American Samoa - Economy

Economy

Employment on the island falls into three relatively equal-sized categories of approximately 5,000 workers each: the public sector, the single remaining tuna cannery, and the rest of the private sector.

There are only a few federal employees in American Samoa and no active duty military personnel except members of the U.S. Coast Guard, although there is an Army Reserve unit. There is also a U.S. Army recruiting station in Utulei.

The overwhelming majority of public sector employees work for the American Samoa territorial government. The one tuna cannery, StarKist, exports several hundred million dollars worth of canned tuna to the United States each year. The other tuna cannery, Samoa Packing, a Chicken of the Sea subsidiary, closed in 2009 due to American Samoans being granted minimum wage. In early 2007 the Samoan economy was highlighted in the Congress as it was not mentioned in the minimum wage bill, at the request of the Samoan delegate to the United States House of Representatives, Eni Faleomavaega.

From 2002 to 2007, real GDP of American Samoa increased at an average annual rate of 0.4 percent. The annual growth rates of real GDP ranged from -2.9 percent to +2.1 percent. The volatility in the growth rates of real GDP was primarily accounted for by changes in the exports of canned tuna. The tuna canning industry was the largest private employer in American Samoa during this period.

1. Average annual growth rate. 2. Source: 2008 American Samoa Statistical Yearbook.

From 2002 to 2007, the population of American Samoa increased at an average annual rate of 2.3 percent, and real GDP per capita decreased at an average annual rate of 1.9 percent.

The Fair Labor Standards Act of 1938 has, since inception, contained special provisions for American Samoa, citing its limited economy. American Samoa wages are based on the recommendations of a Special Industry Committee meeting bi-annually. Originally, the Act contained provisions for other territories, provisions which were phased out as those territories developed more diverse economies.

In 2007, the Fair Minimum Wage Act of 2007 was passed, increasing minimum wage in American Samoa by 50¢ per hour in 2007 and another 50¢ per hour each year thereafter until the minimum wage in American Samoa equals the federal minimum wage of $7.25 per hour in the United States. In response to the minimum wage increase, one of the two major tuna canning plants in American Samoa, Chicken of the Sea, was shut down in 2009 and 2,041 employees were laid off in the process. The other major tuna canning plant in American Samoa, StarKist, began laying off workers in August 2010, with plans to lay off a total of 800 workers due to the minimum wage increases and other rising operation costs. American Samoa Governor Togiola Tulafono has suggested that, rather than laying off minimum wage workers, the companies could reduce salaries and bonuses of top-tier employees.

The Unemployment rate was 29.8% (2005), but has been improved to 23.8% as of (2010). Samoa GDP is $537 million and its GDP - per capita (PPP) is $8,000 (2007). American Samoa economy is generally better than that of its neighbors like Samoa as American Samoa GDP - per capita (PPP) is more than twice as high as Samoa's.