956, p. 150.
33 House Hearings, 1956, p. 152.
34 House Hearings, 1956, p. 164-165.
35 House Hearings, 1956, pp. 155-156.
36 House Hearings, 1956, p. 365.
37 House Hearings, 1956, p. 166.

“unquestionably ... have a deleterious effect upon the economic and social structure
of the islands.” Moore then reviewed the “substantial losses” of prior years.38
The difference in labor costs is attributed, he suggested, to efficiency,
reiterating: “... it takes from 3 to 5 Samoans to produce what 1 stateside employee
can produce.”39 Moore claimed: “If Van Camp is compelled to pay $1 per hour,
under these circumstances and not released of its liabilities under the act, it cannot
go forward with its plans for developing the fishery and processing plant....”
Notwithstanding the House hearings, Moore affirmed: “We know of no objection
from organized labor.” He stated further that Van Camp “ must be relieved from its
liabilities under existing law” and from costs that a $1 dollar minimum will impose.40
Senator Paul Douglas (D-IL) observed: “I never thought of Samoa as an area
in which the Fair Labor Standards Act would be applied....” Douglas questioned
whether Samoa was actually covered by the act. Linton Collins, counsel for Van
Camp, replied: “Samoa is now covered under the definition of ‘State’ in the bill.”
Following discussion, including reference to the Vermilya-Brown case, Senator
Douglas stated: “This is news to me. I never thought the Fair Labor Standards Act
applied to Samoa.” Collins replied: “... I don’t think the Congress had that in mind
when the act of 1938 was passed, but I think in the definition of ‘State’ it had been
left there and there was never been (sic.) any change....”41
Creating a Special Industry Committee Structure (1956)
In May of 1956, Senator H. Alexander Smith (R-NJ), the ranking Member of
the Committee on Labor and Public Welfare, introduced S. 3956 — a bill to amend
the FLSA.42 On July 11, the bill was called up in the Senate. Senator John Kennedy
(D-MA) explained that the measure, which had received unanimous support from the
committee, would “provide means for adjusting the minimum wage in Samoa.” It
further proposed “exemption from liability [for] those employers who ... have not
observed the Fair Labor Standards Act.” Kennedy explained: “We feel that the
provisions of the bill are acceptable, and are essential if the Samoan economy is to
continue to operate.”43
There followed a dialogue between Senator Spessard Holland (D-FL) and
Senator Kennedy.

38 U.S. Congress. Senate, Subcommittee on Labor, Committee on Labor and Public Welfare,
Amending the Fair Labor Standards Act of 1938, 84th Cong., 2nd Sess., May 8, 1956, and
forward, p. 387. (Cited, hereafter, as Senate Hearings, 1956.)
39 Senate Hearings, 1956, p. 388.
40 Senate Hearings, 1956, pp. 390-391.
41 Senate Hearings, 1956, pp. 392-393. See also the discussion on p. 442.
42 Congressional Record, May 29, 1956, p. 9147.
43 Congressional Record, July 11, 1956, p. 12303.

Mr. HOLLAND. Is it not true that the rate of pay which is maintained in
the one industry, which I believe is the sea-food canning industry —
Mr. KENNEDY. The Senator is correct.
Mr. HOLLAND. Has been fixed by reference to the request of the
Department of Defense, which is the largest employer of labor in American
Samoa, and which has not wanted to have any level of pay come into the picture
which would disturb their ability to continue to operate as they are operating, and
the general ability of the little island to preserve its economy on the present
level? Is that correct?
Mr. KENNEDY. The Senator is correct. As the Senator knows, the
company which is engaged in the industry to which he refers has been operating
at a loss, even with the present wage scale. I think the statement of the Senator
from Florida is correct.
And Kennedy explained: “... passage of the bill would also free employers of liability
to maintain the minimum wage scale, which I think is a satisfactory situation.”44
Without objection, the Smith amendment (modified by the Humphrey amendment)
was adopted by a voice vote — the measure then being dispatched to the House.45
On July 26, 1956, the Samoan bill was called up in the House. Representative
Roosevelt placed a brief statement in the Record and, thereafter, the bill was
adopted.46 The measure was signed by President Dwight Eisenhower (P.L. 84-

1023). 47

44 Congressional Record, July 11, 1956, p. 12303. The reference to a “request of the
Department of Defense” is not entirely clear.
45 Congressional Record, July 11, 1956, pp. 12303-12304. There was a dialogue between
Senator Hubert Humphrey (D-MN) and Senator Smith. There had been concern that the bill
would have impacted Guam and the Panama Canal Zone — but Senator Smith denied such
was his intent. See also U.S. Congress. Senate. Amending the Fair Labor Standards Actthnd
of 1938, as Amended. S.Rept. 2394, 84 Cong., 2. Sess., p. 3.
46 Congressional Record, July 26, 1956, p. 14849. Inter alia, Representative Roosevelt’s
statement for the Record: “I sincerely hope that all interested groups and particularly
organized labor, the Department of State and the Department of Defense will come to a
satisfactory agreement in the intervening months before the new Congress assembles.”
47 President Eisenhower signed the bill reluctantly “...because I am convinced that some
adjustment of the existing provisions of the Fair Labor Standards Act to the Samoan
economy is needed.” But, he added: “... it is my earnest hope that the Congress at its next
session will amend the Fair Labor Standards Act to provide for review by the Secretary of
Labor of determinations of industry committees.” See Public Papers of the Presidents of
the United States: Dwight D. Eisenhower, 1956. National Archives and Records Service,
GPO, 1958, p. 172.

The Minimum Wage in American Samoa (1956-1986)
Taking into account the special economic circumstances existing in American
Samoa, Congress opted to follow the Puerto Rican example. On October 1956, the
first special industry committee (SIC) notice was published in the Federal Register.
The Structure and Functions of the Committee
The SIC fell under the Secretary of Labor (and then, the Administrator of the
Wage and Hour Division). It was stated: “The wage orders issued by the
Administrator must by law give effect to the recommendations of the industry
committees.” The notice, which would largely apply to subsequent committees,
provided the rules for the hearing, the evidentiary requirements, and names (in the
first two cases) the various committee members.
The committee “will be composed of residents of the island or islands where the
employees with respect to whom such committee was appointed are employed” and
of other residents of the United States from outside the affected islands. The
Secretary will appoint “an equal number of persons representing (a) the public, (b)
employees in the industry, and (c) employers in the industry.” The public members
“shall be disinterested, and the Secretary will designate one as chairman.” Further,
it was provided: “An industry committee shall cease to perform further functions
when it has filed with the Administrator its report containing its findings of fact and
recommendations with respect to the matters referred to it....”
Each industry committee is to be furnished a lawyer and an economist “to
advise and assist the committee at all of its meetings.” Any person or association
who “in the judgment of the committee has an interest sufficient to justify”
participation shall be designated “an interested person.” The committee has subpoena
The committee was advised: “No classification shall be made ... and no
minimum wage rate shall be fixed solely on a regional basis or on the basis of age or
sex.” Among factors to be considered were the following:
[c]ompetitive conditions as affected by transportation, living and production
the wages established for work of like or comparable character by collective
labor agreements negotiated between employers and employees by
representatives of their own choosing
the wages paid for work of a like or comparable character by employers who
voluntarily maintain minimum wage standards in the industry
employment and labor conditions and trends ... on the mainland ... including such
items as present and past employment, present wage rates and fringe benefits,
changes in average hourly earnings or wage structure, provisions of collective
bargaining agreements, hours of work, labor turnover, absenteeism, productivity,
learning periods, rejection rates, and similar factors

comparative production costs ... on the mainland, and in foreign countries,
together with the factors responsible for differences
financial conditions and trends ... as reflected in profit and loss statements and
balance sheets
Hardship testimony must be documented. “Testimony on behalf of an employer or
group of employers as to inability to absorb wage increases shall be received in
evidence only if supported by tangible objective data, such as the pertinent profit and
loss statements and balance sheets for a representative period of years....” As noted
above, each committee “shall recommend minimum wages which will reach as
rapidly as is economically feasible without substantially curtailing employment” the
general federal minimum wage. (Emphasis added.)
The committee, charged with investigation of the insular economy, had before
it “an economic report” prepared by the Department of Labor. Once established, the48
committee was to operate on it own initiative.
Appointment of Industry Committee No. 1 (1957)
James Mitchell, Secretary of Labor, appointed the first industry committee for
Samoa on March 20, 1957, admonishing them “to reach as rapidly as is economically
feasible the objective of the minimum wage of $1.00 an hour” (the standard federal
minimum). Where there was variation within an industry, he urged the committee
to “recommend such reasonable classifications ... as it determines to be necessary for
the purpose of fixing for each classification the highest minimum wage rate” that can
be determined for the category. Both DOL and the Congress appear to have been in49
agreement: that the highest possible rate should be reached as quickly as possible.
Samoan industry was divided into four categories — none of which initially
came close to meeting the $1.00 federal minimum. Wage/Hour Administrator
Newell Brown (May 31, 1957) presented the findings in the Federal Register.
Fish Canning and Processing Industry: “This industry shall include the canning,
freezing, preserving or other processing of any kind of fish, shellfish, or other
aquatic forms of animal life and the manufacture of any by-product thereof.”
The wage: not less than 38 cents an hour.
Shipping and Transportation Industry. “This industry shall include the
transportation of passengers and cargo by water or by air, and all activities in
connection therewith, including, but not by way of limitation, the operation of
air terminals, piers, wharves and docks, including stevedoring, storage, and
lighterage operations, and the operation of tourist bureaus and travel and ticket
agencies....” The wage: not less than 40 cents an hour.

48 Federal Register, October 6, 1956, pp. 7669-7672. The economic report, prepared by
DOL, was advisory: it did not control the actual deliberation of the committee.
49 Federal Register, March 26, 1957, p. 1991.

Petroleum Marketing Industry. “This industry shall include the wholesale
marketing and distribution of gasoline, kerosene, lubricating oils, diesel and
marine fuels, and other petroleum, products, including bunkering operations....”
The wage: not less than 45 cents per hour.
Miscellaneous Industries. “Miscellaneous industries shall include all operations
and activities not included in the shipping and transportation industry, the
petroleum marketing industry, or the fish canning and processing industry....”
The wage: not less than 35 cents per hour.
The Federal Register announcement called for a posting of the results (and minimum
wage rates) so that each affected individual would be aware of the wages to which
he or she was entitled.
Thirty Years of Escalating Wages (ca. 1958-1986)
By 1958, the procedure for appointing committees had become standardized.50
Thereafter, very minor changes were effected in the work of the committees. Some
new classifications of employment were added; some were removed. (See Table 1
in the appendix for the evolution of minimum wages.)
In 1961, a further division was made, separating ‘shipping and transportation’
into two categories. Category “A” was reserved for seafaring: “all activities engaged
in by seamen on American vessels which are defined as those vessels documented
or numbered under the laws of the United States.” Category “B” would include all
persons engaged in shipping, transportation and related crafts “other than those”
engaged in seafaring — though such definitions would change from year to year.51
In 1963, a further category was identified: the construction industry. This would
include “... all construction, reconstruction, structural renovations, and demolition,
on public or private account, of buildings, housing, highways and streets, catchments,
dams, and all other structures....” Other categories gradually came under the act. For
example, in 1967, hotels, retail trades, hospitals and educational institutions were
added; in 1969, laundry and dry cleaning, the bottling industry, and printing and
publishing; in 1971, the wholesaling, warehousing, and finance and insurance.
In 1974, Warren D. Landis, then Acting Administrator, Wage and Hour Division
at DOL, proposed “revisions” in the general instructions. It would no longer be
sufficient for “an employer or group of employers” simply to testify “as to inability
to pay the minimum wage rate specified” and, thus, to reduce labor costs. To the
now standard “tangible objective data,” profit and loss statements, etc., a new section

50 Federal Register, March 6, 1958, pp. 1604-1605, and June 6, 1958, p. 3967. Under Public
Law 85-750 (August 25, 1958), the Secretary, “in his discretion, may order an additional
review during any such biennial period.” See Federal Register, October 18, 1958, p. 8056.
51 Federal Register, August 30, 1961, pp. 8101-8102. In 1973, there was a further
restructuring of the categories and, since “no employees were covered in classification A
(Seafaring) in the Shipping and Transportation Industry, this category should be excluded
from this industry and that any seafaring activity” subsequently fall under the category of
miscellaneous. See Federal Register, November 27, 1973, p. 32576.

was added under the title “Evidence.” It affirmed, “Financial statements filed in
accordance with this provision ... shall be certified by an independent public
accountant or shall be sworn to conform to and be consistent with the corresponding
income tax returns covering the same years.”
As for persons who could not be present at the hearing, it was possible to submit
affidavits. “The committee will give such weight to these statements as it considers
appropriate,” it was affirmed, “and the fact that such affiants [affirmations] have not
been subject to cross-examination may be considered, along with other relevant facts,
in assessing the weight to be given such evidence.” (It is not clear how seriously the
various witnesses took this instruction nor, for that matter, how rigorously the
arrangement was carried out.)
In appointing Industry Committee No. 11 in 1974, Secretary Peter Brennan
expanded the scope of the committees to include government workers and others —
reminding the committee that it should recommend the “highest minimum wage rate
or rates” that it determines “will not substantially curtail employment in the
In 1975 and forward into 1976, a new complication arose as the National Labor
Relations Board investigated a contested election in the canning industry. “It is my
concern that the investigations may substantially affect the industry committee
process,” explained Labor Secretary John Dunlop. Thus, he delayed the meeting of
Industry Committee No. 12 through the spring of 1976 — though he recognized the
“possible adverse effects of the delay.”53
In 1978, when Industry Committee No. 13 reported, another complication arose:
namely, the Supreme Court’s decision in National League of Cities v. Usery....” In
that case, the Court held that the minimum wage and overtime provisions of the
FLSA “are not constitutionally applicable to the integral operations of the States and
their political subdivisions in areas of traditional governmental functions.” While
American Samoa was not directly involved in the case, Xavier M. Vela, for the
Department, affirmed that “it is apparent, as a matter of statutory interpretation, that
the restrictions imposed by National League of Cities should be the same in
American Samoa.” But, The League of Cities case would be overturned in Garcia v. San54
Antonio Metropolitan Transit Authority et al. (469 U.S. 528 (1985).
To this point, for nearly 30 years, American Samoa had been under a system of
administrated wage rates. Very gradually, the rates had moved up.

52 Federal Register, July 5, 1974, p. 24713
53 Federal Register, January 27, 1976, p. 3878.
54 Federal Register, June 15, 1978, p. 25816. See National League of Cities v. Usery, 426
U.S. 833 (1976).

Special Industry Committee No. 17 (1986)
On February 25, 1986, Labor Secretary William Brock appointed a new Special
Industry Committee (SIC) No. 17. The instructions to the Committee appear to have
been consistent with prior Committees in use since 1956.55
Appointment of the Committee Members
When announcing appointment of Industry Committee No. 17, Secretary Brock
advised members that Wage/Hour would “prepare an economic report containing the
information which has been assembled pertinent to the matters referred to the
committee.” Further, he stated: “The committee will take official notice of the facts
stated in this report. Parties, however, shall be afforded an opportunity to refute such
facts by evidence received at the hearing.”56 The notice was pro forma, similar to
those issued with each appointment through the years.
In March 1986, the Department produced an economic report, Various
Industries in American Samoa. It opened with a 63 page essay to which 138 pages
of statistics was added.
Guidance from the Department of Labor. In the mid-1980s, insular
population was about 35,600 persons. The labor force was about 12,000 with female
employment increasing steadily. Because of out-migration of workers (especially in
the 20-29 age bracket), a large number of skilled craftsmen in the islands were from
Western Samoa or Tonga. About 3,660 people (roughly 35 percent) worked for the
American Samoan Government. About 6,740 were in the private sector “with the57
majority of these employed in the tuna canneries.” Thus, the government and the
canneries were primary employers and held a substantial and continuing interest in
employee compensation.
Within the tuna industry, about 65% to 70% of cost was attributable to raw fish.
“The price of fish is negotiated between the vessel operators and the processors and
the contract period varies from several months to several years, depending upon
perceived harvesting conditions and anticipated demand....” However, cannery
workers, with little organization in a western industrial context, received low wages
that kept labor market expenses down. “It is this situation that has enabled imports
to capture so much of the U.S. market,” the DOL Report stated. “... U.S. producers
have had to lower their prices and delay wage increases in order to survive.”58

55 Federal Register, February 25, 1986, p. 6605.
56 Federal Register, February 25, 1986, p. 6605. See Federal Register, May 26, 1959, p.


57 U.S. Department of Labor, Employment Standards Administration, Wage and Hour
Division, Various Industries in American Samoa: An Economic Report, March 1986, pp. 8-

9. (Cited hereafter as Various Industries In American Samoa, and by date.)

58 Various Industries in American Samoa, 1986, p. 18. The Report states: “The price of raw
tuna to be processed is determined in the U.S. industry by exclusive dealing arrangements

By the mid-1980s, tuna canneries operated in only three areas within the United
States: California (one cannery), Puerto Rico (five canneries), and American Samoa
(two canneries). In California, cannery workers are represented by the Seafarers
International Union, AFL-CIO. In Puerto Rico, two canneries had collective
bargaining agreements: National Packing (Van Camp, with the Congreso de Uniones
Industriales de Puerto Rico) and Caribe Tuna (Mitsubishi Foods, apparently with the
Seafarers Union, AFL-CIO). In 1985, there seem to have been no collective
bargaining agreements among Samoan cannery workers.59 State and local
governmental employees, conversely, had been gradually drawn into coverage under
the FLSA — partly growing out of litigation under the National League of Cities
(1976) and Garcia (1985) decisions.
Commission members were advised: “Once the rates in American Samoa reach
the mainland levels, they are subject to the same time schedule for further increases
that prevails on the mainland without further industry committee reviews.”60 The
Report then walked the parties through the currently existing minimum wage rates
— ranging from a low of $1.46 per hour for workers in laundry and dry cleaning to
a high $2.82 per hour for fish canning and processing. It was also pointed out that
the tuna industry employed 72% of employees in the private sector subject to FLSA
coverage. 61
Findings of the Committee. Under the chairmanship of Ronald St. Cyr,
the SIC met on April 28 through May 2, 1986. It heard from 20 witnesses and
received some 30 pieces of testimony “including one exhibit received in confidence62
under the committee’s seal.”
Before looking at the individual industries, the Committee examined a more
basic question. The evidence before them, in the judgment of the dominant group on
the Committee, indicated that the minimum wage rate for Samoa could be raised to
the mainland level without the risk that it would “substantially curtail employment63
in the industries” of the island.
The Committee then reviewed the industrial rates. “Employee witnesses
generally testified concerning the need for increases in [the] applicable minimum
wage rates. Employer witnesses,” on the other hand, “in some cases opposed any

58 (...continued)
between the canneries and the fishing vessels. The price is set by a bargaining process
between the canneries and the American Tuna Sales Association ... which represents the
tuna boat owners.”
59 Various Industries in American Samoa, 1986, pp. 42-46.
60 Various Industries in American Samoa, 1986, p. 51.
61 Various Industries in American Samoa, 1986, pp. 51-53.
62 Transcript of Special Industry Committee No. 17 (1986), pp. 1-2. (Cited hereafter as SIC
No. 17, 1986.) The Report (p. 2) stated: “The committee invited several other witnesses to
submit confidential financial and other data under seal, but no others took advantage of the
opportunity....” St. Cyr was Deputy Assistant Secretary for Labor-Management Standards.
63 SIC No. 17, 1986, p. 9.

upward adjustment of minimum wage rates and generally opposed reaching a $3.35
per hour minimum rate over any specific future time period.”64
Governmental opinion was mixed — though, for budgetary purposes, it seems
to have shared an interest in keeping wages low. One witness argued that an increase
to $3.35 per hour would have a deleterious impact for the insular budget. Yet, the
director of nursing stated that “nurses and other workers in the government medical
center were grossly underpaid with a resultant shortage of qualified help which has
adversely affected the quality of health care in American Samoa.” Having heard the
witnesses, the “... committee concluded that an increase in the minimum wage to
$3.35 an hour spread over a two-year period ... would not significantly curtail
employment opportunities.”65
Witnesses for the tuna industry pointed to the “precarious position” of the
industry, confronted with fish from other low-wage areas, and argued that there
“should be no increase in the industry’s minimum wage rate.”66 However, there was
another side to that equation.
Evidence presented to the committee showed that production costs for the
AS [American Samoa] tuna canneries between 1983 and 1985 declined
substantially while the value of tuna shipments from AS increased very
substantially from 1983 to 1984 (the latest available data). Also, the committee
heard evidence that the tuna industry in AS enjoyed substantial advantages
including: a favorable tariff posture (compared to foreign producers); an
exemption which permits raw fish to be landed in AS in foreign vessels (not
permitted in Puerto Rico or the mainland) resulting in lower raw fish prices
which constitute 60% to 70% of total costs; and minimum wages 46% lower than
average lowest regular wages for tuna canning in Puerto Rico and 135% lower
than in the mainland U.S.
The Committee further pointed to “tax incentives” provided by the Samoan
Government, with other similar advantages, that “have further contributed to a highly
favorable economic situation” for the canneries. Reluctance of the industry to
present evidence, “even under seal” from the Committee, seemed to raise further
doubts. The Committee raised the industry standard to $3.35.67
Gradually, from one industry to the next, the Committee mandated that the
minimum wage be raised to the statutory federal rate of $3.35 per hour — at least by
April 4, 1988. The thirty-year sub-minimum wage rate for American Samoa, it
seemed, would end. However, the Committee produced a mixed review. The Report
was signed by the two members representing the public and the two employee68

members. The two representatives from industry declined to sign the document.
64 SIC No. 17, 1986, p. 2.
65 SIC No. 17, 1986, pp. 9-10.
66 SIC No. 17, 1986, p. 10.
67 SIC No. 17, 1986, p. 11.
68 SIC No. 17, 1986, p. 17.

Congress v. the Special Industry Committee
Under date of June 20, 1986, the findings of the Special Industry Committee
were published in the Federal Register. The earliest increases in the insular
minimum wage rate, to $3.35, were to take effect after July 7, 1986.69
In the wake of the SIC’s hearings, “several interested groups” commenced
litigation to have the findings set aside so that employers might continue to pay rates
lower than the national minimum.70 However, the judicial process was cut short
when Congress, calling up the “Insular Areas Regulation Act” (99th Congress), added
language to overturn the findings of Special Industry Committee No. 17: that is,
retaining wage rates pre-Committee No. 17 and directing that a new committee be
appointed that would recommend minimum wage rates that would be less threatening
to the insular economic structure.71
Representative Morris Udall (D-AZ), chairman, Committee on Interior and
Insular Affairs, assessed the situation in Samoa. “A committee that met this year ...
failed to adequately comprehend the reasons that Congress had determined that a
special minimum wage should apply in the territory.” (Italics added.) Udall
explained: The rate increases “could cost the territorial government $7 million by
FY1988, a cost the Federal Government might have to make up.” In addition, there
were “clear indications that it would also force the tuna canning industry, which
directly and indirectly accounts for half of the private sector employment in the
territory, to substantially shift its operations to foreign locations.” The new rates,
Udall stated, “have already discouraged proposed investment from locating in the
islands” and “... would make American Samoa more uncompetitive than it already
is as a place of doing business.” He continued: “Reasonable increases are warranted
and we would favor increases as great as are reasonable. The proposed increases,”
he stated, “are not reasonable, however.”72
Udall stated that the language of the “Insular Areas Regulation Act” does not
amend the FLSA “nor does it modify the statutory system for periodic review and
revision of minimum wages in American Samoa.” Instead, he stated, “[i]t merely
suspends the current wage order and continues the prior minimum wage in effect,
pending the recommendations of a new industry committee convened in accordance
with existing law.” He admonished any further committee to consider “... the extent
to which rates facilitate maximum employment; the extent to which they enable
American Samoan businesses to be competitive within the region; and the potential
impact on the insular and Federal budgets.” Udall added: “We also appreciate the

69 Federal Register, June 20, 1986, pp. 22517-22518.
70 Various Industries in American Samoa, 1987, pp. 53-54.
71 Congressional Record, August 1, 1986, p. 18612.
72 Congressional Record, August 1, 1986, pp. 18617-18618. Representative Udall
explained: “Legislative relief is needed because the Department of Labor takes the position
that it lacks legal authority to grant administrative relief.”

statesmanship on this matter of Delegate Sunia, who is concerned both about fair
wages and maximum employment in the territory.”73
The House then approved the conference report on H.R. 2478 by a voice vote.74
In the Senate, James McClure (R-ID) explained the conference report. “It is the
intent of the FLSA that the minimum wage in American Samoa shall be increased to
the national minimum wage at a rate that ‘will not substantially curtail employment.’
However,” McClure affirmed, “the previous Special Committee’s recommendation
[No. 17], effective July 7, 1986, have [sic.] already resulted in the loss of 700 jobs.”75
Again, the conference report was accepted by voice vote.76 On August 27, H.R.

2478 was signed by President Ronald Reagan becoming P.L. 99-396.

Special Industry Committee No. 18 (1987)
A new committee was promptly appointed and the process recommenced; but,
unspoken, there was a cautionary note. Reasonableness, in terms of a minimum
wage, rested with the Congress. The powers of a Special Industry Committee were
now limited by what Congress would accept.
A New Committee Appointed
Secretary of Labor Brock appointed a new committee that arrived in the islands
on June 8, 1987, with the mandate to recommend the highest rates of wages that “will
not substantially curtail employment” in the insular industries.77 The Committee
stated that it had heard from 16 organizations and companies including DOI, the
Government of American Samoa, “the two tuna canning firms and the Chamber of
Commerce of American Samoa. Other parties testifying at the Committee hearing
consisted of 11 local businesses.” It noted: “In addition, there were other witnesses
representing both employers and employees.” If unions were present, they were not
identified by name.78
At the opening ceremony, Governor A. P. Lutali “recommended no increase in
the current FLSA minimum wage rates because of the severe budget situation ... and
the pressing need for an expanded employment base at the tuna canneries” — as well
as with firms associated with the tuna industry. Delegate Fofo Sunia “also expressed
concern” regarding the insular budget and “the economic situation of the tuna firms

73 Congressional Record, August 1, 1986, p. 18618. Delegate Fofo I. F. Sunia appears to
have been involved here but, apparently, did not comment on the minimum wage.
74 Congressional Record, August 1, 1986, pp. 18623-18624.
75 Congressional Record, August 9, 1986, p. 20394. The industry from which the jobs were
lost was not identified here.
76 Congressional Record, August 9, 1986, p. 20397.
77 Federal Register, February 19, 1987, pp. 5219-5220.
78 SIC No. 18, 1987, pp. 1-2.

and other businesses.” However, he felt that “some increase in the minimum wage
would be warranted at some future time once the budget and economic climate
improved.” Richard Montoya of Interior was similarly dubious. The Government
of American Samoa “... could not sustain any increase in payroll costs at this time.”
Montoya referred to the plight of “the tuna canneries and other business” and stated
that an increase in the minimum wage “would be counter- productive” to efforts “to
to expand the employment base in the private sector of the American Samoan
economy.” Ultimately, Montoya “recommended the Committee grant no increase in
any of the minimum wage rates at this time.”79
The Committee was reminded of Representative Udall’s comments — “(1) the
extent to which rates facilitate maximum employment; (2) the extent to which they
enable American Samoa businesses to be competitive within the region; and (3) the
potential impact on the insular and Federal Budgets.” It was noted that “such
considerations could be related to the Committee’s assessment of the impact of any
possible changes in the current FLSA minimum wage....”80 (Emphasis added.)
The New Committee’s Recommendations
The committee commenced with the two major industries of the islands.
Representatives of the government and the tuna canneries presented “a great quantity
of economic data.” Government witnesses emphasized “budget and fiscal
constraints.” Spokesmen for the tuna industry suggested the “increasing competition
from foreign imports from low-wage countries” and stated that “the various
economic advantages of performing their operations in American Samoa were
lessening.” The committee was unable to agree on whether an increase in the
minimum wage “would substantially curtail employment” and, so, “made no
recommendations.” Thus, the old wage remained in place: government workers and
cannery employees would not receive a raise.81
Similar controversies swirled around other industries. In petroleum marketing,
no evidence was presented to the committee. However, “the largest employer” stated
that his business was heavily dependent “on business from the fish processing and
canning industry.”82 So, they voted 4 to 2 against an increase. In shipping and
transportation, testimony suggested that “much of the business activity in this
category depended in some way upon the fish processing and canning industry.” One
segment was given 10 cents the first year and 10 cents the second.83 In construction,
workers would receive 10 cents the first year and 10 cents the next.84 Other
industries experienced similar increases.

79 SIC No. 18, 1987, p. 2.
80 SIC No. 18, 1987, p. 3.
81 The vote was 3 to 3, but a tie vote was regarded as negative — the former wage structure
remained in place. SIC No. 18, 1987, p. 8.
82 SIC No. 18, 1987, p. 10.
83 SIC No. 18, 1987, p. 11.
84 SIC No. 18, 1987, p. 12.

Minimum Wage in American Samoa (1987-2007)
In March of 1990, Labor Secretary Elizabeth Dole announced the appointment85
of SIC No. 19. But, a new complication arose — and the timing of the
Committee’s work was deferred.
Improving the Quality of Evidence
When establishing an SIC for American Samoa in 1956, it was assumed that
the committee would operate under the same rules as committees in Puerto Rico and
the Virgin Islands. However, in the early 1970s, a group of agricultural workers in
Puerto Rico argued that their rates, under the FLSA, should be increased because
their employers had not established, beyond a reasonable doubt, that they were not
able to pay a higher wage without “substantially curtailing employment.” Gradually,
the issue led to the courts.
Affirming Substantial Documentary Evidence (1974). Regulations of
the period suggested that “tangible objective data” must be assembled to show that
employers were not able to raise wages to the federal minimum standard. For Puerto
Rico, it seems, data may not have been possible to obtain. The farmers were often
poorly educated and may not have had “profit and loss statements” or “balance
sheets.” In such situations, the SIC could make recommendations “on the basis of
evidence which is available;” but, the Court argued, those recommendations must be
“sustained by the evidence.” In the Puerto Rican case, it found the record “devoid86
of a single subsidiary finding to support the Committee’s conclusion.”
When reporting legislation that would evolve into the 1974 FLSA amendments,
the House Committee on Education and Labor referred to the Puerto Rican case and
explained that “Congress intended” that findings of the SICs “would be based on
record-evidence adequate to reveal the financial and economic condition of the
covered employers.” In the absence of such evidence, proceedings have sometimes
“...degenerated into a process by which a majority of the members work their will
knowing that the record is bare of the facts necessary to controvert their argument
that higher wages would substantially curtail employment.” It proposed language to87
insure that a future SIC “be in a position to act rationally rather than arbitrarily.”
The new language was contentious. Senator James Buckley (R-NY) opposed
the evidentiary requirements. He stated: “The simple fact is that this requires a level88
of proof that too few Puerto Rican employers are unable [sic.] to provide.” Senator
Harrison Williams (D-NJ) disagreed. He argued that the bill reflected “broadly a

85 Federal Register, March 28, 1990, p. 11454.
86 Comments are taken from Sindicato Puertorriqueno de Trabajadores v. Hodgson (448 F-

2nd 1161 ff. (D.C. Cir. 1971)).

87 U.S. Congress, House, Fair Labor Standards Amendments of 1973. Report To Accompany
H.R. 7935, H.Rept. No. 93-232, 93rd Cong., 1st Sess., Washington, U.S. Govt. Print. Off.,

1973, pp. 25-26.

88 Congressional Record, March 7, 1974, p. 5737.

consensus.” Williams pointed to a history of abuse and affirmed that “as long as it
is part of the procedure to have these industry committees, let them be required to
support their conclusions” with “substantial documented evidence.”89
Thus, in the 1974 FLSA amendments, there appeared an explanation: that there
must be “substantial documentary evidence, including pertinent unabridged profit
and loss statements and balance sheets for a representative period of years” or, where
the employees are of the government “other appropriate information.” That
documentation must establish that an “industry, or a predominant portion thereof, is
unable to pay that wage.”90
Controversy Over the Minimum Wage Rate (1990). Gradually, DOL
began to distinguish between Puerto Rico and the Virgin Islands, on the one hand,
and American Samoa on the other.91 In the 1976 report to the Congress, it noted: “If
the committee has no objective data establishing the industry’s inability to pay the
mainland rate, the committee (except in American Samoa) is required under the 1974
FLSA Amendments to recommend the mainland rate without regard to the other
criteria.”92 (Italics added.)
In the late 1980s, American Samoa was, in effect, a company town — or, more
precisely, a three company island. It may not be surprising, therefore, that the
canneries and the Samoan Government opposed minimum wage increases and, where
increases were unavoidable, sought to keep them to the lowest possible level. In so
doing, the canneries have been afforded a relatively low wage workforce and the
Government (with DOI support) has kept its budget accordingly low. Conversely,
there seems to have been little alternative to existing work at whatever the wage rate
— given the isolated location of American Samoa.
When, in March 1990, Secretary Dole announced appointment of SIC No. 19,
no special reference was made to evidentiary requirements. On June 12, 1990,
Samoan Governor Peter Tali Coleman wrote to the Department of the Interior on that
issue. Governor Coleman stated:
The provision requires the Industry Committee to impose the mainland
minimum rate unless an industry can establish its inability to pay that rate by
“substantial documentary evidence.”
The term “substantial documentary evidence” is defined to include specific
financial statements which many smaller employers do not have. Even those
employers who do maintain formal financial records normally consider the
information sensitive and confidential.

89 Congressional Record, March 7, 1974, p. 5738.
90 Public Law 93-258. The issue was not a central focus of hearings or debates (1973-1974),
but the legislative history did make reasonably clear the general purpose of the provision.
91 U.S. Department of Labor, Employment Standards Administration, Minimum Wage and
Maximum Hours Standards Under the Fair Labor Standards Act, Washington, U.S. Govt.
Print. Off., 1975, pp. 7, and 21-24. (Hereafter cited as Section 4(d) Report, and by date.)
92 Section 4(d) Report, 1976, p. 43. Both Puerto Rico and the Virgin Islands were, even
then, moving out from under the SIC system.

Coleman added that DOL had “specifically ruled that the requirement did not apply
to American Samoa” and stated: “...the industry Committee could be forced to
promulgate wage rates which are unreasonably high....”93 An exchange of letters
followed — generally expressing concern about a wage increase and objecting to the
concept of substantial documentary evidence.94
If there was confusion over the concept of substantial documentary evidence,
it seemed opportune to make whatever changes may have been appropriate. On July
20, Delegate Eni F. H. Faleomavaega of Samoa asked his congressional colleagues
to “correct an inadvertent change” made in the 1989 amendments to the FLSA. With
Puerto Rico and the Virgin Islands now subject to routine (national) minimum wage
standards, only American Samoa remained subject to the SIC proceedings. My
district, Faleomavaega noted, “ unfortunately a one-industry community, and that
industry is the canning of tuna.” Again: “Should Samoa lose this industry, the
economic and social impact on the people in Samoa would be devastating.95 On
August 1, 1990, nine Members of the House wrote to Secretary Dole — requesting
a postponement of SIC No. 19.96
Finally, Stella Guerra, Assistant Secretary for Territorial and International
Affairs, DOI, wrote to William C. Brooks, Assistant Secretary for Employment
Standards at DOL. She observed that DOL had “already postponed the hearing at the
request of the American Samoan Government” but she urged further delay. Ms.
Guerra stated that the procedure “created a possibility of wage increases that could
bankrupt small businesses, cause the largest businesses (the tuna canneries) to
abandon the territory, and force the territorial government to lay off workers....” She
sought additional time to allow Congress to “complete action on the amendment that
we have proposed.”97
New Legislation (1990). On July 20, 1990, Mr. Faleomavaega introduced
H.R. 5329, a measure that would have stricken the entire section on “substantial98
documentary evidence.” Other bills followed: H.R. 5382, by Representative

93 Letter from Governor Peter Tali Coleman to Stella Guerra, Assistant Secretary for
Territorial and International Affairs, DOI, June 12, 1990.
94 See, for example, letter from Tuana ‘ltau F. Tula, Speaker, House of Representatives, and
Letuli Toloa, President of the Senate, to Governor Peter Tali Coleman, July 18, 1990; and
Guerra of DOI to J. Danforth Quayle, President of the Senate, July 18, 1990.
95 Congressional Record, June 20, 1990, p. 18538. Inserted with his statement was H.R.

5329, a bill to remove the “substantial documentary evidence” provision. See also S. 2930st

by Senator James McClure (R-ID). Both are from the 101 Congress.
96 Representative Carl C. Perkins (D-KY), et al., to Secretary Dole, August 1, 1990. The
letter spoke of a hazard to “the regions’s tuna export market” and further stated their belief
that “there is strong, bipartisan support for the technical correction” with respect to Samoa
and the concept of substantial documentary evidence.
97 Stella Guerra to William C. Brooks, Assistant Secretary for Employment Standards, DOL,
August 7, 1990.
98 Congressional Record, July 20, 1990, p. 18538.

Austin Murphy (D-PA)99 and S. 2930 (at the request of the Department of the
Interior) by Senator James McClure (R-ID).100 On August 4, S. 2930 was called up
for floor consideration. The bill, in its original form, was passed by the Senate.101
In the House, S. 2930 was called up by Mr. Murphy on October 18 who
explained that the bill would accommodate “two separate groups of employers. It is
very narrowly drafted.” He continued:
When we originally passed the Fair Labor Standards Act amendments last
year, the intent was to continue to provide American Samoa with the right to
have their minimum-wage level set by the Commission in the Department of
Labor. We did not make that clear, and the Senate bill is addressing that102
particular matter.
Murphy was seconded by Representative Steve Bartlett (R-TX) and, then, by
Representative William Goodling (R-PA).103
At this juncture, Murphy proposed a slightly different amendment. He would
insert: “unless there is evidence in the record which establishes that the industry, or
a predominant portion thereof, is unable to pay that wage due to such economic and
competitive conditions.” Murphy explained:
This amendment is intended to soften this additional burden for private sector
employers in American Samoa. While still requiring proof of economic
hardship, the language of the amendment makes it clear that the evidence
necessary to justify special wage orders relates to economic and competitive104
conditions on the island which affect the employment situation for Samoans.
Thus, the measure passed the House. The amended version required reconsideration
by the Senate, and on October 27, the Senate agreed to the House-passed bill.105 The
measure was signed on November 15, 1990 (PL. 101-583).

99 Congressional Record, July 26, 1990, p. 19769.
100 Congressional Record, July 27, 1990, pp. 20097 and 20099-20100.
101 Congressional Record, August 4, 1990, pp. 23403-23404.
102 Congressional Record, October 18, 1990, p. 31021.
103 Congressional Record, October 18, 1990, p. 31022. Representative Faleomavaega
explained more fully the character of the measure (to “correct an inadvertent error”) in a
statement for the Record. No dissenting views were expressed.
104 Congressional Record, October 18, 1990, pp. 31023-31024.
105 Congressional Record, October 27, 1990, pp. 36376 and 36392.

Hearings on the Samoan Minimum Wage (1991-1992)
On November 26, 1991, Representative Murphy introduced a bill to amend the
FLSA and, through a three-year period, “to bring the minimum wage in American
Samoa up to the wage in effect in the United States.”106
As chairman of the Labor Standards Subcommittee, Murphy convened a hearing
on June 3, 1992, on H.R. 4011 — a bill intended “to stimulate debate and interest
in the welfare and well-being of American Samoan workers” whom, he suggested,
were “sometimes neglected and overlooked in the crush of other important national
issues.” Our objective, he noted, is to bring the Samoan wage up to par with the
federal rate “as rapidly as possible without curtailing employment.”107
Comments from Public Officials. Governor Peter Tali Coleman’s
testimony, submitted for the record, began: “The American Samoa Government
vigorously opposes this bill.” It would “raise artificially the minimum wage of
American Samoa” without taking into account the status of its “economic
development.” Coleman urged an appreciation of “the uniqueness of our culture and
its impact in the workplace ... “ Describing Samoa as “a group of very small islands
with few natural and human resources,” he stated: “We are heavily dependent on ...
the economic strength of our largest private sector employers, the tuna canneries.
These two companies, StarKist and Van Camp, are responsible for much of our
economic growth....”
Coleman added that he was “... especially troubled by the potential for
substantial increases in unemployment.” (Emphasis in the original.) He continued:
We lack the diversity, capital, raw materials, skill levels, market or transportation
systems of the United States. Geographically, the Territory is remote and
isolated. Our natural resources are severely limited. (...) Tuna canning
continues as our primary private sector employer. (...) Rather than improving
the income levels of our people, thousands may be thrown out of work with no
present job alternatives.
The SIC system “works well in American Samoa.” Under that system, “...statistical
data and economic conditions are examined to determine whether the Territory’s
minimum wages can be increased without substantially curtailing employment....”
Coleman concluded: “This is simply an ill conceived piece of legislation. It fails to
take into account how the present system is working or the tremendous adverse
consequences that could result from enactment.”108
Delegate Faleomavaega’s testimony, now, provided something of a contrast.
“Since entering office, many of my constituents have related to me tales of woe about

106 Congressional Record, November 26, 1991, p. 35873.
107 U.S. Congress, Hearing before the Subcommittee on Labor Standards, Committee on
Education and Labor, Hearing on H.R. 4011, Minimum Wage Rates in American Samoa,ndnd

102 Cong., 2 Sess., June 3, 1992, pp. 1-2. (Cited hereafter as House Hearing, 1992.)

108 House Hearing, 1992, pp. 4-9.

the rapidly increasing cost of living in American Samoa, which has far outstripped
salary increases of average wage earners.” These “cries for help” are “growing in
number.” “Perhaps,” Faleomavaega suggested, the hearings will provide the answer
to why American Samoa, unlike people in other US territories, “are told they must
be satisfied with the substandard wages set by the Department of Labor’s industry
It may be, Faleomavaega suggested, that StarKist and Van Camp, “invaluable
mainstays of our territory’s economy, are overly sensitive.” From “media reports,”
one hears of highly compensated executives whose corporate income is many times
more than “the combined annual salaries of the 2,500 cannery laborers gutting tuna
in Pago Pago.” Such reports may be “wrong or outright lies” but “... perhaps the
canneries should open their books and let their financial records speak for
themselves.” He observed: “Continuing to fail to divulge relevant financial
information while pleading lack of funds for wage increases ... will only be seen as
a sign of bad faith.” Still, he suggested that it was a “... delicate economic balance
that must be struck to keep our canneries in the territory.”109
John R. Fraser, Deputy Wage/Hour Administrator, resisted any increase. “There
was concern that the industry might respond to a larger increase by shifting
production to lower-cost areas, possibly resulting in very significant reductions in
employment in the American Samoan canneries.” This was of special concern “
an economy dominated by only two major employers and where there is scant
evidence that the territory can significantly expand its employment base in other
areas to provide additional job opportunities.”110
Donald Senese, Deputy Assistant Secretary for Territorial and International
Affairs, DOI, was equally candid. He recalled the abortive SIC No. 17 and suggested
that H.R. 4011 was essentially “the same proposal.” Detailed economic studies
suggested, he stated, that “any large increase in minimum wages would encourage
the tuna canneries to move at least some of their operations from American Samoa.”
In our view, he concluded, “... the artificial setting of wage rates at the U.S. minimum
would be very likely to eliminate the tuna canning industry and, in turn, threaten to
destroy the entire private sector economy of American Samoa.”111
Comments from the Industrial Sector. In over 30 years as an executive
with StarKist, Robert W. Hetzler stated: “... I have seen the tuna industry change
from a homebred domestic industry ... to the foreign-dominated business it is today.”
He added:
As this shift has occurred, the industry has suffered massive job losses, first in
California and more recently in Puerto Rico, as tuna processors have moved to
lower labor cost areas such as Thailand, Indonesia, and the Philippines. As costs
to U.S. producers rise, compounding the cost advantages of foreign producers,

109 House Hearing, 1992, pp. 11-14.
110 House Hearing, 1992, pp. 16-17.
111 House Hearing, 1992, pp. 28-29. Senese, during the hearing and in the transcript, was
identified, in error, as an official with the Department of Labor.

the elimination of domestic production will continue and even quicken, to the
detriment of U.S. producers, their workers, and the communities in which they
With factories in Mayaguez, Puerto Rico, and Pago Pago, “the canneries provide the
majority of private employment as well as create many additional jobs in service and
support industries.” The current bill would have “a devastating effect on tuna
operations in American Samoa” and StarKist “must emphatically oppose H.R.


Hetzler pointed to the alleged differences between American Samoa and
elsewhere: the costs of environmental protection, the absence of routine living costs.
“Most cannery workers do not pay rent, there is no property tax, clothing costs are
minimal due to the single-season climate, and medical costs are covered nearly 100
percent by the government.” Some workers were not American: a “large majority of
cannery workers in American Samoa are from Western Samoa....”113
The government, Hetzler stated, “continues to add costs to U.S. industry through
labor regulations, environmental controls, and numerous other measures.” There is
“simply no replacement industry” and “ way to recover the cost increases in the
market-place.” Further: “If government desires to place such wage and other controls
on industry ... job and business transfers to foreign low cost areas will result....”114
Jose Munoz, president and CEO of Van Camp, argued that the “...typical tuna
consumer is a very budget conscious homemaker, raising a family.” Although his
firm had experimented with off-setting pricing, he had found “The consumer is
unwilling to pay more for canned tuna to protect or to save U.S. jobs.” Munoz
reviewed various initiatives and affirmed: “We all ultimately report to somebody, and
in the tuna industry, we report to the consumer.” Even in the best of times, he
suggested, the consumer “had been unwilling to pay an increase.”115
As the hearing closed, Representative Murphy announced that “we had two
witnesses representing organized labor, both of whom have served on the special
industry committees, who were unable to make today’s hearing. The record of this

112 House Hearing, 1992, pp. 51-52.
113 House Hearing, 1992, pp. 52-53. In subsequent testimony, p. 84, Jose Munoz, CEO of
Van Camp, agreed that the majority of lower level employees are Western Samoans. “We
work very closely with the government to hire American Samoans. Whenever there is a job
opening, we advertise it on the local radio stations, we post it in the newspapers, and we
work with the government training and job employment offices. Only when we have been
unable to find any American Samoans to do the job do we then go to Western Samoans.”
Conversely, John Fraser of DOL stated, p. 15, that “American Samoa’s unemployment rate
has remained at about 13 percent over the last decade....”
114 House Hearing, 1992, p. 53.
115 House Hearing, 1992, pp. 65-66. See also ibid., p. 74.

particular hearing,” he stated, “will be kept open in order to give them an opportunity
... to submit a written statement.”116 No statement from labor appears.
Rejecting the Special Industry Committee System (2007)
The Murphy proposal of 1992 was not adopted, and instead, the SIC system
continued through the next several years with missions being sent to Samoa at two-
year intervals. On May 10, 2007, Secretary of Labor Elaine Chao appointed a new
commission.117 The instructions were routine. An economic report on labor
conditions in Samoa, traditionally the responsibility of the Department of Labor, had
been prepared and was circulated.118
In the 110th Congress, George Miller became chair of the Committee on
Education and Labor. Targeted for immediate action was H.R. 2, the “Fair Minimum
Wage Act of 2007.” The bill (with some 222 cosponsors) had two provisions: (1) to
raise the federal minimum wage, in steps, to $7.25 per hour, and (2) to render the
federal minimum wage applicable to the Commonwealth of the Northern Mariana
Islands — to take place in steps through the next several years. No mention was
made of American Samoa: its Special Industry Committee was, by this point, an
established institution.
On January 10, 2007, H.R. 2 was called up in the House and, as a clean
minimum wage bill, was adopted on a vote of 315 yeas to 116 nays. The measure
was promptly referred to the Senate where it was also adopted: 94 yeas to 3 nays.
But, in the Senate, several revenue-oriented proposals were added, posing a
procedural problem. The result was a variety of votes and new bills until, in late May
2007, H.R. 2206 (P.L. 110-28) was adopted and signed by the President. The final
bill was a compromise. Minimum wage constituted only a very small part of the
composite bill — the rest being concessions to industry in exchange for support of
the wage measure. In addition, American Samoa had been added to the bill on final
passage. 119
No immediate hearings had been held on application of the minimum wage to
American Samoa. Some concern had been voiced, however, about not having Samoa
included in a bill that included the Commonwealth of the Northern Mariana Islands.
And, some suggested that a ‘special exemption’ had been instituted for the vested
interests of the Samoan islands. Rather than contest the issue, Samoa was added, but
with a slightly different procedure. Of the several classifications of industry in

116 House Hearing, 1992, p. 89.
117 Federal Register, May 15, 2007, pp. 27337-27338.
118 U.S. Department of Labor, Employment Standards Administration, Wage and Hour
Division, Economic Report: The Minimum Wage in American Samoa, 2007. 135 pp. The
report was reasonably complete with various charts and tables representing employment in
American Samoa — including a lengthy section on the tuna industry and pro and con
arguments with respect to the minimum wage.
119 See CRS Report RL33754, “Minimum Wage in the 110th Congress,” by William

Samoa (now numbering about 18), each would be given a 50 cent increase in the
minimum wage to take effect on July 25, 2007. Thereafter, a 50 cent increase by
industry classification would be affected each year until the collective minimum
wage of Samoa reached the standard national minimum wage: namely, $7.25 per
hour or whatever new wage might be imposed. Then, the insular minimum would
rise (or fall) in tandem with the national rate.
Further, within eight months after enactment of P.L. 110-28, the Department of
Labor was asked — under mandate from Congress (Section 8104) — to produce a
study of the impact of the minimum wage for Samoa and for the CNMI. No action
was associated with the report, which was purely advisory.120
On June 13, 2007, with P.L. 110-28 in place, Secretary Chao “discharged the
Industry Committee” that had recently been appointed and closed that aspect of the
case of American Samoa.121
Meanwhile, Representative Faleomavaega introduced H.R. 5154, an amendment
to the ‘U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq
Accountability Appropriations Act, 2007.” The bill would allow the several
minimum wage increases to go into effect if, in the case of American Samoa, “the
Secretary of Labor determines, based on the study required under section 8104 [the
DOL study] and in consultation with the Secretary of the Interior and the government
of American Samoa, that an increase under this subparagraph will not have an
adverse impact on the economy of American Samoa....” New studies would be
conducted at each two-year interval. The bill adds: “The Secretary of Labor shall
make the determinations required ... each year at least 60 days before the scheduled
increase in the minimum wage” and publish such determinations in the Federal
Register .122
H.R. 5154 has been referred to the Committee on Education and Labor. No
action has been reported.

120 See U.S. Department of Labor, Office of the Assistant Secretary for Policy, Impact of
Increased Minimum Wages on the Economies of American Samoa and the Commonwealth
of the Northern Mariana Islands, January 2008. 45 pp.
121 Federal Register, June 13, 2007, p. 32683.
122 H.R. 5154 also applied to the CNMI.

Concluding Summary
Throughout most of the United States, the minimum wage is a floor — the
lowest wage that can legally be paid to covered workers. In American Samoa, the
minimum wage tends to represent both a floor and a ceiling — though some rates do
go up a few cents beyond the minimum. It appears that most fish processing workers
in Samoa are paid at or near the minimum wage.
Through now fifty years (1956-2007), American Samoa had been under the
Special Industry Committee structure. During the early years, that option included
Puerto Rico and the Virgin Islands. However, during the late 1980s and into the
1990s, Puerto Rico and the Virgin Islands graduated to a full minimum wage leaving
only American Samoa under the SIC umbrella. Where the two Caribbean territories
have special characteristics that have allowed for the gradual elevation to a full
minimum wage, American Samoa is in a somewhat different position. Samoa
evidences no serious or sustained movement into an industrial world with a
diversified economy.123
American Samoa is isolated: 2,300 miles southwest of Hawaii. The population,
though modest by mainland standards, has been expanding: perhaps, now, to about
60,000 or a little above. Distances render major tourism unlikely. There may be
some market for handicrafts, but hardly enough to sustain even native/resident
workers under current marketing arrangements. In spite of a relatively high level of124
Samoan unemployment (somewhere in the teens during recent years), workers
often arrive from Western Samoa (a former British colony, now independent) to
engage in fish canning and to replace those workers who migrate to the States. There
would seem to be little interest in trade unionization and, it appears, the territory
offers little reward for national labor federations.
In the early 1950s, the Department of the Interior sought a tenant for a vacant
fish processing plant at Pago Pago. The search seems to have been difficult — but
Van Camp Sea Foods took up the challenge. Soon, the firm was confronted with
payment of a federal minimum wage. In order to sustain its insular existence, Van
Camp sought two concessions from the Congress. First, the minimum wage for the
island should be overturned, placing responsibility in the hands of a special industry
committee under the Secretary of Labor (as had been done for Puerto Rico and the
Virgin Islands). Second, it sought immunity from past underpayment of the
minimum wage in Samoa. In each case, Congress concurred.

123 In American Samoa Economic Advisory Commission: Transforming the Economy of
American Samoa. Vol. One: A Report to the President of the United States of America
through the Secretary of the U.S. Department of the Interior, Honolulu, July 2002, p. 9, it
is stated: “...the people of American Samoa make clear they will not support any economic
development that ultimately undermines the tenets of fa’asamoa, the Samoan way of life.”
124 The unemployment rate reached 13.6 percent in 1999, though it has fluctuated at
somewhat lower levels. See Economic Report: The Minimum Wage in American Samoa,
2003. U.S. Department of Labor, Employment Standards Administration, Wage and Hour
Division, May 2003, p. 9.

Gradually, the tuna industry has come to dominate the island’s private sector as
the primary employer. For workers in the canneries, there would seem little option
but to take jobs at whatever wages the companies chose to pay (assuming that the
SIC and the Congress would agree). A second option, less desirable by insular
standards, would have been to migrate to the States or elsewhere.
With the first dispatch of a SIC to the islands in 1957, the native economy was
assessed and a minimum wage was assigned — to be updated every year or two. At
first, cannery workers were to be paid 38 cents an hour. Petroleum workers earned
45 cents an hour; shipping, 40 cents; and miscellaneous workers, 35 cents. The
upward movement was slow until, in 1986, SIC No. 17 determined that the federal
minimum wage ($3.35 per hour) could be instituted without endangering
employment. However, under pressure from the canneries and the insular
government, the judgment of SIC No. 17 was overturned and Congress urged
reestablishment of a lower rate.125
What some may have seen as a further setback occurred in 1990 when Congress
enacted legislation reducing the level of evidence required in order for an employer
to affirm his or her inability to meet a minimum wage payroll. Further, in 1992,
legislation was introduced that would have increased the insular minimum, over time,
to the full federal minimum rate. But, with industry in full opposition, the bill was
not adopted. Since that time, little new has developed. In 2001, SIC No. 24 visited
the islands and raised the wage for fish cannery workers from $3.20 to $3.26. No
further increases in that category of work, it seems, have been instituted, though
Committees were dispatched in 2003 and 2005 and would have met in 2007. Other
rates of pay for insular workers have remained similarly low.
In 1992, John R. Fraser of DOL explained that there is “concern that the
industry [tuna] might respond to a large increase [in the minimum wage] by shifting
production to lower-cost areas” and, for that reason, “the department opposed”
legislation to provide equality with the general federal rate.126 Robert W. Hetzler of
StarKist was more blunt. Were the tuna industry to disappear, “the entire Samoan
economy will collapse, resulting in massive social welfare costs to the government
of American Samoa and the United States.” There is, he stated, “simply no
replacement industry” and “ way to recover the cost increases in the market-
pl ace.”127
That rationale, however justified by insular economic conditions, may not
satisfy the workers in tuna and in other industries. “[M]y district,” observed Delegate
Faleomavaega during hearings in 1992, “is the only jurisdiction where the American
flag flies and Federal minimum wage law applies, yet our people ... are told they must

125 See Amerika Samoa: The Lutali Years, 1985-1986. Privately published for the Samoan
Government, p. 7.
126 House Hearings, 11992, pp. 16-17.
127 House Hearing, 1992, pp. 52-53.

be satisfied with the substandard wages set by the Department of Labor’s industry
On May 15, 2007, Labor Secretary Elaine Chao announced appointment of a
new Special Industry Committee to meet in Pago Pago in mid-June.129 But, the work
of the committee was interrupted by congressional action. In late May 2007,
Congress adopted (and the President signed) the “U.S. Troop Readiness, Veterans’
Care, Katrina Recovery, and Iraq Accountability Appropriations Act” (H.R. 2206,
P.L. 110-28). Under the act, the SIC system was abolished and a new insular
minimum wage was mandated — to be raised each year in fifty-cent increments until
the new federal minimum rate, however specified, might be reached.

128 House Hearing, 1992, p. 12.
129 Bureau of National Affairs, Daily Labor Report, May 15, 2007, p. A11.

Table 1, Part A. Compilation of Wage Rates Established by
the Various Special Industry Committees for American Samoa
(in dollars)
te and
mmitteeFLSACanneryHospital andRetailShippingaShipping aShipping ab
bersStandardWorkersPetroleumConstructionEducationHotels Trades (1) (2)(3)Misc. .40 .35 .50 .38 .75 .55
iki/CRS-RL340131.15.90.90 .50.90.70
g/w1. .551.00.80
s.or1.251.001.03½ .70 .55 .80
1.401. .65.80 1.10.90
://wikind year)1.601.
1.601. .90 1.201.00
nd year)1.601.201.30.88 .80 .95 1.251.05
1.601.23 .60
nd year)1.601.
1.601.351.371. 1.37
nd year)2.001.421.441.
2.301.541.641.351.201.101.30 1.571.10
nd year)2.301.661.701.451.301.151.351.701.15
2.651.811.821.521.351.221.42 1.82 1.25

te and
mmitteeFLSACanneryHospital andRetailShippingaShipping aShipping ab
bersStandardWorkersPetroleumConstructionEducationHotels Trades (1) (2)(3)Misc.
nd year)2.901.961.951.601.421.301.491.951.35 2.151.43
nd year)3.352.332.32 1.851.541.501.652.21 2.321.50
3.352.552.532.001.601.601.752.42 2.531.59
nd year)3.35 2.151.66 1.85 1.67
3.352.672.652.251.741.681.942.53 2.651.75
nd year)3.352.822.802.381.841.772.052.672.801.85
1986 d2.192.122.35 2.30
3.353.353.352.93(to 7/7/86)(to 7/7/86)(to 7/7/86)3.22 3.35(to 10/1/86)
iki/CRS-RL34013 3.35 2.54 2.47 2.65 2.65
g/w(to 1/5/87)(to 1/5/87) (to 1/5/87)3.35 (to 4/1/87)
s.or2.892.823.00 3.00
leak(to 7/6/87)(to 7/6/87)(to 7/6/87) (to 10/1/87)
://wiki3.24 3.17
http(to 1/4/88)(to 1/4/88)3.35 3.35
3.35 3.35
3.352.822.802.381.841.772.052.67 2.801.85
3.35 2.50 1.85 2.152.75 2.90
nd year)3.352.602.252.85
4.252.872.912.702.342.032.342.96 3.121.92
nd year) 4.252.923.032.812.432.112.433.08 3.252.00 3.352.10
nd year)
4.25 3.453.053.002.452.703.60 3.652.35
nd year)4.753.103.553.203.102.602.803.703.752.45

te and
mmitteeFLSACanneryHospital andRetailShippingaShipping aShipping ab
bersStandardWorkersPetroleumConstructionEducationHotels Trades (1) (2)(3)Misc.
5.15 3.603.303.172.702.87
nd year)
5.15 3.45 2.97 3.92
nd year) 3.013.81 3.972.50 4.032.54
nd year)5.15 3.853.603.332.863.103.92 4.092.57
5.15 2.93 2.63
nd year)
g/w: Wage rates are drawn from the Federal Register with each SIC entry.
leakThis table, which covers a widely ranging series of fields, is broken into two parts because of the number of columns. Some of the 21 fields or occupations
://wikized appear for a time and then are absent before re-emerging, as is the case of some components of “Shipping.” Others emerge later, are active for a period and
http, Dry Cleaning.” The table begins with 1957 and moves forward to 2005.
hrough the years, some variation may appear with respect to certain worker categories. The several classifications of workers under the title ofshipping,” for example, seem to
fluctuate over time making precise definition uncertain. Each classification has some bearing upon transportation and/or longshore workers. However, workers dealing with
petroleum,” under certain conditions, may fall into a separate category.
he classification ofmiscellaneousseems to be a catch-all for non-governmental occupations that are not listed separately. The classification of government employeesserves
a similar function for its sector.
holesale and warehousing were merged into retail trades.
1986, the SIC set rates that would, eventually, reach those of the general federal FLSA standard. In 1987, at the mandate of the Congress, the rates were set back to the lower
wage levels in effect in 1985.

Table 1, Part B. Compilation of Wage Rates Established by
the Various Special Industry Committees for American Samoa
(in dollars)
La undry , Wholesale
Date,FLSADry Printer,Ware-gFinance,Travel &GovernmentShipShipping aGarmentPublishing
mmitteeStandardCleaningBottling Publishing HousingInsuranceTransportEmployeesMaintenance (4)WorkersIndustry
s.ornd year)1.60
leak .95
://wikind year)1.60
nd year)1.60.901.
1.60.95 1.16 1.27
nd year)
2.00 1.27 (cor)
nd year)2.101.341.15
2.30 1.20 1.30 1.451.451.20
nd year)2.30 1.251.40 1.601.501.30
2.651.051.321.50 1.701.571.40
nd year)2.901.101.391.601.801.641.50 1.931.761.60

La undry , Wholesale
Date,FLSADry Printer,Ware-gFinance,Travel &GovernmentShipShipping aGarmentPublishing
mmitteeStandardCleaningBottling Publishing HousingInsuranceTransportEmployeesMaintenance (4)WorkersIndustry
nd year)3.351.201.591.842.051.881.70
3.351.261.691.99 2.181.981.79
nd year)3.351.321.842.092.312.13
3.351.381.932.19 2.422.231.87
nd year)3.351.462.042.312.562.351.97
1986d1.95 (to2.352.863.112.902.30
3.357/7/86)(to 7/7/86)(to 1/7/86) (to 1/7/86)(to 1/7/86)(to 10/1/86)
(to 2.65 2.65
iki/CRS-RL340131/5/87) (to 1/5/87)3.35 3.353.35(4/1/87)
g/w2.65(to3.00 3.00
s.or7/6/87)(to 7/6/87) (10/1/87)
://wiki(to 1/4/88)3.35 3.35
3.351.462.042.31 2.562.351.97
3.35 2.152.40 2.61 2.50
nd year)3.352.252.502.71
4.25 2.342.60 2.822.442.172.60
nd year)4.25 2.432.70 2.932.54 2.70
4.25 2.552.80 3.052.65 2.80
nd year)4.25 2.752.95 3.252.852.372.95
4.25 2.853.05 3.453.00 3.003.50
nd year)4.75 2.953.20 3.603.102.453.103.62

La undry , Wholesale
Date,FLSADry Printer,Ware-gFinance,Travel &GovernmentShipShipping aGarmentPublishing
mmitteeStandardCleaningBottling Publishing HousingInsuranceTransportEmployeesMaintenance (4)WorkersIndustry
5.15 3.013.25 3.693.16 3.15 2.453.30
nd year)5.15 3.073.35 3.783.222.573.203.722.553.45
5.15 3.37 3.83 2.63 3.48
nd year)5.15 3.103.40 3.88 2.693.253.772.60 3.53
5.15 3.153.45 3.943.272.73 3.303.832.643.58
nd year)5.15 3.193.50 3.993.312.773.343.882.683.63
5.15 3.392.843.42 -
nd year)5.153.482.913.51
g/w: Wage rates are drawn from the Federal Register with each SIC entry.
leakhrough the years, some variation may appear with respect to certain worker categories. The several classifications of workers under the title ofshipping,” for example, seem to
fluctuate over time making precise definition uncertain. Each classification has some bearing upon transportation and/or longshore workers. However, workers dealing with
://wikipetroleum,” under certain conditions, may fall into a separate category.
httphe classification ofmiscellaneousseems to be a catch-all for non-governmental occupations that are not listed separately. The classification ofgovernment employees” serves
a similar function for its sector.
holesale and warehousing were merged into retail trades.
1986, the SIC set rates that would, eventually, reach those of the general federal FLSA standard. In 1987, at the mandate of the Congress, the rates were set back to the lower
wage levels in effect in 1985.