AMERICAN SAMOA

Alternatives for 

Raising Minimum 

Wages to Keep Pace 

with the Cost of Living 

and Reach the 

Federal Level

Report to Congressional Committees

December 2016

GAO-17-83

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-17-83, a report to 

congressional committees

December 2016

AMERICAN SAMOA

Alternatives for Raising Minimum Wages to 

Keep Pace with the Cost of Living and Reach 

the Federal Level

What GAO Found

Federal legislation passed in 2007 created a schedule of periodic increases to 

minimum wages in American Samoa. During the previous 50 years, special 

industry committees had periodically recommended industry-specific minimum 

wages. Historically, minimum wages in the U.S. territory have generally 

remained below the federal minimum wage (see fig.). The current schedule of 

increases would raise all American Samoa minimum wages to the current federal 

hourly rate of $7.25 by 2036. However, any new increase in the federal rate will

lengthen the time required to achieve convergence.

Minimum Wages in American Samoa Relative to the Federal Minimum Wage, 1957-2016

American Samoa’s gross domestic product (GDP) per capita is less than a 

quarter of the U.S.’s GDP per capita and, adjusted for inflation, has declined over 

the past decade. Local government and tuna canneries are the largest 

employers, accounting in 2014 for 42 percent and 14 percent of the workforce, 

respectively. From 2007 to 2014, overall employment fell by 4 percent, and 

workers’ average inflation-adjusted earnings fell by about 11 percent. During the 

same period, cannery employment decreased by 50 percent, and the minimum 

wage for cannery workers rose. Cannery officials reported labor costs and 

fisheries access among the challenges of operating in the territory, and one of 

the two canneries announced plans to suspend operations indefinitely in 

December 2016. The American Samoa government has expressed concern that 

continued minimum wage increases are at odds with sustainable economic 

development.

There are two basic approaches for increasing American Samoa’s minimum 

wages to keep pace with the cost of living in American Samoa and to eventually 

equal the federal minimum wage—the criteria included in the provision for GAO 

to report on this issue. The first approach relies on indexing minimum wages to 

the cost of living. The second approach relies on using a schedule of future 

adjustments. Aspects of each approach could also be combined, as needed, with 

respect to the amount and timing of future increases to the territory’s minimum 

wages. Given concerns about potential negative effects of increasing American 

Samoa’s minimum wage on the territory’s economy, other design options could 

be incorporated to safeguard against such effects. For example, minimum wage 

increases could be reduced or suspended based on economic indicators that 

reflect the general health of the American Samoa economy or critical sectors.

View GAO-17-83. For more information, 

contact David Gootnick at (202) 512-3149, or 

gootnickd@gao.gov.

Why GAO Did This Study

The federal minimum wage, 

established by the Fair Labor 

Standards Act of 1938, has not been

applied in American Samoa for many 

years. In 2007, Congress passed 

legislation to incrementally raise 

minimum wages in American Samoa to 

the federal level. Subsequent 

legislation postponed or reduced these 

increases.

Pub. L. No. 114-61, enacted in October 

2015, included a provision for GAO to

report on alternative ways of increasing 

minimum wages in American Samoa to 

keep pace with the territory’s cost of 

living and eventually equal the federal 

minimum wage. In addition, Pub. L.

No. 111-5, enacted in February 2009, 

included a provision for GAO to report 

periodically on the economic impact of 

minimum wage increases in the 

territory. This report examines (1) the 

history of minimum wage 

implementation in American Samoa;

(2) the status of the American Samoa 

economy, including changes in 

employment, earnings, and key 

industries since scheduled minimum 

wage increases began in 2007; and (3) 

alternative approaches for increasing 

minimum wages in American Samoa to 

meet GAO’s two reporting criteria in 

Pub. L. No. 114-61. GAO reviewed 

American Samoa local and federal 

earnings information; collected data 

from American Samoa employers in a

key industry through a questionnaire; 

and reviewed methods used to set 

minimum wages in the United States 

and around the world.

Commenting on a draft of this report, 

the Department of the Interior 

suggested further study and the 

American Samoa government 

suggested creating a committee to set 

minimum wages in the territory. 
Page i GAO-17-83 American Samoa

Letter 1

Background 4

History of Minimum Wages in American Samoa 14

Status of the American Samoa Economy 22

Alternatives for Increasing American Samoa Minimum Wages to 

Keep Pace with the Cost of Living and Eventually Equal the 

Federal Minimum Wage 36

Agency Comments and Our Evaluation 49

Appendix I Objectives, Scope, and Methodology 55

Appendix II Minimum Wage-Setting Systems around the World 60

Appendix III Selected Federal Laws Related to Minimum Wages in American 

Samoa, 1938-2015 69

Appendix IV State Minimum Wage Law Requirements Related to Adjustment 

Mechanisms 70

Appendix V Projected Convergence of American Samoa Minimum Wages with 

Federal Minimum Wage 75

Appendix VI American Samoa Minimum Wage Poster 76

Appendix VII Highest American Samoa Minimum Wage, Adjusted for Inflation 79

Appendix VIII Comparison of Labor and Tariff Costs for Four Potential Tuna Canning 

Business Models 80

Contents
Page ii GAO-17-83 American Samoa

Appendix IX Projected Timeframes for American Samoa Minimum Wages to Equal 

Federal Minimum Wage 85

Appendix X Examples of Combining an Indexed Approach with a Schedule-Based 

Approach 87

Appendix XI Comments from the Department of the Interior 90

Appendix XII Comments from the Department of Labor 92

Appendix XIII Comments from the American Samoa Government 95

Appendix XIV GAO Contact and Staff Acknowledgments 101

Related GAO Products 102

Tables

Table 1: Federal Minimum Wages Established through Legislation 

since 1938 12

Table 2: Past and Projected Minimum Wages for Selected 

Industries in American Samoa, 2006-2036 18

Table 3: Projected Cost Increases per Hourly Worker in the 

American Samoa Tuna Canning Industry Due to 

Scheduled Minimum Wage Increases after January 2016 31

Table 4: Average Annual Percentage Increase and Range of 

Annual Increases for Various Cost-of-Living Indices, 

2006-2015 40

Table 5: Criteria for Setting Minimum Wages, Specified by 98 

National Systems in 2005 63
Page iii GAO-17-83 American Samoa

Table 6: Selected Federal Laws Related to Minimum Wages in 

American Samoa, 1938-2015 69

Table 7: Statutory Adjustment Mechanisms for States’ General 

Minimum Wage Laws, by U.S. State 71

Table 8: Summary of Statutory Adjustment Mechanisms for 

States’ General Minimum Wage Laws 74

Table 9: Projected Dates for American Samoa Minimum Wages to 

Converge with Federal Minimum Wage under Past and 

Current Schedules 75

Table 10: Projected Timeframes for American Samoa Minimum 

Wage to Equal the Current Federal Minimum Wage under 

an Indexed Approach, Given Hypothetical Annual 

Increases in the Cost of Living 85

Table 11: Projected Timeframes for American Samoa Minimum 

Wages to Equal the Federal Minimum Wage under a 

Schedule-Based Approach, Given Varying Hypothetical 

Amounts and Frequency of Scheduled Increases 86

Table 12: Hypothetical Example of Supplementing Indexed 

Increases to American Samoa Minimum Wages during 

Periods of Relatively Low Inflation 87

Table 13: Hypothetical Example of Supplementing the Amount of 

Scheduled Increases to American Samoa Minimum 

Wages during Periods of Relatively High Inflation 88

Figures

Figure 1: Location of American Samoa 5

Figure 2: U.S. Citizenship Status of American Samoa Residents, 

1980-2010 6

Figure 3: Pago Pago Harbor 7

Figure 4: Federal Minimum Wage and American Samoa Minimum 

Wages, 1957-2016 20

Figure 5: American Samoa’s Gross Domestic Product with and 

without Adjustment for Inflation, 2002-2015 23

Figure 6: Composition of American Samoa Employment, 2014 24

Figure 7: Value of American Samoa and Foreign Tuna Shipments 

to the United States, 1997-2015 25

Figure 8: American Samoa Employment, 2007-2014 28

Figure 9: American Samoa Average Annual Earnings and 

Inflation-Adjusted Average Annual Earnings, 2007-2014 29

Figure 10: Projected Number of Years until American Samoa’s 

Highest and Lowest Minimum Wages Equal the Current 
Page iv GAO-17-83 American Samoa

Federal Minimum Wage under the Current Schedule and 

Given Historical Trends for Various Cost-of-Living Indices 41

Figure 11: Projected Number of Years until American Samoa’s 

Highest and Lowest Minimum Wages Equal the Current 

Federal Minimum Wage, Given Past and Current 

Schedules of Increases 43

Figure 12: Decision-Making Authority in 145 National Systems for 

Setting Minimum Wages 62

Figure 13: Distribution of Minimum Wage Rate Structures in 144 

National Systems 66

Figure 14: U.S. Department of Labor Poster Outlining Federal 

Minimum Wage Requirements for American Samoa 77

Figure 15: Highest American Samoa Minimum Wage, Adjusted for 

Inflation in American Samoa and the United States, 1997-

2016 79

Figure 16: Comparison of Wage and Tariff Costs for Tuna 

Canneries Using Alternate Business Models 83
Page v GAO-17-83 American Samoa

Abbreviations

BEA Bureau of Economic Analysis (U.S. Department of Commerce)

BLS Bureau of Labor Statistics (U.S. Department of Labor)

CBO Congressional Budget Office

CNMI Commonwealth of the Northern Mariana Islands

CPI consumer price index

CPI-U Consumer Price Index for All Urban Consumers

CPI-W Consumer Price Index for Urban Wage Earners and Clerical

Workers

DOL Department of Labor

FLSA Fair Labor Standards Act

GDP gross domestic product

ILO International Labor Organization

NOAA National Oceanic and Atmospheric Administration (U.S.

Department of Commerce)

PCE personal consumption expenditures

SIC special industry committee

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Page 1 GAO-17-83 American Samoa

441 G St. N.W.

Washington, DC 20548

December 2, 2016

Congressional Committees

American Samoa, a U.S. territory, has historically had higher levels of 

poverty than the U.S. states and has not been subject to the federal 

minimum wage for many years. In 2007, Congress passed legislation that 

established a schedule of periodic increases that would have raised 

minimum wages in American Samoa1 to the current federal minimum 

wage2 ($7.25 per hour) by 2016.3 In subsequent years, Congress passed 

legislation postponing or reducing the scheduled increases.

The most recent of these legislative actions, adopted in 2015, included a 

provision for GAO to report on alternative ways of increasing minimum 

wages in American Samoa to keep pace with the cost of living in the 

territory4 and to eventually equal the federal minimum wage.5 In addition, 

 1

In this report, “minimum wages in American Samoa” refers to federally established 

minimum wages for the territory under 29 C.F.R. Part 697. However, the American Samoa 

government may set local minimum wages, which would be applicable to the extent that 

they were in excess of the coverage or rate, or both, provided by the federal minimum 

wages for the territory.

2

In this report, the term “federal minimum wage” refers to the minimum wage required by 

the Fair Labor Standards Act (FLSA) in the United States, as provided by 29 U.S.C. § 

206(a)(1). Currently the federal minimum wage is in effect in the 50 U.S. states, the 

District of Columbia, and any territory or possession of the United States, subject to 

certain exceptions.

3

Pub. L. No. 110–28, § 8103 (May 25, 2007); 29 U.S.C. § 206 note, Applicability of 

minimum wage to American Samoa and the Commonwealth of the Northern Mariana 

Islands (CNMI). The act also set a schedule for increasing the CNMI’s minimum wage to 

equal the federal minimum wage. The minimum wage provision of the FSLA had not 

previously applied to the CNMI under the 1976 Covenant with the United States 

(Covenant to Establish a Commonwealth of the Northern Mariana Islands in Political 

Union with the United States of America, Pub. L. No. 94-241, § 503(c) (Mar. 24, 1976), 

codified at 48 U.S.C. § 1801 note). Thus, prior to 2007, the CNMI had authority to set its 

own minimum wage. The CNMI’s minimum wage in 2006 was $3.05. Under the current 

schedule, the CNMI’s minimum wage will reach the current federal minimum wage in 

September 2018. We plan to report to Congress on the CNMI minimum wage by April 

2017.

4

In this report, “cost of living” refers to the cost of living in American Samoa, unless stated 

otherwise.

Letter
Page 2 GAO-17-83 American Samoa

prior legislation included a provision for GAO to report on the impact of 

past and future increases in minimum wages in American Samoa by April 

2017. This report examines (1) the history of minimum wages in American 

Samoa; (2) the status of the territory’s economy, including changes in 

employment, earnings, and key industries since scheduled minimum 

wage increases began in 2007; and (3) alternative approaches that could 

be used to ensure that minimum wages in American Samoa keep pace 

with the cost of living and eventually equal the federal minimum wage.

We took the following steps to address these objectives (see app. I for 

further details of our methodology).

• To examine the history of minimum wages in American Samoa, we 

analyzed U.S. Department of Labor (DOL) records. We undertook an 

analysis of the extent to which prior minimum wages in American 

Samoa kept pace with the cost of living and fell at or below the federal 

minimum wage.

• To examine the status of American Samoa’s economy, including 

changes in employment, earnings, and key industries since scheduled 

minimum wage increases began in 2007, we reviewed relevant GAO 

reports6 and analyzed data obtained from the American Samoa 

government; from American Samoa tuna industry employers, in 

response to a questionnaire that we provided; and from the U.S. 

Department of Commerce.7 We used consumer price index (CPI) data 

from American Samoa to determine inflation-adjusted wages.8 We 

 5

Pub. L. No. 114-61, § 1(b) (Oct. 7, 2015). This legislation added to a provision that was 

amended in 2009 for GAO to report on the impact of past and future increases in minimum 

wages in American Samoa and the CNMI (Pub. L. No. 110-28, § 8104 (May 25, 2007)), 

codified as amended at 29 U.S.C. § 206 note, Report on the impact of past and future 

minimum wage increases. We published reports on this topic in 2010, 2011, and 2014. 

See GAO, American Samoa and Commonwealth of the Northern Mariana Islands: Wages, 

Employment, Employer Actions, Earnings, and Worker Views Since Minimum Wage 

Increases Began, GAO-10-333 (Washington, D.C.: Apr. 8, 2010); American Samoa and 

Commonwealth of the Northern Mariana Islands: Employment, Earnings, and Status of 

Key Industries since Minimum Wage Increases Began, GAO-11-427 (Washington, D.C.: 

June 23, 2011); and American Samoa and Commonwealth of the Northern Mariana 

Islands: Economic Indicators since Minimum Wage Increases Began, GAO-14-381 

(Washington, D.C.: Mar. 31, 2014).

6

GAO-10-333, GAO-11-427, and GAO-14-381.

7

We did not review information about workers in the underground economy or identify 

workers who may have been unlawfully paid less than the minimum wage.

8

A CPI measures the average change over time in the prices paid by consumers for a 

market basket of goods and services.
Page 3 GAO-17-83 American Samoa

estimated tuna canneries’ costs in applying future scheduled minimum 

wage increases and interviewed cannery representatives regarding 

the impact of these increases and other competitive challenges facing 

their industry. Although our approach yielded information on trends in 

employment, wages, and earnings in American Samoa, we were not 

able to distinguish between the effects of minimum wage increases 

and the effects of other factors, such as changes in the global 

economy, fluctuations in energy prices, and global trade liberalization. 

Our analyses of employment and earnings included data through 

2014, extended to 2015 where possible. After we had completed our 

analyses and provided a draft of this report to federal agencies and 

the American Samoa government, one of the two companies with 

canning operations in American Samoa announced that it would 

suspend these operations indefinitely in mid-December 2016. Our 

report acknowledges this development as well as earlier 

announcements of short-term suspensions of operations by the other 

company. However, in the absence of full information for 2016, we did 

not revise our overall analyses of changes in employment or earnings 

to reflect these developments.

• To examine alternative approaches for increasing minimum wages in 

American Samoa, we reviewed literature on the minimum wagesetting systems in the United States, in U.S. states with their own 

minimum wage, and in other countries. We also examined cost-ofliving indices generated by the U.S. government and analyzed 

associated data. Using historical cost-of-living data, we estimated the 

length of time it would take for American Samoa’s minimum wages to 

reach the current federal minimum wage under varying rates of 

increase in the cost of living. We produced similar estimates using 

various hypothetical schedules for increasing American Samoa 

minimum wages. We also developed scenarios illustrating how 

indexing and schedule-based approaches could be combined to meet 

both criteria. The scope of our work was limited to examining 

approaches for increasing American Samoa’s minimum wages that 

would directly address the criteria specified for GAO’s review. Our 

work did not cover other programs and policies that could supplement 

the incomes of low-wage workers, such as the Earned Income Tax 

Credit. Our work also did not cover possible adjustments in U.S. trade 

or tax policies that might help offset potential negative impacts of 

minimum wage increases on employers.

We conducted this performance audit from November 2015 through 

December 2016 in accordance with generally accepted government 

auditing standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a reasonable 
Page 4 GAO-17-83 American Samoa

basis for our findings and conclusions based on our audit objectives. We 

believe that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives.

American Samoa consists of five volcanic islands and two coral atolls in 

the South Pacific, located about 2,600 miles southwest of Hawaii (see fig. 

1). The territory has a combined land area of 76 square miles, slightly 

larger than Washington, D.C.

Background

American Samoa
Page 5 GAO-17-83 American Samoa

Figure 1: Location of American Samoa

Note: The area labeled Samoa is also known as the Independent State of Samoa, a nation distinct 

from the U.S. territory of American Samoa.
Page 6 GAO-17-83 American Samoa

The 2010 U.S. Census found American Samoa’s population to be 55,519, 

a decrease of 3 percent from its 2000 population (see fig. 2).9 Individuals 

who are neither U.S. citizens nor U.S. nationals, most of them from the 

Independent State of Samoa, composed approximately 35 percent of the 

territory’s population in that year.10

Figure 2: U.S. Citizenship Status of American Samoa Residents, 1980-2010

Notes: Persons born in American Samoa are U.S. nationals but are not U.S. citizens, unless at least 

one of their parents is a U.S. citizen.

 9

U.S. Census Bureau, 2010 Census, https://www.census.gov/2010census/data/, 

accessed July 14, 2016. The American Samoa government has stated that it believes the 

2010 census undercounted the territory’s population, owing to a mismatch between the 

census count and American Samoa data on births, deaths, and outmigration, among other 

factors, as well as the omission of undocumented immigrants who feared deportation. See 

app. VI of GAO-14-381 for additional detail. 

10Preliminary results from the American Samoa Department of Commerce’s 2015 

Household Income and Expenditures Survey show that as of 2015, the territory’s 

population had grown to 57,436, including 36,952 who were American Samoan by birth. 

About 14,000 were reported to have been born in independent Samoa, about 900 in 

Tonga, and about 1,000 in the Philippines. American Samoa Department of Commerce, 

2015 Household Income and Expenditure Survey Preliminary Findings (Pago Pago: Apr. 

8, 2016). 
Page 7 GAO-17-83 American Samoa

For 1980, data shown for “U.S. citizens or U.S. nationals” include people born in the United States, 

the Commonwealth of the Northern Mariana Islands, Guam, and American Samoa, as reported by the 

1980 census. The census did not report on the citizenship status of the American Samoan population.

The 2010 census also reported that American Samoa’s median 

household income remained well below, and its poverty rate well above, 

those of the United States. In 2009, American Samoa’s median 

household income was $23,892, 47 percent of the U.S. median 

household income; American Samoa’s poverty rate was 57.8 percent, in 

contrast to the U.S. rate of 15.1 percent. Approximately 98 percent of the 

population of American Samoa lives on the main island of Tutuila, and 

most economic activity (including tuna canning) and government 

operations take place in and around the harbor of the capital city, Pago 

Pago, on Tutuila. Most of Tutuila consists of rugged terrain, with little level 

land (see fig. 3).

Figure 3: Pago Pago Harbor

U.S. interest in the Samoan islands began in 1872 with efforts by the U.S. 

Navy to establish a naval station in Pago Pago harbor. A U.S.-BritishGerman protectorate over all Samoan islands ended in 1899, when the 

islands that comprise American Samoa were placed under U.S. control. 

The U.S. Naval Station in the territory was established in 1900.11 From 

 11Joseph Kennedy, The Tropical Frontier: America’s South Sea Colony (Mangilao, Guam: 

University of Guam Micronesian Area Research Center, 2009); J. Robert Shaffer, 

American Samoa: 100 Years under the United States Flag (Honolulu, Hawaii: Island 

Heritage Publishing, 2000).
Page 8 GAO-17-83 American Samoa

1900 through 1904, the U.S. government negotiated control over 

American Samoa,12 and the U.S. Navy subsequently took responsibility 

for federal governance of the territory. In 1951, governance was 

transferred to the Secretary of the Interior.13 In 1960, American Samoa 

residents adopted their own constitution, but amendments to the 

constitution may be made only by an act of Congress.14

Persons born to non-U.S. citizen parents in American Samoa are U.S. 

nationals but may apply to become naturalized U.S. citizens.15 In addition, 

U.S. noncitizen nationals from American Samoa have the right to travel 

freely, live, and work throughout the United States. American Samoa 

exercises authority over its immigration system and customs through 

locally adopted laws.16 While American Samoans may serve in the U.S. 

military, they do not have the right to vote in U.S. national elections and 

do not have voting representation for legislation passed before the full 

U.S. Congress, including legislation setting the minimum wage in 

American Samoa.

 12Two deeds of cession were initially completed between Samoan chiefs, or matai, and 

the United States in 1900 and 1904 and were ratified by the federal government in 1929. 

In these deeds, the United States pledged to promote peace and welfare, to establish a 

good and sound government, and to preserve the rights and property of the people. See 

45 Stat. 1253, c. 281 (Feb. 20, 1929), codified at 48 U.S.C. §1661.

13Transfer of Administration of American Samoa from the Secretary of the Navy to the 

Secretary of the Interior, Exec. Order No. 10,264, 16 Fed. Reg. 6417 (June 29, 1951). The 

Secretary exercised broad powers with regard to American Samoa, including “all civil, 

judicial, and military powers” of government in American Samoa. 48 U.S.C. § 1661(c).

1448 U.S.C. § 1662a.

15American Samoa residents have many of the rights of citizens of the 50 states but 

cannot vote in U.S. national elections and do not have voting representation in the final 

approval of legislation by the full Congress. The delegate from American Samoa has 

many of the same congressional privileges as other representatives, including a vote in 

committee, but cannot vote in the House of Representatives. U.S. noncitizen nationals do 

not have the same preferences as U.S. citizens for sponsoring immediate family members 

for family-based immigration visas. To qualify for the same rights as U.S. citizens, 

noncitizen nationals must become naturalized citizens of the United States, which includes 

a requirement to reside in the United States for 3 months (8 C.F.R. § 325.2). 

16American Samoa is the only U.S. insular area that administers its own immigration 

programs. See GAO, American Samoa: Performing a Risk Assessment Would Better 

Inform U.S. Agencies of the Risks Related to Acceptance of Certificates of Identity, 

GAO-10-638 (Washington, D.C.: June 11, 2010). The U.S. government administers 

immigration functions in other insular areas, such as Guam, the Commonwealth of the 

Northern Mariana Islands (CNMI), and the U.S. Virgin Islands; however, each of these 

insular areas administers its own customs laws.
Page 9 GAO-17-83 American Samoa

The U.S. government has supported American Samoa’s economy 

through trade and tax policies.

• U.S. trade policies provide tariff-free access to the U.S. market for 

processed tuna from American Samoa, while foreign suppliers 

generally are subject to tariffs for these goods. For example, foreign 

suppliers’ canned or pouched tuna packed in oil is subject to a 35-

percent tariff, and their canned or pouched tuna not packed in oil is 

subject to a 12.5 percent tariff.17 However, U.S. trade agreements 

with certain countries may provide those countries tariff-free or 

reduced-tariff access to the United States.18

• U.S. tax policies have reduced federal taxes on income earned by 

qualifying U.S. corporations investing in American Samoa.19 Under 

the Internal Revenue Code, qualifying American Samoa tuna 

canneries have received a tax credit for U.S. corporate income 

taxes.20 Canneries in American Samoa have also benefited from 

exemptions from local taxes.21

 17A lower tariff rate—6 percent—is available for up to 4.8 percent of the prior year’s 

consumption of canned or pouched tuna shipped not packed in oil. For calendar year 

2015, U.S. Customs and Border Protection determined that 15,955 tons of tuna qualified 

for the lower rate.

18According to the U.S. Trade Representative, the United States has free trade 

agreements with 20 countries. 

19In general, income that residents of American Samoa earn from American Samoa 

sources is exempt from individual federal income taxation but is subject to Social Security 

and Medicare taxes.

20Certain tax credits under section 936 of the Internal Revenue Code expired for taxable 

years beginning after December 31, 2005. Section 30A of the Internal Revenue Code 

extended the Section 936 credits for American Samoa until January 1, 2012, subject to 

certain limitations. Corporations that were actively conducting business in American 

Samoa by 1995 and that elected Section 936 status in the last taxable year before 

January 1, 2006, can claim a section 30A tax credit for taxable years that begin before 

January 1, 2012. See 26 U.S.C. § 30A note, as amended by Pub. L. No. 111-312, § 756

(Dec. 17, 2010). For tax years beginning on January 1, 2012, or later, there are new 

requirements, including the requirement that corporations must meet a “qualified 

production activities income.” Section 173 of Pub. L. No. 114-113 (Dec. 18, 2015) extends 

the American Samoa economic development credit for an additional 2 years.

21On December 20, 2012, the American Samoa government agreed to a new local tax 

exemption for the period from January 1, 2013, to December 31, 2022, for one of the two 

tuna canning companies in the territory (StarKist). On October 5, 2010, the other company 

(Tri Marine) received exemption from any taxes from the American Samoa government for 

10 years.

U.S. Government Support 

for the American Samoa 

Economy
Page 10 GAO-17-83 American Samoa

• The United States provides assistance to the government of American 

Samoa. In fiscal year 2015, American Samoa’s single audit reported 

that U.S. federal grants provided $164 million of $255 million in total 

government revenue to American Samoa.22 Ranked by grant 

expenditures, the largest federal grantors were the Departments of 

Health and Human Services ($40.1 million), the Interior ($34.8 

million), Agriculture ($32.7 million), Education ($23.7 million), and 

Homeland Security ($10.2 million).

Systems for setting minimum wages vary across the United States and 

internationally in many respects. Appendix II provides information about 

systems for setting minimum wages around the world, drawn largely from 

the International Labor Organization (ILO).23 Key attributes of these 

systems include the following:

• Decision-making authority: the entity responsible for decisions on 

how to set minimum wages. For example, decisions may be made by 

the government itself or delegated to a board or committee created for 

this purpose.

• Objectives: the primary outcomes that a minimum wage is designed 

to achieve. Such outcomes may relate to the needs of workers, 

conditions facing employers or the overall economy, or both. Systems 

employ varying degrees of specificity in this regard; some list factors 

to be considered, while others define specific criteria.

• Adjustment mechanisms: procedures for making adjustments to a 

minimum wage. For example, a minimum wage may be indexed to an 

economic indicator (e.g., changes in the CPI) and adjusted at 

specified intervals to reflect changes in that indicator.

• Coverage: the population of workers to which a minimum wage 

applies. Some minimum wage systems exclude workers of a certain 

age, industry, or occupation from minimum wage coverage.

• Level: the rate of a minimum wage. This rate may be viewed in 

nominal terms; systems may set a single—usually hourly—minimum 

wage or may set multiple minimum wages that vary by industry, 

occupation, or region. The minimum wage rate may also be viewed in 

comparative terms: Minimum wages may be set at low levels relative 

 22Single Audit Reports for Territory of American Samoa (Sept. 30, 2015).

23The ILO is a specialized agency of the United Nations.

Systems for Setting 

Minimum Wages
Page 11 GAO-17-83 American Samoa

to other indicators (e.g., average wages) and thus apply to a 

comparatively small share of the workforce. Alternatively, they may be 

set at relatively high levels and thus apply to a comparatively large 

share of the workforce.

The federal minimum wage was first enacted as part of the Fair Labor 

Standards Act of 1938 (FLSA).

24 The FLSA specified that for industries 

engaged in commerce or in the production of goods for commerce, its 

policy was to correct and, as rapidly as practicable, to eliminate labor 

conditions detrimental to the maintenance of the minimum standard of 

living necessary for health, efficiency, and general well-being of workers 

without substantially curtailing employment or earning power.25 Since 

1938, there have been nine amendments to the FLSA establishing new 

minimum wages and usually raising the rate through a series of steps 

over 2 to 4 years (see table 1; also see table 6 in app. III for a summary of 

selected federal laws related to minimum wages in American Samoa).

 24Pub. L. No. 75-718 (June 25, 1938). For additional information, see David H. Bradley, 

The Federal Minimum Wage: In Brief, R43089 (Washington, D.C.: Congressional 

Research Service, Jan. 13, 2015); David H. Bradley, Benjamin Collins, and Sarah A. 

Donovan, The Fair Labor Standards Act (FLSA): An Overview, R42713 (Washington, D C: 

Congressional Research Service, Jan. 2, 2014). 

25Job losses have been cited as a potential negative result of introducing or raising 

minimum wages. For example, in February 2014, the Congressional Budget Office issued 

a study of two options for raising the federal minimum wage in a series of steps to $9.00 

or to $10.10. The study included a range of estimated outcomes, with midpoint 

estimations that these increases would reduce total U.S. employment by about 100,000 or 

500,000 workers, respectively. However, at the same time, the study found that the 

increases would raise earnings for 7.6 million or 16.5 million workers and would, on a net 

basis, lift 300,000 or 900,000 people, respectively, above the poverty threshold. See 

Congressional Budget Office, The Effects of a Minimum-Wage Increase on Employment 

and Family Income, (Washington, D.C.: February 2014). In commenting on a draft of this 

report, DOL stated that studies examining the employment impact of increases in the 

minimum wage have found a range of effects, with varying degrees of reliability, and that 

the majority of these studies have concluded that minimum-wage increases have had little 

to no significant effect on employment of low-wage workers. See app. XII for a copy of 

DOL’s comments.

Minimum Wages in the 

United States
Page 12 GAO-17-83 American Samoa

Table 1: Federal Minimum Wages Established through Legislation since 1938

Legislation (date enacted) Wage ratea Effectivedate of wage rate

Pub. L. No. 75-718 (June 1938) 0.25

0.30

0.40

Oct. 1938

Oct. 1939

July 1944

Pub. L. No. 81-393 (Oct. 1949) 0.75 Jan. 1950

Pub. L. No. 84-381 (Aug. 1955) 1.00 Mar. 1956

Pub. L. No. 87-30 (May 1961) 1.15

1.25

Sept. 1961

Sept. 1963

Pub. L. No. 89-601 (Sept. 1966) 1.40

1.60

Feb. 1967

Feb. 1968

Pub. L. No. 93-259 (Apr. 1974) 2.00

2.10

2.30

May 1974

Jan. 1975

Jan. 1976

Pub. L. No. 95-151 (Nov. 1977) 2.65

2.90

3.10

3.35

Jan. 1978

Jan. 1979

Jan. 1980

Jan. 1981

Pub. L. No. 101-157 (Nov. 1989) 3.80

4.25

Apr. 1990

Apr. 1991

Pub. L. No. 104-188 (Aug. 1996) 4.75

5.15

Oct. 1996

Sept. 1997

Pub. L. No. 110-28 (May 2007) 5.85

6.55

7.25

July 2007

July 2008

July 2009

Legend: Pub. L. No. = Public Law Number.

Source: GAO analysis of U.S. public laws establishing and amending the Fair Labor Standards Act of 1938.

a

Wage rates shown are not adjusted for inflation.

The U.S. federal minimum wage applies generally to any employee 

engaged in commerce or the production of goods for commerce, with 

certain exemptions.26 For example, federal minimum wage and overtime 

requirements do not apply to individuals engaged in agriculture if their 

employer is an immediate family member. These exemptions are also 

 2629 U.S.C. § 206(a).
Page 13 GAO-17-83 American Samoa

extended to individuals processing seafood while at sea.27 As of July 

2009, the federal minimum wage was set at $7.25 per hour. According to 

DOL, 3.3 percent of workers in the United States who were paid on an 

hourly basis in 2015 earned wages at or below the federal minimum 

wage.28

In general, individual U.S. states, the District of Columbia, and local 

governments may also set their own minimum wages.29 As of January 

2016, all but five U.S. states, as well as many cities and counties, had 

adopted their own minimum wage laws. According to the DOL, as of 

January 2016, 29 states and the District of Columbia had established 

minimum wages that are higher than the federal minimum wage.30 In 

addition, according to data assembled by the University of California 

Center for Labor Research and Education, 40 U.S. cities and counties 

have adopted minimum wages that are higher than the federal minimum 

wage.31 Some states and localities have scheduled increases to their 

minimum wages in a series of steps over several years. Others adjust

their minimum wage by indexing it to an economic indicator—in most of 

these cases to a CPI as calculated by the Bureau of Labor Statistics 

(BLS).32 (See app. IV for a summary of state minimum wage laws.)

 2729 U.S.C. § 213(a)(5). As the exemption only applies to these activities when performed 

at sea, employees engaged in these activities on shore do not qualify for the exemption. 

See 29 C.F.R. § 784.130.

28Department of Labor Bureau of Labor Statistics, “Characteristics of Minimum Wage 

Workers, 2015” (Washington, D.C.: April 2016).

29See 29 U.S.C. § 218(a).

30According to DOL, the remaining states either specify that the federal minimum wage 

shall apply, provide for lower minimums that may only apply to workers not covered by the 

FLSA, or have no minimum wage law whatsoever.

31University of California, Berkeley, “Inventory of U.S. City and County Minimum Wage 

Ordinances” (Berkeley, Calif: Center for Labor Research and Education, 2016), accessed 

October 4, 2016, http://laborcenter.berkeley.edu/minimum-wage-living-wageresources/inventory-of-us-city-and-county-minimum-wage-ordinances/.

32For a review of consideration of indexing at the federal level, see William G. Whittaker, 

Possible Indexation of the Federal Minimum Wage: Evolution of Legislative Activity

RL33791 (Washington, D.C.: Congressional Research Service, Feb. 29, 2008). 
Page 14 GAO-17-83 American Samoa

For 5 decades beginning in 1956, federal policy called for the minimum 

wage rates for industries in American Samoa to reach the federal 

minimum wage as rapidly as was economically feasible without 

substantially curtailing employment. Special industry committees (SIC) 

were directed to recommend the highest minimum wages for industries in 

American Samoa that would not substantially curtail employment in the 

industry or give any industry in American Samoa a competitive advantage 

over any industry in the rest of the United States.33 In 2007, Congress 

passed the Fair Minimum Wage Act of 2007, which eliminated the SICs 

and created a schedule of increases to American Samoa minimum wages 

that has since been revised and applied over a number of years.34 Since 

1957, American Samoa minimum wages have generally remained below 

the federal minimum wage. American Samoa minimum wages did not 

keep pace with changes in the cost of living in American Samoa in the 

decade before 2007 but have generally kept pace since then.

From 1957 to 2006, SICs periodically recommended minimum wages for 

American Samoa. While the FLSA was enacted in 1938, according to 

testimony before congressional committees in 1956, wages in American 

Samoa were generally below the federal minimum wage in effect at that 

time for a variety of reasons.35 The act was amended in 1956 to provide 

for American Samoa minimum wages to be established through an SIC 

process similar to that used in Puerto Rico and the U.S. Virgin Islands.36

(See text box.)

 33SICs were composed of representatives from industry, employees in each industry, and 

the general public in American Samoa. 

34App. III summarizes selected federal legislative actions affecting minimum wages in 

American Samoa since 1938. 

35See 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.

36Pub. L. No. 84-1023 § 2 (Aug. 8, 1956).

History of Minimum 

Wages in American 

Samoa

Special Industry 

Committees Set American 

Samoa Minimum Wages 

from 1957 to 2006
Page 15 GAO-17-83 American Samoa

SICs and Scheduled Minimum Wage Increases in Puerto Rico and the U.S. Virgin 

Islands

In its progression from special industry committees (SIC) to scheduled increases, the 

history of minimum wage-setting in American Samoa is similar to that of two other U.S. 

territories, Puerto Rico and the U.S. Virgin Islands. Although the United States does not 

currently use special purpose boards or committees to set federal minimum wages, the 

Fair Labor Standards Act of 1938 (FLSA), as originally written, provided that “industry 

committees” could be employed to recommend minimum wages, with a view toward

increasing the wages in lower-wage industries to reach the newly established statutory 

minimum wage.

a This provision was briefly applied in the United States and, in 1940, 

Congress enacted legislation to apply it in Puerto Rico as well as the U.S. Virgin 

Islands. 

Beginning in the 1970s, Congress passed legislation that set minimum wages for 

certain industries in these two territories to equal the federal minimum wage and 

created a schedule of increases for minimum wages in the remaining industries to 

eventually equal the federal minimum wage.b These minimum wage increases were 

subject to potentially higher increases as recommended by the SICs. Minimum wages 

in the U.S. Virgin Islands reached parity with the federal minimum wage by 1989, when 

Congress passed legislation amending the FLSA to eliminate the SIC provisions for 

setting minimum wages in that territory. The same act provided for a final series of 

increases to bring all minimum wages in Puerto Rico to parity with the federal minimum 

wage by April 1, 1996.c

Source: GAO analysis of legislative history. | GAO-17-83

Notes: For additional discussion, see William G. Whittaker, Minimum Wage in the Territories and 

Possessions of the United States: Application of the Fair Labor Standards Act, RL30235 

(Washington, D.C.: Congressional Research Service, Mar. 12, 2008).

a

Pub. L. No. 75-718 (June 25, 1938)

b

See Pub L. No. 93-259, § 5 (Apr. 8, 1974); and Pub. L. No. 95-151, § 2(d) (Nov. 1, 1977).

c

See Pub. L. No. 101–157, § 4(b)(1) (Nov. 17, 1989).

The SICs were directed to investigate conditions in all industries and 

enterprises in American Samoa covered by the FLSA and to file a report 

containing their findings of fact and recommendations for minimum wages 

with the Secretary of Labor. The FLSA charged the SICs with 

recommending the highest minimum wages possible without substantially 

curtailing employment in the industry and without giving any industry in 

American Samoa a competitive advantage over any industry in the rest of 

the United States. After the SICs filed their report with the Secretary of 

Labor, the Secretary was required to issue a wage order establishing 

minimum wages in American Samoa based on SIC recommendations 

after the expiration of 15 days, following the publication of the 

recommendations in the Federal Register.

The Secretary of Labor was directed to appoint each SIC’s chairman and 

an equal number of members to represent the American Samoa public, 

employees in the industry, and employers in the industry. In addition, the 

Secretary was to provide each SIC with an economic report containing 
Page 16 GAO-17-83 American Samoa

data on the matters before the SIC, as well as a lawyer and an economist 

to assist the committee. The DOL appointed the first SIC in 1957 and 

appointed subsequent SICs periodically thereafter.

The SICs recommended minimum wages for a growing number of 

industry categories. The first SIC recommended minimum wages below 

the federal minimum wage for each of four industry categories—fish 

canning and processing, shipping and transportation, petroleum 

marketing, and miscellaneous industries. These categories changed over 

the course of the SIC period. The final SIC, which recommended 

minimum wages to be applied in 2005 and 2006, recommended minimum 

wages for 18 industry categories. These 18 industry categories remain in 

existence for present-day minimum wages in American Samoa.

Since 2007, federal legislation has determined minimum wages in 

American Samoa. The Fair Minimum Wage Act of 2007 amended the 

FLSA, raising the federal minimum wage from $5.15 to $7.25 per hour in 

a series of three steps. Initially, when the bill for the Fair Minimum Wage 

Act of 2007 was introduced in the U.S. House of Representatives, it did 

not mention American Samoa; however, according to floor statements 

attached to the bill, it was subsequently amended to include the territory 

after some congressmen expressed concern that the act’s application of 

the minimum wage increases to the CNMI, but not American Samoa, 

represented a “loophole” to benefit the tuna industry. The amended 

provision eliminated the SICs and introduced a schedule for raising the 

minimum wages, by equal amounts, until all 18 minimum wage categories 

in American Samoa reached the federal minimum wage.37 According to 

the DOL, when the law was enacted, nearly 80 percent of eligible 

 37The Fair Minimum Wage Act of 2007 repealed the FLSA sections related to the SICs as 

well as the wage orders issued pursuant to the SICs’ recommendations. A bill in Congress 

in 1992 proposed increasing minimum wages in American Samoa more rapidly by setting 

floors for the SICs’ recommendations over a period of 3 years. At that time, 

representatives of the American Samoa government and tuna canneries operating in 

American Samoa expressed opposition to more rapid increases and concern that 

increasing the minimum wage for the tuna industry would harm an industry that was 

essential to the local economy. However, the American Samoa delegate to Congress 

supported minimum wage increases, citing rising costs of living. House Committee on 

Education and Labor, Subcommittee on Labor Standards, Minimum Wage Rates in 

American Samoa, Hearing on H.R. 4011, 102nd Cong., 2nd Sess., June 3, 1992.

American Samoa 

Minimum Wage Increases 

Have Been Set by Law 

since 2007
Page 17 GAO-17-83 American Samoa

American Samoa workers earned less than $7.25 per hour.38 Since 2007, 

the schedule has been amended four times to delay or reduce scheduled 

increases.

After the initial Fair Minimum Wage Act of 2007 schedule, each 

subsequent law revising the schedule of minimum wage increases for 

American Samoa extended the projected dates for American Samoa 

minimum wages to reach the federal minimum wage. The initial (2007) 

schedule, which called for $0.50 annual increases, would have increased 

all American Samoa minimum wages to the current federal level by May 

2016. Measures adopted in 200939 and 201040 retained the $0.50 

increases but delayed their application, so that convergence between 

American Samoa minimum wages and the federal minimum wage would 

have occurred in 2018 rather than 2016. Subsequent measures—

applying increases every third year41 and reducing each increase from 

$0.50 to $0.4042—delayed convergence of American Samoa minimum 

wages with the federal minimum wage by more substantial intervals. 

(App. V shows the projected dates for American Samoa minimum wages 

to converge with the federal minimum wage under the past and current 

legislated schedules.)

If American Samoa minimum wages continue to increase by $0.40 every 

3 years as scheduled, and if the current federal minimum wage does not 

increase, the highest minimum wage in American Samoa, for the 

stevedoring (dockworker) industry, will reach the federal minimum wage 

in 2027, while the lowest minimum wage, for the garment manufacturing 

industry, will reach the federal minimum wage in 2036. Minimum wages 

for the largest employer overall, government, and the largest privatesector employer, the fish canning and processing industry, will reach the 

federal minimum by 2036 and 2033, respectively. Table 2 shows past and 

projected American Samoa minimum wages for these industries. (See 

 38Department 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,” prepared in response to the requirements of Pub. L. No. 110-

28, § 8104 (May 25, 2007) (Washington, D.C.: January 2008). The Department of Labor 

based this finding on the results of a DOL survey prepared for SIC no. 27.

39Pub. L. No. 111-117.

40Pub. L No. 111-224.

41Pub. L. No. 112-149.

42Pub. L. No. 114-61.
Page 18 GAO-17-83 American Samoa

app. VI for the DOL Wage and Hour Division publication of the current 

federal minimum wage in American Samoa by industry.) However, any 

change in the current federal minimum wage will alter the projected dates 

when American Samoa minimum wages will reach the federal minimum 

wage. If the federal minimum wage rises above $7.25 before all American 

Samoa minimum wages reach that level, then American Samoa minimum 

wages will reach the federal minimum wage sometime after the current 

projected timeframe of 2027-2036. Federal legislation to increase the 

federal minimum wage was last passed in 2007, with annual increases 

phased in over 3 years. Before 2007, there had been no increase in the 

federal minimum wage for 10 years.

Table 2: Past and Projected Minimum Wages for Selected Industries in American Samoa, 2006-2036

U.S. dollars per hour 

Date of increase

Garment 

manufacturinga Government sectorb Fish canning and processingc Stevedoringd

Past Oct. 1, 2006 $2.68 $2.91 $3.26 $4.09

July 25, 2007 3.18 3.41 3.76 4.59

May 25, 2008 3.68 3.91 4.26 5.09

May 25, 2009 4.18 4.41 4.76 5.59

Sept. 30, 2015 4.58 4.81 5.16 5.99

Projected Sept. 30, 2018 4.98 5.21 5.56 6.39

Sept. 30, 2021 5.38 5.61 5.96 6.79

Sept. 30, 2024 5.78 6.01 6.36 7.19

Sept. 30, 2027 6.18 6.41 6.76 7.25

Sept. 30, 2030 6.58 6.81 7.16 7.25

Sept. 30, 2033 6.98 7.21 7.25 7.25

Sept. 30, 2036 7.25 7.25 7.25 7.25

Source: GAO analysis of minimum wage increases scheduled in Public Law (P.L.) 110-28, P.L. 111-17, P.L. 111-224, P.L. 112-149, and P.L. 114-61. | GAO-17-83

Notes: Minimum wages shown reflect actual rates, in nominal dollar amounts, through September 30, 

2015, and projected rates under the current schedule of increases for later years. Shaded areas 

denote the point at which the indicated American Samoa minimum wages converge with the current 

federal minimum wage of $7.25.

The wages shown in italics for October 1, 2006, were recommended by Special Industry Committee 

No. 26. The wages shown for July 25, 2007, through September 30, 2036, reflect increases 

scheduled by federal law.

a

Garment manufacturing has the lowest minimum wage of any industry in American Samoa.

b

The government sector is the largest employer in American Samoa.

c

Fish canning and processing is the largest private-sector employer in American Samoa.

d

Stevedoring (stevedoring, lighterage, and maritime shipping agency activities)—one of three 

classifications (“Classification A”) in the shipping and transportation industry—has the highest 

minimum wage of any industry in American Samoa.
Page 19 GAO-17-83 American Samoa

Since 1957, American Samoa minimum wages have risen, first as 

recommended by SICs and then in accordance with schedules set by 

legislation. However, with the exception of 1986, when the highest 

American Samoa minimum wages—for fish canning and processing, 

petroleum marketing, and stevedoring—converged with the federal 

minimum wage of $3.35, American Samoa minimum wages have 

remained below the federal minimum wage. (See fig. 4.) The DOL had 

advised the SIC that once the minimum wage rates in American Samoa 

converged with the federal minimum wage, they would remain at that 

level, unchanged by later SICs. Among American Samoa residents who 

testified in 1986 before the 17th SIC, employees favored the minimum 

wage increase, tuna cannery representatives opposed the increase, and 

government representatives expressed mixed opinions. Congress passed 

legislation declaring that the final rule establishing new minimum wage 

rates based on the findings of the 17th SIC would have no effect and 

directing that another SIC establish new rates based on the FLSA.43 In 

1987, according to an American Samoa government report, the minimum 

wage for the fish canning and processing industry decreased to $2.82 per 

hour, and the minimum wages for petroleum marketing and stevedoring 

both decreased to $2.80 per hour. No minimum wage in American Samoa 

has since converged with the federal minimum.

 43Pub. L. No. 99-396, § 11 (Aug. 27, 1986).

Minimum Wages in 

American Samoa Remain 

Lower Than the Federal 

Minimum Wage
Page 20 GAO-17-83 American Samoa

Figure 4: Federal Minimum Wage and American Samoa Minimum Wages, 1957-2016

Notes: The minimum wages presented for American Samoa are the federally determined (either via 

SIC recommendation or legislation) minimum wages for the territory.

The highest and lowest minimum wages shown represent the industry categories with the highest and 

lowest minimum wages in American Samoa in each year. Minimum wages exist for multiple industry 

categories in American Samoa; however, the number and types of categories have shifted over time. 

From 1957 to 2006, the industry categories with the highest and lowest minimum wages changed 

over time. Since 2006, stevedoring has had the highest minimum wage, and garment manufacturing 

has had the lowest minimum wage in American Samoa.

Minimum wages for the government sector and for fish canning and processing represent minimum 

wages for the largest employer and the largest private-sector employer, respectively.
Page 21 GAO-17-83 American Samoa

The average annual growth rate of American Samoa minimum wages 

was higher from 1957 to 2006, under the SIC system, than since 2006, 

when scheduled increases began, possibly reflecting differences in 

inflation rates during the two periods. Under the SICs, the highest and 

lowest minimum wages in American Samoa increased at an annual 

average rate of 4.2 percent and 4.4 percent, respectively. In contrast, 

from 2006 through 2016, the highest and lowest minimum wages 

increased at an annual average rate of 3 percent and 4.2 percent, 

respectively. The average annual growth rate of the federal minimum 

wage was also higher in the earlier period—3.9 percent—than in the later 

period—1.6 percent. The difference between the American Samoa and 

federal minimum wage growth rates before and after 2006, when the Fair 

Minimum Wage Act of 2007 amended the FLSA, may reflect, in part, 

pronounced differences in inflation during those two periods: Prices in the 

United States grew annually by an average of 4.1 percent from 1957 to 

2006 and by an average of 1.8 percent from 2006 to 2015.

Minimum wages in American Samoa are currently higher relative to the 

federal minimum wage than they were during the SIC period. At present, 

American Samoa minimum wages are 63 to 83 percent of the federal 

minimum wage. In contrast, American Samoa minimum wages were 35 to 

45 percent of the federal minimum in 1957 and were 52 to 79 percent of 

the federal minimum wage in 2006.44

From 1997 through 2006, the later years of the SIC period, minimum 

wages in American Samoa declined when adjusted for change in the cost 

of living in either American Samoa or the United States overall. Since 

scheduled increases in American Samoa minimum wages began in 2007, 

however, minimum wages have generally kept pace with these 

changes.45 The scheduled minimum wage increases in 2007, 2008, and 

2009 raised minimum wages when adjusted for inflation in either 

 44According to DOL, in 1957 the highest American Samoa minimum wage was $0.45, and 

the lowest was $0.35—respectively, $0.55 and $0.65 less than the federal minimum wage 

of $1.00. Currently the highest minimum wage in American Samoa is $5.99, and the 

lowest is $4.58—respectively, $1.26 and $2.67 less than the federal minimum wage of 

$7.25.

45The cost of living in American Samoa is measured by the American Samoa CPI, 

produced by the American Samoa government; data are available from 1997. The cost of 

living in the United States is measured by the U.S. city average CPI, produced by the 

BLS.

Since 2007, Minimum 

Wages in American 

Samoa Have Generally 

Kept Pace with Changes 

in the Cost of Living
Page 22 GAO-17-83 American Samoa

American Samoa or the United States overall. Inflation-adjusted minimum 

wages then declined, as scheduled increases were postponed through 

2014, but they rebounded as the most recent scheduled increase went 

into effect in 2015. Overall, minimum wages in American Samoa, if 

adjusted for inflation in either the territory or the United States, are slightly 

higher today than in the year before scheduled increases began. For 

example, if adjusted for inflation in American Samoa, the highest 

minimum wage in the territory was about 4 percent higher in 2016 than in 

2006. If adjusted for inflation in the United States, the highest minimum

wage was about 24 percent higher in 2016 than in 2006. However, when 

adjusted for inflation in American Samoa, the highest minimum wage rate 

in the territory was lower in 2016 than in 1997, despite the scheduled 

increases that began in 2007. (App. VII illustrates changes in the highest 

minimum wage from 1997 through 2016.)

Government and tuna canning remain the territory’s largest employers, 

although tuna exports and tuna cannery employment have declined. Total 

employment declined from 2007 through 2010 but rebounded through 

2014, while tuna cannery employment fell by 50 percent. Adjusted for 

inflation in American Samoa, earnings for all employees also declined 

from 2007 levels, although the minimum wage for cannery workers 

increased. According to the tuna canneries, the canning industry faces a 

number of challenges, including rising labor costs, decreased access to 

fisheries, and erosion of preferential trade status. One of the two 

companies with canning operations in American Samoa recently 

announced that it would indefinitely suspend these operations, while the 

other temporarily suspended operations for the second time in a year. 

The American Samoa government has indicated that it sees minimum 

wage increases to be in conflict with sustainable economic development.

American Samoa’s GDP and GDP per capita are lower than those of the 

United States.

• The U.S. Department of Commerce’s Bureau of Economic Analysis 

(BEA) estimated American Samoa’s GDP in 2015 at $641 million.

Status of the 

American Samoa 

Economy

American Samoa’s Gross 

Domestic Product
Page 23 GAO-17-83 American Samoa

• American Samoa’s GDP per capita in 2015 was $11,167—

approximately 80 percent less than the overall U.S. GDP per capita of 

$56,066.46

From 2005 to 2015, American Samoa’s real GDP—that is, adjusted for 

inflation in the territory in 2009 dollars—fell by 13 percent, and its GDP 

per capita fell by 0.6 percent from 2005 to 2015, even as its population 

declined. (Fig. 5 shows American Samoa’s GDP in 2002 through 2015 

with and without inflation adjustment, as measured by the U.S. BEA.) 

When adjusted for inflation, the U.S.’ GDP rose by 15 percent, and its 

GDP per capita rose by 6 percent during the same period.

Figure 5: American Samoa’s Gross Domestic Product with and without Adjustment 

for Inflation, 2002-2015

 46According to the World Bank, American Samoa’s GDP per capita places it in the 

category of an upper-middle-income country.
Page 24 GAO-17-83 American Samoa

According to the BEA, changes in American Samoa’s tuna industry have 

been important determinants of changes in its GDP. For example, the 

BEA attributes the decline in the territory’s GDP to declines in activity in 

the tuna canning industry, such as when canned tuna exports fell in 2010. 

However, according to the BEA, increased activity in the tuna industry in 

2014, including the construction of a multimillion-dollar tuna processing 

plant, contributed to growth in private investment and goods exports due 

to an increase in exports of canned tuna.

The government sector and the tuna canning industry have historically 

employed the largest numbers of workers in American Samoa. In 2014, 

the government sector employed about 42 percent of the workforce in 

American Samoa, and the canneries employed about 14 percent (see fig. 

6).

Figure 6: Composition of American Samoa Employment, 2014

Government and Tuna 

Canning Remain Key 

Sectors of the Economy
Page 25 GAO-17-83 American Samoa

Tuna exports to the United States from all sources, and from American 

Samoa in particular, have dropped over the last few years (see fig. 7).47

From 2008 to 2015, the nominal dollar value of canned tuna exported to 

the United States from American Samoa fell by 37 percent.48

Figure 7: Value of American Samoa and Foreign Tuna Shipments to the United 

States, 1997-2015

Note: The values shown reflect the “free alongside ship” value; that is, the value of exports at the 

country seaport, airport, or border port of export, based on the transaction price, including inland 

freight, insurance, and other charges incurred in placing the merchandise alongside the carrier at the 

country port of exportation.

 47According to one tuna expert we interviewed, the general decline in tuna exports to the 

United States reflects a shift in consumer preferences. Data published by the National 

Oceanic and Atmospheric Administration (NOAA) show that U.S. per capita consumption 

of canned tuna fell by 25 percent from 2004 to 2014. National Marine Fisheries Service, 

Fisheries of the United States, 2014, eds. Alan Lowther and Michael Liddel (Silver Spring, 

MD: NOAA, Current Fishery Statistics No. 2014, September 2015), 

https://www.st.nmfs.noaa.gov/commercial-fisheries/fus/fus14/index, accessed Aug. 7, 

2016.

48In 2015, tuna shipments represented more than 99 percent of American Samoa’s $367 

million in commodity exports to the United States.
Page 26 GAO-17-83 American Samoa

Three tuna canneries have operated in American Samoa in the last 

decade.

• StarKist Co. has had a cannery in American Samoa for more than 50 

years. In 2008, the StarKist brand was purchased from Del Monte 

Foods (USA) by Dongwon Industries (South Korea), a multinational 

firm that has diversified into multiple sectors of the seafood industry 

as well as many other industries. Dongwon Industries also has, or is 

developing, production facilities in Ecuador, Senegal, Thailand, and 

Papua New Guinea.49 StarKist’s headquarters remains in Pittsburgh, 

Pennsylvania. As of January 2016, StarKist employed 2,094 hourly 

wage workers in American Samoa.

• Chicken of the Sea International’s parent company, Thai Union 

(Thailand), closed its American Samoa cannery in September 2009. 

The company relocated its canning operations to the U.S. state of 

Georgia while outsourcing the more labor-intensive processes, 

including cleaning and cooking tuna loins (a low-tariff U.S. import), to 

countries with lower labor costs. Chicken of the Sea’s headquarters is 

located in San Diego, California.

• Tri Marine International, a trading company with investments in 

fishing, processing, trading, and marketing, acquired the former 

Chicken of the Sea facility in American Samoa, located adjacent to 

the StarKist cannery, on October 5, 2010. Tri Marine’s headquarters is 

located in Bellevue, Washington. As of January 2016, Tri Marine 

employed 616 hourly wage workers in American Samoa. Tri Marine 

announced in October 2016 that it would indefinitely suspend canning 

operations at this facility in December.

The canneries have provided a number of indirect benefits to other 

industries and the economy in American Samoa. For example, many 

businesses exist to support the canneries, such as the company that 

manufactures the cans. Maintenance for the canneries and for the 

vessels that supply the canneries also has brought business and jobs to 

the island. Cannery workers spend money at local establishments, such 

as restaurants and retail stores. Additionally, exported cannery products 

and delivery of materials to the canneries reduced the shipping cost of 

bringing other goods to American Samoa.

 49In 2014, we reported that, according to StarKist, approximately 85 percent of its labor 

force was not American Samoan. Many citizens of the independent state of Samoa reside 

in American Samoa on a long-term basis, including spouses and relatives of American 

Samoans. See GAO-14-381. 
Page 27 GAO-17-83 American Samoa

From 2007 to 2014, total employment in American Samoa declined and 

then increased, while tuna cannery employment increased before 

dropping sharply (see fig. 8). In 2014, total American Samoa employment 

was about 4 percent lower than in 2007, while cannery employment was 

about 50 percent of its 2007 level. Because American Samoa tax data 

were not yet available for 2015, we were unable to determine the overall 

level of employment for that year. However, our survey of cannery 

employers indicated that from June 2014 to June 2015, the number of 

hourly workers at the canneries increased by about 17 percent (from 

2,315 to 2,704).50

 50The data presented for American Samoa employment are based on our analysis of 

employee data from the American Samoa Department of Treasury, Office of Taxation, as 

well as responses from tuna canning industry employers to our questionnaire. The 

American Samoa tax data are a count of persons employed at any point during the tax 

year by the employer. The number of cannery employees, estimated on the basis of 

responses to our questionnaire, is a count of hourly employees at the canneries as of a 

specific pay period in the given year. See app. I for a full discussion of our methodology.

American Samoa 

Employment and InflationAdjusted Earnings Have 

Declined since 2007

Total Employment Fell and 

Rebounded from 2007-2014, 

while Cannery Employment 

Declined
Page 28 GAO-17-83 American Samoa

Figure 8: American Samoa Employment, 2007-2014

Note: In 2009, an earthquake, followed by a tsunami, caused severe damage in American Samoa. 

The federal government issued a disaster declaration and assisted with tsunami recovery efforts, 

including temporary employment in support of recovery efforts. In 2011, we reported that 2,000 to 

3,000 temporary jobs in American Samoa, for which funding began in 2009, would end when federal 

funding was no longer available and that, as a result, counts of the total number employed during this 

period would exceed the number of long-term positions. The great majority of the temporary jobs 

were disaster-recovery positions related to the tsunami. In addition, the Census Bureau employed 

enumerators and managers to assist with collection of 2010 Decennial Census data, and Recovery 

Act funds supported workers on infrastructure projects and in other fields. See GAO-11-427.

From 2007 to 2014, average annual inflation-adjusted earnings of 

American Samoa workers fell by about 11 percent.51 This decline reflects 

an approximately 22-percent increase in average annual earnings and a 

38-percent increase in prices as measured by the American Samoa CPI. 

During the last year of this period (2013-2014), average inflation-adjusted 

earnings fell by 1 percent, reflecting static average earnings accompanied 

by a 1-percent increase in prices. From 2014 to 2015, prices in American 

Samoa fell by 0.9 percent (during the same period, the U.S. CPI 

increased by 0.1 percent). Figure 9 shows the average annual earnings 

 51We are unable to report American Samoa earnings data for 2015 because American 

Samoa tax data for 2015 were not available. 

Average Inflation-Adjusted 

Earnings of All Employees 

Declined in 2007-2014, while 

Cannery Workers’ Minimum 

Wage Increased
Page 29 GAO-17-83 American Samoa

and average annual inflation-adjusted earnings in American Samoa in 

2007 to 2014.

Figure 9: American Samoa Average Annual Earnings and Inflation-Adjusted 

Average Annual Earnings, 2007-2014

From 2007 to 2015, the hourly wage of minimum wage cannery workers 

who retained their jobs rose by a greater percentage than prices in 

American Samoa, as measured using the American Samoa CPI.52 By 

2015, the minimum wage had risen by 58 percent (from $3.26 to $5.16) 

since the first half of 2007—before the minimum wage was increased in 

that year—while prices rose by 36 percent. From 2014 to 2015, the 

minimum wage rose by 8 percent (from $4.76 to $5.16), while prices fell 

by 1 percent.

 52Because earnings data do not allow for a direct comparison of average and minimum 

wage annual earnings and do not allow for tracking the earnings of workers who lost their 

jobs, this analysis does not capture the effect of minimum wage workers who may have 

become unemployed.
Page 30 GAO-17-83 American Samoa

As American Samoa minimum wage increases continue, they will affect a 

growing percentage of workers in the territory’s tuna canning industry.53

American Samoa employers’ responses to our questionnaire regarding 

workers’ wages as of January 2016 indicated that the scheduled increase 

of the industry’s minimum wage to $5.56 in September 2018 would affect 

91 percent of canning industry hourly workers, who currently earn that 

amount or less.54 Future minimum wage increases would affect the 

wages of 93 percent of current cannery hourly workers when the 

industry’s minimum wage reaches $5.96 in September 2021 and would 

affect 98 percent of current canning industry hourly workers when it 

reaches $7.25 in 2033. By 2033, the extra annual cost added by minimum 

wage increases after January 2016 would be approximately $4,027 per 

worker (see table 3).55

 53From June 2014 to January 2016, both the minimum wage and the median wage of 

hourly workers in the tuna canning industry increased by 8 percent, from $4.76 to $5.16. 

From 2007 to 2016, as a result of previous minimum wage increases, the median wage 

among workers in the tuna canning industry employed by questionnaire respondents rose 

by 56 percent, from $3.30 to $5.16 per hour.

54A scheduled increase in the minimum wage would not directly affect the wages of any 

workers already earning the amount of the new minimum. However, because their wages 

would be subject to subsequent scheduled increases, we include such workers in the 

percentages that would be affected. Available data do not show any workers currently 

earning the precise amounts of the scheduled minimum wages.

55We identified the additional cost by calculating the difference between the cost per 

worker in January 2016 and the cost per hourly worker through 2033, based on the 

scheduled minimum wage increases and averaged across all workers. See app. I for 

further details of our methodology.

American Samoa Tuna 

Canning Industry Faces 

Challenges, and 

Canneries Plan to Reduce 

Operations

Scheduled Minimum Wage 

Increases Will Eventually 

Affect Wages of Almost All 

Tuna Cannery Workers
Page 31 GAO-17-83 American Samoa

Table 3: Projected Cost Increases per Hourly Worker in the American Samoa Tuna 

Canning Industry Due to Scheduled Minimum Wage Increases after January 2016

Date of 

scheduled 

minimum wage 

increase

Minimum wage 

of cannery 

workers

Percentage of 

workers 

covered by the 

new minimum 

wage

Increase in 

average hourly 

costs per 

worker since 

Jan. 2016

Increase in 

average annual 

costs per 

worker since 

Jan. 2016

Sept. 30, 2018 $5.56 90.5 $0.32 $672

Sept. 30, 2021 $5.96 93.1 $0.69 $1,438

Sept. 30, 2033 $7.25 97.8 $1.93 $4,027

Source: GAO analysis of wage data provided by American Samoa tuna canning employers in response to a January 2016 GAO 

questionnaire. | GAO-17-83

Note: To estimate the annual cost of future minimum wage increases, we first calculated the 

difference between the hourly wage for each worker in January 2016 (reflecting the tuna canning 

industry minimum wage of $5.16) and all scheduled minimum wage increases through 2033. We 

multiplied that value by 2,080 (annual hours worked per full-time worker) to obtain the estimated 

annual cost for each worker. Finally, we computed the average of those costs for all workers, 

including those not affected by the minimum wage increases. For workers whose wages in January 

2016 exceeded the scheduled minimum wage, we assumed that the cost of the minimum wage 

increase would be zero because the increase would not affect their pay. The average wage of 

canning industry workers in January 2016 was $5.37. Our analysis excluded nonwage labor costs 

due to the minimum wage increases, such as increases in employer payroll tax contributions under 

the Federal Insurance Contributions Act.

In the spring of 2016, representatives from the two tuna canneries in 

American Samoa expressed concerns about challenges related to the 

scheduled minimum wage increases, decreased access to fishing 

grounds in the Pacific, and potential erosion of the territory’s preferential 

trade status. In the fall of 2016, each of the canneries announced plans to 

suspend canning operations, one for an indefinite period and the other 

temporarily, in response to these challenges.

• According to Tri Marine representatives, every $0.10 increase in the 

minimum wage will result in about $150,000 to $200,000 in additional 

annual costs. In June 2011, we found that the three minimum wage 

increases since 2007 had increased labor costs for tuna canning in 

American Samoa relative to other locations,56 such as Thailand, 

where the minimum wage is currently $1.07 an hour.57 StarKist 

 56GAO-11-427. 

57According to the Notification of the Wage Committee on Minimum Wage Rate (No.7) 

issued by the government of Thailand, the current minimum wage rate in Thailand, 

excluding any limited exceptions, is 300 bhat per day. As of September 16, 2016, the 

exchange rate was 34.92 bhat to 1 U.S. dollar, according to the U.S. Federal Reserve. 

Therefore, the current hourly minimum wage for an 8-hour workday in Thailand is 

approximately $1.07.

Canneries Cite Challenges 

Including Rising Labor Costs, 

Decreased Fisheries Access, 

and Erosion of Preferential 

Trade Status and Plan to 

Reduce Operations
Page 32 GAO-17-83 American Samoa

representatives told us that they had begun to explore using other 

manufacturing locations to lower labor costs, including shifting some 

production to an affiliate plant in Senegal. They also reported 

exploring options for moving fish-cleaning processes to a foreign 

country and establishing packaging facilities in the mainland United 

States, similar to the approach used by competitors. (App. VIII 

provides illustrative information on four alternative scenarios for 

cannery operations currently located in American Samoa.)

• StarKist and Tri Marine representatives cited access to fisheries as a 

benefit of operating in American Samoa, but both companies have 

raised concerns with the U.S. government regarding the impact of 

regulation of Pacific tuna fisheries on the companies’ access to fishing 

grounds. In 2014, the National Oceanic and Atmospheric 

Administration (NOAA) issued a rule reducing the number of fishing 

days for the U.S. purse seine58 tuna fleet in the U.S. exclusive 

economic zone and the high seas to comply with a Western and 

Central Pacific Fisheries Commission’s Conservation and 

Management Measure.

59 Under the most recent South Pacific Tuna 

Treaty, the U.S. fleet retained access to fishing grounds in the 

Western and Central Pacific region,60 although the Pacific island 

nation of Kiribati limited the U.S. fleet’s fishing in its waters to 300 

days, according to Tri Marine. Tri Marine indicated that these two 

factors—NOAA’s rule reducing fishing days and the limited access to 

 58A purse seine is a large wall of netting deployed around an entire area or school of fish.

59The Western and Central Pacific Fisheries Commission was established by the 

Convention for the Conservation and Management of Highly Migratory Fish Stocks in the 

Western and Central Pacific Ocean, which entered into force on June 19, 2004, according 

to the commission’s website. The convention seeks to address problems in the 

management of high seas fisheries resulting from unregulated fishing, overcapitalization, 

excessive fleet capacity, vessel reflagging to escape controls, insufficiently selective gear, 

unreliable databases, and insufficient multilateral cooperation in respect to conservation 

and management of highly migratory fish stocks, according to the commission. The 

commission’s Conservation and Management Measures describe binding decisions 

relating to conservation and management measures addressed to members of the 

commission and to cooperating nonmembers.

60The South Pacific Tuna Treaty is a treaty on fisheries between the governments of 

certain Pacific island states and the U.S. government to set operational terms and 

conditions for the U.S. tuna purse seine fleet to fish in the Western and Central Pacific 

Ocean, including in waters under the jurisdiction of the Pacific island parties to the treaty, 

according to the U.S. Department of State. Parties to the treaty include Australia, the Cook 

Islands, the Federated States of Micronesia, Fiji, Kiribati, the Marshall Islands, Nauru, 

New Zealand, Niue, Palau, Papua New Guinea, Samoa, the Solomon Islands, Tonga, 

Tuvalu, the United States, and Vanuatu, according to NOAA.
Page 33 GAO-17-83 American Samoa

Kiribati fishing grounds—dramatically reduced access to fishing 

grounds for U.S. purse seine boats operating out of American Samoa. 

In April 2015, American Samoa’s Fisheries Task Force61 requested 

that NOAA recognize the Small Island Developing State62 status of 

American Samoa and grant the territory relief from the limit on U.S. 

purse seine tuna fishing. A month later, Tri Marine requested that 

NOAA issue an exemption to the high-seas fishing limit for any U.S.-

flag purse seine vessel that delivers at least 50 percent of its catch to 

tuna processing facilities in American Samoa. In 2016, NOAA 

released an interim rule that again combined in-zone and high-seas 

fishing efforts, enabling the U.S. fleet to shift fishing efforts that had 

previously been allocated only to in-zone areas into the high seas. 

Previously, in-zone and high-seas fishing limits had been set 

separately.63

• StarKist and Tri Marine representatives also cited tariff-free access to 

the U.S. market as an advantage of operating in American Samoa but 

expressed concern that changes in the trade status of other tunaexporting countries may erode American Samoa’s preferential trade 

status. For example, they cited the possibility that the proposed 

Trans-Pacific Partnership, which includes one tuna-producing country, 

Vietnam, would result in additional competition to the American 

 61The American Samoa Fisheries Task Force was established by the Governor of 

American Samoa to ensure sustainability of the local canneries.

62Small Island Developing States were recognized as a distinct group of developing 

countries facing specific social, economic, and environmental vulnerabilities at the United 

Nations Conference on Environment and Development, also known as the Earth Summit, 

held in Rio de Janeiro, Brazil, in June 1992. Since then, the United Nations has been 

assisting and extending cooperation to these countries in their sustainable development 

efforts.

63Federal Register, “International Fisheries; Western and Central Pacific Fisheries for 

Highly Migratory Species; Fishing Effort Limits in Purse Seine Fisheries for 2016,” NOAANMFS-2016-0038-0001, Interim Rule, effective on May 25, 2016.
Page 34 GAO-17-83 American Samoa

Samoa tuna industry if Vietnam is granted tariff-free access to the 

U.S. market.64

Both canneries announced plans to suspend canning operations in 

American Samoa in response to such challenges. In September 2016, 

StarKist announced that it would close its American Samoa plant for one 

week (October 10-17, 2016)—its second short-term closure this year—

owing to fish-supply shortages associated with fisheries regulations and 

limited freezer capacity. While this short-term closure was in effect, Tri 

Marine announced that it would indefinitely suspend canning operations 

at its American Samoa facility on December 11, 2016, stating that the 

challenging economics of canning tuna in American Samoa, combined 

with external factors, made operating its plant in the territory economically 

unsustainable. Tri Marine indicated that it plans to continue using this 

facility as a logistics hub but noted that the suspension of canning 

operations will mean a much reduced labor force.65

The American Samoa government, the territory’s largest employer, 

continues to report concerns about the economic impact of the scheduled 

minimum wage increases. In commenting on our 2014 report on the 

American Samoa minimum wage, the government noted that the 

territory’s economic base is narrow and fragile, supported primarily by the 

American Samoa government and the tuna industry, which is subject to 

global market forces outside the government’s control. The government

also stated that tethering American Samoa’s minimum wage to the 

federal minimum wage is misguided because median income and per 

capita GDP are significantly lower in the territory than in the 50 U.S. 

states. In 2014, the governor’s office urged against future minimum wage 

increases, calling the scheduled 2015 increase a “prescription for total 

 64The Trans-Pacific Partnership is a proposed free trade agreement that aims to liberalize 

trade in goods and services and remove barriers to foreign investment among Australia, 

Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, 

Vietnam, and the United States, according to the U.S. Trade Representative. The 

agreement, in its current form, would reduce U.S. tariffs on tuna in airtight containers from 

Vietnam to zero over a 4-year period. While the participating countries have signed the 

agreement, it has not yet been ratified. U.S. ratification requires congressional approval. 

According to the U.S. Trade Representative, free trade agreement negotiations with 

Thailand, the largest Asian tuna producer, were suspended in 2006, and negotiations 

aimed at arriving at a free trade agreement with Ecuador, the largest tuna producer in the 

Americas, have also been suspended.

65In announcing these plans, Tri Marine added that it was evaluating alternatives for its 

American Samoa facilities, including outright sale.

American Samoa 

Government Sees 

Minimum Wage Increases 

Conflicting with 

Sustainable Economic 

Development
Page 35 GAO-17-83 American Samoa

economic ruin.” American Samoa government officials subsequently 

commented that the reduction in currently scheduled minimum wage 

increases from $0.50 to $0.40 was helpful but that a more meaningful 

solution based on local conditions is needed. The government’s economic 

plan for fiscal years 2014 to 2017 states that the application of the federal 

minimum wage in the territory is inappropriate and counterproductive to 

sustainable economic development.66

In August 2015, the American Samoa Department of Commerce 

completed a living-wage study identifying $5.67 as the minimum wage 

needed for a family of six to afford to live in the territory.67 Workers in 

some industries in American Samoa currently earn minimum wages that 

exceed this level. However, the proposed living wage of $5.67 exceeds 

the hourly minimum wage for cannery workers by $0.51. In February 

2016, the American Samoa government announced that the local 

minimum wage for government workers would rise to $5.00, which is 

$0.19 higher than the current federally determined minimum wage ($4.81) 

for workers in this sector.

In light of the challenges affecting the tuna industry in American Samoa, 

the local government is seeking to diversify the economy. According to 

American Samoa government officials, construction of a multiline food 

processing plant to produce seafood-based and juice products is 

scheduled to begin by the end of the year. The government has also been 

involved in efforts to attract a call center to the territory. Current territorial 

plans propose the following ideas for economic diversification:

• American Samoa’s economic development plan for fiscal years 2014 

to 2017 outlines economic development goals for sectors such as 

transportation and tourism as well as action items to achieve these 

goals.68 For example, the plan outlines the tourism-related goal of 

 66Territorial Economic Development Implementation Plan Task Force, American Samoa

Economic Development Implementation Plan, FY 2014-2017 (November 2014). The plan 

was prepared by a 16-member task force representing stakeholders in the public and 

private sectors with the support of a technical assistance grant awarded to the American 

Samoa government by the U.S. Department of the Interior, according to a report by the 

task force.

67American Samoa Department of Commerce, “Proposed Minimum Living Wage for 

American Samoa” (Pago Pago: August 2015). The study identified $5.01 as the living 

wage after taxes.

68Territorial Economic Development Implementation Plan Task Force, American Samoa 

Economic Development Implementation Plan, FY 2014-2017. 
Page 36 GAO-17-83 American Samoa

increasing the number of passenger air carriers to American Samoa. 

According to the development plan, the government hopes to achieve 

this by addressing federal restrictions on competition in passenger air 

carrier service to American Samoa with the aim of attracting lowercost carriers and more visitors. However, the government recognizes 

constraints to attracting new business, including the cost of labor.

• American Samoa’s 2016 Workforce Innovation and Opportunity Act 

Unified Plan targets the development of five industries: fisheries and 

agriculture, telecommunication and information technology, 

manufacturing, visitors, and handicrafts.69 The plan notes that 

American Samoa is experiencing emigration of workers to the United 

States, countered in part by immigration of tuna cannery and fishery 

workers from neighboring islands to American Samoa. The plan cites 

low wages as a reason that highly skilled members of the labor force 

leave the territory.

There are two basic approaches for increasing American Samoa’s 

minimum wages70 to (1) keep pace with the cost of living in the territory; 

and (2) eventually equal the federal minimum wage—the criteria included 

in the statutory provision for GAO to report on this issue.71 The first 

approach relies on adjustments indexed to changes in the cost of living, 

and the second relies on a schedule of adjustments within a specified 

timeframe. In addition, aspects of each approach may be combined with 

respect to the amount and timing of future increases to minimum wages. 

Other factors would also warrant consideration, including design options 

to safeguard against any negative effects that increasing minimum wages 

might have on American Samoa’s economy.

 69American Samoa Workforce Investment Board, Territory of American Samoa Workforce 

Innovation and Opportunity Act Unified Plan, July 1, 2016 through June 20, 2020. The 

plan was approved for public comment on March 18, 2016.

70American Samoa currently applies different minimum wage rates across 18 industrial 

employment sectors. 

71Pub. L. No. 114-61 § 1(b) (Oct. 7, 2015) (29 U.S.C. § 206 note).

Alternatives for 

Increasing American 

Samoa Minimum 

Wages to Keep Pace 

with the Cost of Living 

and Eventually Equal 

the Federal Minimum 

Wage
Page 37 GAO-17-83 American Samoa

The first approach—adjusting American Samoa’s minimum wages on the 

basis of changes in a cost-of-living index—addresses the first criterion 

included in the provision for GAO to report on this issue. As of September 

2016, 17 U.S. states and the District of Columbia indexed, or planned to 

index, their minimum wages using cost-of-living measures.72 For 

example, Colorado annually adjusts its minimum wage on the basis of 

changes in consumer prices in the state. In most years since 2008, 

Colorado’s minimum wage has increased, except in 2010 when it 

dropped by 4 cents in response to deflation.

If an indexing approach were used to increase American Samoa’s 

minimum wages, the primary consideration would be the selection of an 

economic index that best reflects changes in American Samoa’s cost of 

living. The following is a list of several indices, any of which could be 

considered for this purpose.

• BLS CPI, U.S. city average. The BLS generates this CPI each month 

on the basis of surveys of retail establishments for a sample of goods 

and services purchased for consumption. Categories include food and 

beverages, housing, and medical care, among others.73 Currently, the 

BLS does not collect CPI statistics from any U.S. territory. Versions of 

the national CPI measure include the CPI for All Urban Consumers 

(CPI-U) and the CPI for Urban Wage Earners and Clerical Workers 

(CPI-W). According to BLS officials, the two CPI measures offer 

different advantages; the CPI-U is a broader measure, while the CPIW focuses on the spending patterns of wage earners, which may be 

 72See app. IV for additional information regarding state minimum wage laws. 

73According to the BLS, although the CPI is often referred to as a cost-of-living index, it 

does not reflect all “costs” of living, only consumer expenditures for goods and services. 

For example, the CPI does not include government expenditures for public health, safety, 

or education programs designed to promote consumers’ well-being. The BLS noted that it 

is difficult to incorporate expenditures for these types of programs into a cost-of-living 

measure. See http://www.bls.gov/cpi/cpifaq.htm.

Indexing American Samoa 

Minimum Wages to 

Changes in the Cost of 

Living
Page 38 GAO-17-83 American Samoa

more applicable to those earning the minimum wage.74 Of those U.S. 

states with laws that include provisions to index their minimum wage 

to a cost-of-living indicator, six use the U.S. city average CPI-U, and 

six use the CPI-W.

• BLS Hawaii (Honolulu) CPI. In addition to publishing the U.S. city 

average CPI, the BLS also publishes CPIs for four regions and 26 

metropolitan areas. Currently, two U.S. states and the District of 

Columbia index, or plan to index, their minimum wage to the CPI-U for 

either a region or metropolitan area.75 According to BLS officials, none 

of the metropolitan or regional CPIs is ideally applicable to American 

Samoa, because the territory is an isolated market where 

transportation of commodities is relatively more expensive. The 

officials suggested that, of these types of CPI measures, the CPI for 

Honolulu, Hawaii, based on the cost of living for the Honolulu urban 

area, might be best suited as an index for American Samoa, because 

Hawaii is also geographically isolated in the Pacific.

• BEA U.S. personal consumption expenditures (PCE) price index.

The U.S. Department of Commerce's BEA calculates the U.S. PCE 

price index using retail price data that it collects monthly through 

business surveys. However, the U.S. PCE includes different goods in 

its calculation than the CPI. For example, it includes expenditures 

made on behalf of consumers, in addition to consumers' own 

expenditures, such as additional costs for medical care beyond what 

consumers pay out of pocket. One U.S. state uses the U.S. PCE to 

index its minimum wage.

• BEA American Samoa PCE price index. BEA also generates an 

American Samoa PCE price index primarily using price data on 

 74Both the CPI-U and the CPI-W reflect only the buying habits of urban consumers. The 

CPI-U—the more comprehensive of the two indices—is based on expenditures by all 

urban consumers, including professionals, the self-employed, the unemployed, and retired 

individuals; it represents about 89 percent of the total U.S. population. The CPI-W 

represents a subset of the CPI-U population and is based on expenditures by urban 

households that derive more than half of their income from clerical or hourly wage 

occupations; it represents about 28 percent of the total U.S. population. In addition to 

representing different populations, the two indices also differ by the expenditure weights 

assigned to item categories and geographical areas. Further, while each index is 

generated on the basis of all consumer goods and services, each is also generated on the 

basis of certain subgroups. For example, BLS produces CPI-U and CPI-W indices for 

food, transportation, and all commodities less food and energy (sometimes referred to as 

the core index), among others.

75One other U.S. state uses the BLS CPI-U for a specific state, and another uses a State 

Commissioner to index its minimum wage. 
Page 39 GAO-17-83 American Samoa

household purchases of goods and services collected from the 

American Samoa government. When local price data are not 

available, BEA sometimes substitutes price data from the U.S. states. 

BEA publishes the most recent and historical price indexes as part of 

its periodic reports on American Samoa GDP. Its August 2016 report 

presented American Samoa PCE price indexes for years 2007 to 

2015.76

• American Samoa CPI. The American Samoa government has 

developed a CPI as a measure of changes in the territory’s cost of 

living. According to the government, it generates its index on a 

quarterly basis using price data for commodities, such as food, 

housing, clothing, and medical care collected in the territory. The 

government notes that collecting data for its CPI can be challenging 

because of the inconsistent flow of consumer goods to the islands.77

Increases in the cost of living recorded by these indices have varied over 

time and at different rates. Table 4 shows the average annual percentage 

increase and the range of annual increases for each index from 2006 to 

2015.78 The increases shown by the indices for Honolulu and American 

Samoa suggest greater annual growth in the cost of living in those 

locations, on average, than is shown by the U.S. national indices. In 

addition, the increases shown by the American Samoa index have varied 

more than those shown by the U.S. national indices, with a range of about 

11 percentage points (-0.9 percent to 9.8 percent) for the American 

 76See Bureau of Economic Analysis, “News Release: Gross Domestic Product for 

American Samoa Increases for the Second Year in a Row,” Table 1.5, BEA16-43 (Aug. 8, 

2016), accessed Nov. 22, 2016, http://www.bea.gov/newsreleases/.

77According to the American Samoa government, its CPI is currently calculated with a 

modified Laspeyres formula and is based on prices for 210 items selected with a statistical 

technique known as Probability Proportional to Size. This ensures that the most important 

items, in terms of monthly average household expenditures, are included in the CPI. This 

is the same methodology that BLS used until making revisions to the methodology in 

1978. According to BLS officials, in 1978, BLS moved to probabilistic sampling for both 

items and stores, with the universe of eligible consumer goods and services stratified into 

elementary groups. A representative sample of unique goods and services and stores is 

selected and priced within each of these elementary groups. The set of elementary groups 

was revised in 1987 and again in 1998. The next BLS revision will occur in 2018. 

78Part of the difference between the rate of inflation measured by the American Samoa 

CPI and the rates measured by the BLS CPI indices may reflect not only differences in the 

growth of prices of goods but also differences in the type or proportion of goods that are 

purchased by households. For example, food accounts for approximately 14 percent of 

the CPI-U in the United States but about 25 percent of the American Samoa CPI. 
Page 40 GAO-17-83 American Samoa

Samoa CPI compared with, for example, about 5 percentage points (-0.5 

percent to 4.4 percent) for the U.S. national CPI-U.

Table 4: Average Annual Percentage Increase and Range of Annual Increases for 

Various Cost-of-Living Indices, 2006-2015

Cost-of-living index

Average annual 

percentage increase

Range of annual

percentage increases

American Samoa CPI 3.9 -0.9 to 9.8

BEA American Samoa PCE price 

index

3.6 -1.8 to 8.9

BLS Hawaii (Honolulu) CPI 2.8 0.5 to 5.9

BLS U.S. City Average CPI-U 2.0 -0.4 to 3.8

BLS U.S. City Average CPI-W 1.9 1.3 to 2.4

BEA U.S. PCE price index 1.7 -0.1 to 3.1

Legend: BEA = Bureau of Economic Analysis, BLS = Bureau of Labor Statistics, CPI = consumer 

price index, CPI-U = CPI for All Urban Consumers, CPI-W = CPI for Urban Wage Earners and 

Clerical Workers, PCE = personal consumption expenditures.

Source: GAO analysis of data from the U.S. Department of Labor, the U.S. Department of Commerce, and the American Samoa 

government. | GAO-17-83

While adjusting American Samoa’s minimum wages on the basis of a 

cost-of-living index would ensure that they keep pace with measured 

changes in the cost of living, uncertainty would remain regarding when 

American Samoa minimum wages would reach the current federal 

minimum wage. The date of convergence with the federal minimum wage 

would depend on the rate of future changes in the cost of living. Figure 10 

shows the number of years it would take for American Samoa’s minimum 

wages to converge with the current federal minimum wage based on the 

historical average annual increases for various cost-of-living indices (for 

additional projections, see app. IX, table 10). For comparison, figure 10 

also shows the timeframe for convergence under the current schedule.
Page 41 GAO-17-83 American Samoa

Figure 10: Projected Number of Years until American Samoa’s Highest and Lowest 

Minimum Wages Equal the Current Federal Minimum Wage under the Current 

Schedule and Given Historical Trends for Various Cost-of-Living Indices

Note: The number of years until American Samoa minimum wages converge with the federal 

minimum wage reflects the number of years after the year of the first increase. As of September 30, 

2015, the highest minimum wage was $5.99, for the stevedoring (dockworker) sector. As of 

September 30, 2015, the lowest minimum wage was $4.58, for the garment manufacturing sector. For 

comparison, as of the same date, the minimum wage for two important employment sectors, 

government and fish canning and processing, was $4.81 and $5.16, respectively.

a

When applied to the 2015 highest minimum wage, the current schedule of $0.40 increases every 3 

years equates to a 1.8 percent average annual increase until the wages converge. When applied to 

the 2015 lowest minimum wage, it equates to a 2.3 percent average annual increase until the wages 

converge.
Page 42 GAO-17-83 American Samoa

To reduce uncertainty about the time required for indexed minimum 

wages to reach the federal minimum wage, an indexing approach could 

be combined with a target timeframe and schedule for achieving this 

convergence. This could help to offset the potential scenario of extended 

periods of relatively small increases or decreases in American Samoa’s 

cost of living, which would slow or reverse progress in reaching the 

federal minimum wage. When an indexed increase was to take place, the 

new minimum wage based on indexing would be compared with the 

minimum wage that would result from following a schedule that ensures 

convergence within a specified timeframe. If the indexed minimum wage 

fell short of the schedule-based wage, it would be adjusted upward by all 

or some portion of the difference (for an example of the steps involved, 

see app. X, example 1).79 This would result in minimum wages that keep 

pace with the cost of living and would also provide assurance of 

convergence with the federal minimum wage within a targeted timeframe, 

or sooner.80

The second approach—applying scheduled increases to American 

Samoa minimum wages—would establish a timeframe for ensuring that 

American Samoa’s minimum wages eventually equal the federal 

minimum wage, thus addressing the second criterion included in the 

provision for GAO to report on this issue. The current schedule 

establishes increases of $0.40 every 3 years, with the next increase 

scheduled for September 2018.81 Under the current schedule, the 18 

minimum wage sectors will reach the current federal minimum wage 

($7.25) in 2027 through 2036, depending on the sector.

If a new schedule-based approach were selected, the primary 

considerations would be the frequency and amount of future increases. 

Increases could occur at relatively short intervals (e.g., annually) or longer 

intervals (e.g., every 5 years). Also, the scheduled increases could be set 

as a nominal amount (e.g., $0.20 each year), as a proportion of the 

 79If the indexed minimum wage equals or exceeds the schedule-based minimum wage, 

the minimum wage would be adjusted based on indexing alone. 

80Another method to offset periods of relatively small increases in American Samoa’s cost 

of living would be to apply a minimum percentage increase to minimum wages. Under this 

approach, minimum wages would rise in future years by the higher of either the 

percentage change in the cost-of-living index or the designated minimum percentage 

increase. 

81Pub. L. No. 114-61.

Scheduled Increases in 

American Samoa 

Minimum Wages
Page 43 GAO-17-83 American Samoa

prevailing federal minimum wage (e.g., 10 percent each year),82 or in any 

manner that results in convergence with the federal minimum wage in a 

specified timeframe.

Figure 11 illustrates how various rates of increase under a scheduled 

approach would affect the timing of American Samoa minimum wages’ 

convergence with the current federal minimum wage. To enable 

comparison with an indexing approach, figure 11 shows the calculated 

average annual rates of increase associated with past and current 

schedules established by law. As shown, the frequency and amount of 

scheduled increases directly affect the timing of convergence (for 

additional computations of convergence based on other schedules, see 

app. IX, table 11).

Figure 11: Projected Number of Years until American Samoa’s Highest and Lowest 

Minimum Wages Equal the Current Federal Minimum Wage, Given Past and Current 

Schedules of Increases

Note: The number of years until convergence with the federal minimum wage reflects the number of 

years after the year of the first increase. As of September 30, 2015, the highest minimum wage was 

$5.99, for the stevedoring (dockworker) sector. As of September 30, 2015, the lowest minimum wage 

was $4.58, for the garment manufacturing sector. For comparison, as of the same date, the minimum 

 82While a proportional increase would result in equal increases each year, the increases 

would automatically become greater if the federal minimum wage were to increase in the 

future. 
Page 44 GAO-17-83 American Samoa

wage for two important employment sectors, government and tuna canning, was $4.81 and $5.16, 

respectively.

a

The percentages shown represent the computed average annual increase for each schedule based 

on whether the schedule is applied to the highest or lowest 2015 minimum wage. The average annual 

increases for all other industry sectors would fall within the two percentages displayed for each 

schedule. The computed percentage increases are for the period from the schedule’s first year of 

increase to the projected year of convergence. The actual percentage rate of increase will decline as 

the minimum wage rises over time. Initially it will be greater than the computed average annual 

percentage increase and then become less in later years.

b

The current schedule under law dictates that the next increase will occur in 2018. From that year, it 

will take 9 years, or until 2027, for the highest minimum wage to equal the federal minimum wage. It 

will take 18 years, or until 2036, for the lowest minimum wage to equal the federal minimum wage.

While a schedule-based approach would ensure that American Samoa 

minimum wages will reach the federal minimum wage within a given 

period of time, it would not guarantee that minimum wages will keep pace 

with the territory’s cost of living. For example, under the current schedule, 

wages for the tuna cannery employment sector will rise, on average, by 

approximately 2 percent annually from 2017 to 2033, when they will 

converge with the federal minimum wage. By contrast, the index 

developed by the American Samoa government indicates that the 

territory’s cost of living rose, on average, by just under 4 percent annually 

from 2006 to 2015.

If scheduled minimum wage increases were determined to be lagging 

behind increases in the cost of living, such as during a period of relatively 

high inflation, they could be adjusted upward. This would require (1) 

monitoring a cost-of-living index over time and (2) comparing scheduledbased and indexed minimum wages at the time of each scheduled 

increase. If the schedule-based minimum wage were less than the 

corresponding indexed minimum wage, it could be increased by all or a 

portion of the difference between them. Combining a schedule, as the 

primary driver of future minimum wage increases, with changes in the 

cost of living, as a secondary mechanism, would ensure that American 

Samoa minimum wages reach the federal minimum wage within a 

targeted timeframe and also keep pace with the cost of living (for an 

example of the steps involved, see app. X, example 2). However, such a 

step could also result in convergence with the federal minimum wage 

earlier than scheduled. After each adjustment to a scheduled increase, a 

decision would be made whether to maintain the schedule’s frequency 

and amount of future increases from that point forward or to reduce or 

time them differently to accommodate the schedule’s original timeframe 

for convergence.
Page 45 GAO-17-83 American Samoa

A number of factors could be taken into account in deciding which 

adjustment mechanism to use for increasing American Samoa’s minimum 

wage.

• Increases in the federal minimum wage. Future increases in the 

federal minimum wage would lengthen the timeframe for American 

Samoa’s minimum wages to reach the federal minimum wage. Under 

an indexed approach, if the federal minimum wage increased by 

$1.00 (to $8.25) before all of the American Samoa minimum wages 

converge with the federal minimum wage, and if the American Samoa 

cost of living subsequently rose by 2 percent annually after that point, 

the wages would converge 6 years later than if the federal minimum 

wage had not increased. The effect would be similar under a 

schedule-based approach, and the additional time before the wages 

converged would depend on the general rate of increase dictated by 

the schedule.

• Increases after convergence occurs. Under current law, once all of 

the minimum wage rates for each industry and classification in 

American Samoa converge with the federal minimum wage, the 

adjustment mechanism governing increases to them would end. 

However, during the period when some American Samoa minimum 

wages begin reaching the federal minimum wage and others have yet 

to do so, those that equal the federal minimum wage will remain at 

that level while the remaining wages will increase until the wages for 

all industries and classifications reach parity with the federal minimum 

wage.83 If, during this period, the federal minimum wage increases, all 

American Samoa minimum wages would once again be adjusted by 

the established adjustment mechanism until they reach the federal 

minimum wage. Once all American Samoa minimum wages reach the 

federal minimum wage, the transition and adjustment period would 

end, and the minimum wage rate in American Samoa would be the 

federal minimum wage under the FLSA and subject to changes to the 

federal minimum wage if or when they occur.

• Administration. The need for administrative resources to apply and 

oversee changes in American Samoa’s minimum wage could largely 

depend on the complexity of the adjustment mechanism selected. 

Because future minimum wage increases under either an indexed or a 

 83Under current law, at no point will any of American Samoa’s federally determined 

minimum wages increase to a rate higher than the federal minimum wage. 29 U.S.C. §

206 note, Applicability of minimum wage to American Samoa and the Commonwealth of 

the Northern Mariana Islands.

Factors to Take into 

Account When Assessing 

Approaches for Increasing 

American Samoa’s 

Minimum Wages
Page 46 GAO-17-83 American Samoa

schedule-based approach would be automatic, either approach could 

potentially require minimal administrative activity. However, an 

indexed approach would likely require somewhat more ongoing 

administrative activity because of the need to monitor the cost-ofliving index. Additional resources would also likely be needed if 

components of the two general approaches were combined, which 

could involve calculations to determine to what extent increases 

should be adjusted upward. Selection of the most appropriate 

administrator, whether in the federal government, the American 

Samoa government, or another entity, also warrants consideration.

• Volatility.84 Indexing American Samoa minimum wages to a cost-ofliving indicator could result in fluctuations in the amount of increases 

applied to minimum wages. For example, during the past decade, 

annual changes in the cost of living as measured by the American 

Samoa CPI ranged from approximately -1 percent to nearly 10 

percent. In comparison, the BLS CPI-U ranged from approximately -

.05 percent to around 4 percent during the same period. Scheduled 

increases could be designed to limit minimum wage volatility, although 

such volatility might result from adjusting scheduled increases upward 

to ensure they keep pace with the cost of living.

• Predictability. The difficulty of predicting increases in the American 

Samoa cost of living would make it difficult to anticipate the amount of 

future increases under an indexed approach. This lack of predictability 

could inhibit employers’ ability to make sound business decisions, 

workers’ ability to make employment and personal finance decisions, 

and the government’s ability to anticipate accurate tax revenues and 

develop budget and economic plans. Alternatively, a scheduled-based 

approach would establish a series of future increases of known 

amount and frequency. However, because the increases would not be 

linked to economic conditions, such as the cost of living, they might 

not be appropriate at the scheduled time.

Given the concerns that American Samoa government officials and others 

have raised about the possible loss of jobs if the territory’s minimum 

wages are increased, other design elements, or safeguards, could be 

added to any of the approaches described above to reduce such risks. 

For example, some U.S. states’ and localities’ minimum wage laws 

include provisions that are generally designed to mitigate negative 

 84For the purposes of this report, “volatility” is defined as the extent to which changes to 

the minimum wage deviate from being uniform over time. 

Safeguards Could Be 

Used to Mitigate Potential 

Negative Economic Effects
Page 47 GAO-17-83 American Samoa

economic effects, often by reducing or temporarily suspending periodic 

increases. However, while reducing or suspending increases could 

counteract possible negative effects, it could slow American Samoa 

minimum wages’ progress in meeting the objectives of keeping pace with 

the cost of living and equaling the federal minimum wage.

The following are examples of such safeguards.

• Regulate adjustments. Whether based on an index, a schedule, or 

some combination of the two, increases to minimum wages could be 

reduced or suspended on the basis of one or more economic 

indicators that reflect the general health of the American Samoa 

economy or critical sectors. These indicators could include wage 

rates, unemployment rates, the poverty level, productivity, or other 

economic measures. For example, the minimum wage laws for the 

state of Michigan and for the city of Chicago, Illinois, include a 

provision to suspend future minimum wage increases if the 

unemployment rate for the previous year has reached or exceed a 

certain percentage. The state of California uses certain employment 

rates and retail sales levels as indicators for the same purpose.

• Set adjustment maximums. Minimum wage increases based on the 

cost of living could be capped. For example, minimum wage laws for 

the states of Minnesota, Nevada, and Vermont, among others, include 

provisions to index their minimum wages to changes in the cost of 

living, but the laws also limit increases to no greater than a specific 

percentage in any given year.

• Limit coverage. As allowed under the FLSA, certain occupations 

could be exempted from the federal minimum wage. For example, in 

the United States, certain farmworkers can be paid less than the 

minimum wage. Provisions could be added to the legislation 

governing American Samoa minimum wages to expand the number of 

exempted occupations.

• Vary increases. In the past, SIC procedures varied the amount of 

minimum wage increases for specific American Samoa industries in 

any given year. As with coverage, legislative provisions could 

mandate that the amounts of increases differ depending on the 

industry, region, or other attribute.

The safeguard that involves regulating minimum wage increases on the 

basis of one or more economic indicators could entail certain challenges 

that might inhibit its use in American Samoa. First, the data needed to 

monitor such indicators may not be readily available. For example, the 

federal government does not collect certain labor market information for 
Page 48 GAO-17-83 American Samoa

American Samoa, which impedes measurement of unemployment levels 

in the territory.85 In addition, collecting and monitoring economic data 

would require considerable administrative activity, and an administrator 

might be needed to determine when the safeguard should be triggered. 

For example, in California the Governor is authorized to use his or her 

discretion to temporarily suspend that state’s minimum wage increases if 

certain economic conditions are met. Finally, the time lag inherent to 

economic indicators may reduce their effectiveness as a basis for 

triggering a safeguard. For example, given American Samoa’s island 

economy and dependence on the dominant private sector tuna canning 

industry, the sudden exit of a cannery owing in part to an increase in 

minimum wages would occur before the cannery’s exit affected 

unemployment levels and before a safeguard could be triggered.

Four external reviewers of our report, with expertise encompassing labor 

economics, Pacific island economies, and fisheries, provided their 

perspectives on increasing minimum wages in American Samoa.86 The 

following summarizes their views.

• Potential consequences of increasing minimum wages in 

American Samoa. Three reviewers expressed concern that 

increasing minimum wages in American Samoa may result in negative 

economic effects, given American Samoa’s current economic 

conditions. One reviewer suggested that further study of minimum 

wage increases’ possible effects on American Samoa workers and 

industries—including a study to identify industries that might tolerate 

larger increases without adverse effects—is warranted.

• Applicability of the federal minimum wage level to American 

Samoa. Three reviewers noted that raising American Samoa 

 85For additional discussion on the challenges associated with collecting current 

population, economy, and labor force data in U.S. territories, see House Committee on 

Oversight and Government Reform, Subcommittee on Information Policy, Census, and 

National Archives, and House Committee on Natural Resources, Subcommittee on Insular 

Affairs, Census Data: Special Issues Related to U.S. Territories, 110th Congress, 2nd

session, May 21, 2008.

86The following external reviewers submitted comments: Randall Akee, Ph.D., Assistant 

Professor of Public Policy at the University of California, Los Angeles; Gerard A. Finin, 

PhD, Director, Pacific Islands Development Program, East-West Center, Honolulu, 

Hawaii; Elizabeth Havice, PhD, Associate Professor at the University of North Carolina, 

Chapel Hill, Department of Geography; and Gerald Mayer, former federal labor policy 

analyst.

External Reviewers’ Views 

on Increasing the 

Minimum Wage in 

American Samoa
Page 49 GAO-17-83 American Samoa

minimum wages to equal the federal minimum wage might not be 

appropriate for the territory given the differences between its economy 

and that of the 50 U.S. states. One reviewer remarked that raising 

minimum wages to the federal level could be viewed as somewhat 

artificial in light of the territory’s economic conditions.

• Suitability and feasibility of linking minimum wages to American 

Samoa’s cost of living. One reviewer suggested that in small 

economies, such as American Samoa’s, increasing the minimum 

wage may in turn lead to increases in the cost of living. Another 

pointed out that indexing to the cost of living may not be feasible in 

American Samoa. Given that a cost-of-living index is typically based 

on household expenses, one reviewer pointed out that the standard 

definition of “household” used in the United States may not apply in 

American Samoa given the territory’s cultural ethos of sharing with 

extended family and fellow villagers.

• Setting minimum wages in American Samoa commensurate with, 

not equal to, the federal minimum wage. One reviewer suggested 

setting a minimum wage in American Samoa that is proportionate 

rather than equal to the federal minimum wage. For example, if a fulltime minimum wage worker in the United States earns, on average, 

35 percent of the U.S. median household income, the American 

Samoa minimum wage would be set at 35 percent of the median 

household income in American Samoa. The reviewer observed that 

this approach would link minimum wage increases in American 

Samoa to improvements in the territory’s median household income, 

relative to the U.S. median household income, thus reducing the

potential for adverse economic effects.

We provided a draft of this report to the U.S. Departments of Commerce, 

the Interior, Labor, and State as well as the American Samoa 

government. We received written comments from Interior, DOL, and the 

American Samoa government, which are reprinted in appendixes XI, XII, 

and XIII, respectively. We received technical comments from the 

Department of Commerce and DOL, which we incorporated as 

appropriate. The Department of State did not provide any comments. 

Interior stated that our report correctly depicts the economic challenges 

facing American Samoa and that it is critical to consider the territory’s 

particular circumstances, including local economic and labor market 

realities, when adopting a process for adjusting minimum wages. Interior 

suggested that an in-depth review of the approaches suggested in our 

report should be conducted by appropriate personnel from Interior, DOL, 

Agency Comments 

and Our Evaluation
Page 50 GAO-17-83 American Samoa

and the Department of Commerce, along with territory and industry 

experts, to identify a method of adjusting minimum wages in American 

Samoa that would keep pace with the cost of living and eventually 

converge with the federal minimum wage.

DOL stated that studies examining the employment impact of increases in 

the minimum wage have found a range of effects, with varying degrees of 

reliability, and that the majority of these studies have concluded that 

minimum wage increases have little to no significant effect on 

employment of low wage workers. We incorporated DOL’s comment in a 

footnote in our report that addresses these issues and reports relevant 

findings from a CBO study.

The American Samoa government expressed appreciation for our report’s 

coverage of the status of the territory’s economy and the challenges it 

faces. The government added its appreciation for Congress’s 

commitment to ensuring that the territory’s workers receive a salary that 

will allow them to address the cost of living. However, the government 

stated that setting minimum wages without consideration for the territory’s 

prevailing economic conditions would likely result in a “countervailing” 

impact. The government noted that, in light of prevailing economic 

conditions, increasing the territory’s minimum wages to the federal level 

may have negative consequences. The government recommended 

creation of a DOL-constituted committee, similar to the SICs formerly 

used to determine minimum wages in the territory, to set minimum wages 

that would be appropriate for American Samoa. The government added 

that it does not realistically foresee American Samoa minimum wages’ 

reaching the federal level without additional federal support for the 

territory. The government further commented that if an indexing approach 

were used to adjust American Samoa minimum wages, a U.S.-based CPI 

would be preferable.

We are sending copies of this report to interested congressional 

committees. We also will provide copies of this report to the U.S. 

Secretaries of Commerce, the Interior, Labor, and State and to the 

Governor of American Samoa. In addition, the report will be available at 

no charge on the GAO website at http://www.gao.gov.

If you or your staffs have questions about this report, please contact 

David Gootnick at (202) 512-3149, or gootnickd@gao.gov; Andrew 

Sherrill at (202) 512-7252, or sherrilla@gao.gov; or Oliver Richard at 

(202) 512-8424, or richardo@gao.gov. Contact points for our Offices of 
Page 51 GAO-17-83 American Samoa

Congressional Relations and Public Affairs may be found on the last page 

of this report. GAO staff who made key contributions to this report are 

listed in appendix XIV.

David Gootnick

Director, International Affairs and Trade

Andrew Sherrill

Director, Education, Workforce and Income Security

Oliver Richard

Director, Applied Research and Methods
Page 52 GAO-17-83 American Samoa

List of Committees

The Honorable Lisa Murkowski

Chairwoman

The Honorable Maria Cantwell

Ranking Member

Committee on Energy and Natural Resources

United States Senate

The Honorable Lamar Alexander

Chairman

The Honorable Patty Murray

Ranking Member

Committee on Health, Education, Labor, and Pensions

United States Senate

The Honorable Richard Shelby

Chairman

The Honorable Barbara Mikulski

Ranking Member

Subcommittee on Commerce, Justice, Science, and Related Agencies

Committee on Appropriations

United States Senate

The Honorable Lisa Murkowski

Chairwoman

The Honorable Tom Udall

Ranking Member

Subcommittee on Interior, Environment, and Related Agencies 

Committee on Appropriations

United States Senate

The Honorable Roy Blunt

Chairman

The Honorable Patty Murray

Ranking Member

Subcommittee on Labor, Health and Human Services, Education, and 

Related Agencies Committee on Appropriations

United States Senate
Page 53 GAO-17-83 American Samoa

The Honorable John Kline

Chairman

The Honorable Robert C. “Bobby” Scott

Ranking Member

Committee on Education and the Workforce

House of Representatives

The Honorable Rob Bishop

Chairman

The Honorable Raúl Grijalva

Ranking Member

Committee on Natural Resources

House of Representatives

The Honorable Don Young

Chairman

The Honorable Raul Ruiz

Ranking Member

Subcommittee on Indian, Insular, and Alaska Native Affairs 

Committee on Natural Resources

House of Representatives

The Honorable John Culberson

Chairman

The Honorable Mike Honda

Acting Ranking Member

Subcommittee on Commerce, Justice, Science, and Related Agencies

Committee on Appropriations

House of Representatives

The Honorable Ken Calvert

Chairman

The Honorable Betty McCollum

Ranking Member

Subcommittee on Interior, Environment, and Related Agencies

Committee on Appropriations

House of Representatives
Page 54 GAO-17-83 American Samoa

The Honorable Tom Cole

Chairman

The Honorable Rosa DeLauro

Ranking Member

Subcommittee on Labor, Health and Human Services, Education, and 

Related Agencies

Committee on Appropriations

House of Representatives
Appendix I: Objectives, Scope, and 

Methodology

Page 55 GAO-17-83 American Samoa

This report (1) relates the history of minimum wages in American Samoa, 

(2) examines the status of the territory’s economy, and (3) identifies 

alternative approaches that could be used to ensure that minimum wages 

in American Samoa keep pace with the cost of living in American Samoa 

and eventually equal the federal minimum wage. Our discussion of the 

American Samoa economy updates our previous reports on the impact of 

minimum wage increases in American Samoa, including changes in 

employment and earnings and changes in key industries since the most 

recent federal minimum wage increase and since the scheduled 

increases in American Samoa minimum wages began.

To relate the history of minimum wage implementation in American 

Samoa, we analyzed past and current laws governing federal minimum 

wages in the United States and its territories. We reviewed literature 

regarding the history of American Samoa and the federal minimum wage 

in the territory, including U.S. Department of Labor (DOL) and 

Congressional Research Service reports. We also reviewed DOL records 

from the special industry committees to identify all past minimum wages 

in American Samoa since the minimum wage was first enforced in the 

territory. We reviewed federal laws specifying revisions in the federal 

minimum wage to identify timeframes for the convergence of American 

Samoa minimum wages with the federal minimum wage. Finally, we 

compared past minimum wages in American Samoa with historical costof-living data—specifically, the U.S. consumer price index (CPI) and the 

American Samoa CPI measures for 1997-2016—to assess whether past 

minimum wage increases had kept pace with changes in the cost of living 

in American Samoa. 

To describe the status of the American Samoa economy, we reviewed 

relevant GAO reports1 and analyzed gross domestic product data from 

the U.S. Bureau of Economic Analysis; tuna export data from the U.S. 

Census Bureau; tax data from the American Samoa government; and 

employment, earnings, and wage data gathered through a questionnaire 

that we submitted to the two tuna canneries currently operating in 

 1

See GAO, American Samoa and Commonwealth of the Northern Mariana Islands: 

Wages, Employment, Employer Actions, Earnings, and Worker Views Since Minimum 

Wage Increases Began, GAO-10-333 (Washington, D.C.: Apr. 8, 2010); American Samoa 

and Commonwealth of the Northern Mariana Islands: Employment, Earnings, and Status 

of Key Industries Since Minimum Wage Increases Began, GAO-11-427 (Washington, 

D.C.: June 23, 2011); American Samoa and Commonwealth of the Northern Mariana 

Islands: Economic Indicators since Minimum Wage Increases Began, GAO-14-381 

(Washington, D.C.: Mar. 31, 2014).

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 56 GAO-17-83 American Samoa

American Samoa—StarKist and Tri Marine. In addition, we reviewed data 

and interviewed officials from the U.S. Departments of Commerce, the 

Interior, and Labor, and the American Samoa government. We also spoke 

with, and gathered information from, representatives of the four major 

tuna companies operating in the United States, two of which currently 

operate tuna canneries in American Samoa. In addition, we took the 

following steps:

To estimate American Samoa employment and earnings, we analyzed 

data from the American Samoa Department of Treasury’s Office of 

Taxation as well as tuna canning industry employers’ responses to our 

questionnaire. The Office of Taxation data—numbers and annual 

earnings of persons employed at any point during the tax year—came 

directly from the office’s tax system, with the exception of data for 

American Samoa government employees in 2013 and 2014, which the

office provided separately. The Office of Taxation was unable to provide 

2014 data for the American Samoa Medical Center; therefore, we used 

the values reported for 2013. In accordance with other federal 

employment surveys and with the methodology we employed in preparing 

our 2010, 2011, and 2014 reports on the impact of minimum wage 

increases in American Samoa and the Commonwealth of the Northern 

Mariana Islands (CNMI), our employer questionnaire requested wage 

data for mid-June pay periods in 2014 and 2015, with the addition of 

information on a pay period in January 2016. The questionnaire asked 

separately for data regarding workers paid an hourly wage and workers 

paid an annual salary. For hourly wage workers, respondents were asked 

to provide the number of employees paid at each wage rate. For salaried 

workers, respondents were asked the number of full-time and part-time 

workers paid at each salary level. 

Before sending our initial questionnaire on this topic in 2009, we 

pretested it over the phone with three employers in the CNMI and two in 

American Samoa to make sure that the questions were clear and 

comprehensive, the data were readily obtainable, and the questionnaire 

did not place an undue burden on employers. While we eliminated some 

questions in our current questionnaire, revisions to remaining questions 

were minor and did not require additional pretesting. 

We administered the questionnaire in February 2016. We sent the 

questionnaire to StarKist and Tri Marine, the two canneries currently 

operating in American Samoa, and received two completed 

questionnaires for a 100-percent response rate. Employers received the 

questionnaire by e-mail in an attached form that they could return 

electronically after marking checkboxes or entering responses in openanswer boxes. We contacted employers to clarify responses and request 
Appendix I: Objectives, Scope, and 

Methodology

Page 57 GAO-17-83 American Samoa

any missing data. We did not independently verify that the wage and 

other information provided to us were correct. After recording the 

questionnaire data, we verified all keypunched records by comparing 

them with the corresponding questionnaires and corrected the errors we 

found.

Data based on employers’ questionnaire responses include the reported 

numbers of hourly workers at the canneries as of June in the given year 

as well as the annual earnings of those workers. In compiling the 

questionnaire-based earnings data for a given year, we assumed that all 

hourly cannery workers earned the minimum wage for that year and 

worked all year. When the minimum wage changed midyear, we assumed 

that the original wage applied for the first half of the year and the revised 

wage for the second half of the year. To adjust earnings for inflation, we 

relied on the American Samoa CPI.

To provide information on changes in the territory’s key private sector 

industry—tuna canning—we estimated the wage rates of cannery 

workers, using tuna canning industry employers’ responses to our 

questionnaire regarding the number of workers earning each wage rate 

as of January 12, 2016. Using these data, we determined both the 

median wage rate and the number of workers that would be affected by 

future minimum wage rates because their wages were at or below future 

scheduled minimum wages. We estimated the cost of future scheduled 

minimum wages by, first, calculating the cost to the cannery of increasing 

each worker’s wages to scheduled levels and, second, averaging the 

results of this calculation for all current workers. This estimate assumed 

that workers worked full time and all year (i.e., 2,080 hours) and that the 

minimum-wage increase would not affect the wages of workers currently 

earning more than the minimum wage.

We interviewed cannery representatives to obtain their views on 

competitive challenges facing the industry, including changes in minimum 

wage rates, access to fishing grounds, and preferential trade status. To 

illustrate other potential tuna production scenarios, we developed a tuna 

model where tuna production relocates from the current status quo in 

American Samoa to one of three possible scenarios of loining or canning 

tuna, or both, in other locations. Changes in labor and tariff costs are 

compared to the status quo scenario in American Samoa. The model 

uses the tuna employment count from the questionnaire responses, 

World Bank data on minimum wage rates in other countries, and 

information obtained during interviews with tuna cannery employers. (See 

app. VIII for results of our analysis and more details about the 
Appendix I: Objectives, Scope, and 

Methodology

Page 58 GAO-17-83 American Samoa

assumptions we used.) This model is an update of the model we used for 

our June 2011 report.2

After we had completed our analyses and provided a draft of this report to 

federal agencies and the American Samoa government, Tri Marine 

announced that it would suspend its canning operations in American 

Samoa indefinitely in mid-December 2015. We revised our report to 

acknowledge this announcement, including the reduction in cannery 

employment that Tri Marine stated would result from its decision, as well 

as StarKist’s earlier announcement that it would close its American 

Samoa plant for 1 week in October 2016—the second such short-term 

closure in a year. We did not attempt to collect revised employment or 

earnings data from the canneries to reflect the suspensions’ impact. In 

addition, since fully updated information on employment and earnings for 

the canneries, and for the territory as a whole, was not available, we did 

not revise our overall analyses of employment or earnings. We also did 

not attempt to estimate the impact that these suspensions would have on 

American Samoa tuna shipments or update the model of alternate tuna 

production scenarios that appears in appendix VIII.

To identify alternative approaches for increasing minimum wages in 

American Samoa that would ensure they keep pace with the cost of living 

in the territory and eventually equal the federal minimum wage, we 

reviewed relevant literature on the federal system for setting the minimum 

wage, systems used by the U.S. states that set their own minimum 

wages, and systems used to set minimum wages in other countries. We 

identified common economic measures or indices of change in the cost of 

living that are generated by the U.S. government and one generated by 

the American Samoa government. To estimate how long it would take for 

American Samoa’s minimum wages to converge with the federal 

minimum wage if they were indexed to the cost of living, we projected 

future increases based on historical trends in DOL’s CPI for the U.S. City 

Average and Honolulu, Hawaii. We performed the same calculations 

based on historical trends in American Samoa’s CPI and in the 

Department of Commerce’s indices of personal consumption 

expenditures in the United States and in American Samoa. We also 

estimated the length of time it would take for American Samoa minimum 

wages to reach the federal minimum wage given schedules dictating 

future increases of differing amounts and frequency (see app. IX for these 

projections). In addition, we developed scenarios illustrating how indexing 

and schedule-based approaches could be combined to meet both criteria 

 2

GAO-11-427. 
Appendix I: Objectives, Scope, and 

Methodology

Page 59 GAO-17-83 American Samoa

set by Pub. L. No. 114-61 for GAO’s review (see app. X). The scope of 

our work was limited to examining approaches for increasing American 

Samoa’s minimum wages that would directly address these criteria. Our 

work did not address other programs and policies that could supplement 

the incomes of low-wage workers—for example, the Earned Income Tax 

Credit. Our work also did not address possible adjustments in U.S. trade 

or tax policies that might help offset the potential negative impacts of 

minimum wage increases on employers. 

We received comments on a draft of this report from four external 

reviewers with substantial background in relevant topics including labor 

economics, Pacific island economies, and fisheries. We also submitted to 

businesses that operate in American Samoa, for verification, technical 

material regarding cannery operations. We incorporated comments from 

the reviewers and businesses into the report as appropriate. 

We conducted this performance audit from November 2015 through 

September 2016 in accordance with generally accepted government 

auditing standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a reasonable 

basis for our findings and conclusions based on our audit objectives. We 

believe that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives.
Appendix II: Minimum Wage-Setting Systems 

around the World

Page 60 GAO-17-83 American Samoa

Governments around the world employ a wide variety of approaches to 

setting minimum wage rates. These systems vary widely, including with 

respect to the entities holding decision-making authority, the objectives 

they seek to address, any mechanisms for making regular adjustments, 

and the effective coverage and level of the minimum wages.1

Decisions on minimum wage rates may be made by governments, by 

specialized bodies, or through collective bargaining. 

• Government. Most national systems assign responsibility for setting 

minimum wage rates to the government, via legislative or executive 

action, usually with some requirement for consultation. Governments 

may be required to consult with social partners (i.e., workers and 

employers). For example, according to the International Labor 

Organization (ILO), the Bahamas assigns responsibility for setting 

minimum wages to the government, but before taking action, the 

government must consult with a representative confederation of 

employers and a representative association of registered trade 

unions. The text box describes the U.S. approach to setting the 

federal minimum wage. 

 1

Statements in this appendix are based primarily on information gathered and analyzed by 

the International Labor Organization (ILO), supplemented by material from the World Bank 

and other sources as noted. The ILO maintains a “Working Conditions Laws” database 

that catalogues information on national practices in a number of areas, including minimum 

wage setting (see http://www.ilo.org/dyn/travail/travmain.home). The ILO database 

includes information on (a) procedures (i.e., how minimum wages are set); (b) criteria (i.e., 

factors that must be taken into consideration when setting minimum wages); (c) coverage 

(i.e., categories of workers that are entitled to, or excluded from, the minimum wage as 

well as differentiation, if any, in minimums by occupation, sector, region, or category of 

worker); (d) level (i.e., the nominal value of the minimum wage); (e) frequency of 

adjustment (i.e., stipulations, if any, about the frequency of adjustments to the minimum 

wage); and (f) control mechanisms (measures for ensuring compliance). To fit the 

structure of this report, in some cases we employed different terminology than the sources 

we consulted—for example, focusing on systemic “objectives” rather than “criteria”—and 

arranged information differently—for instance, discussing differentiation among minimum 

wages for various groups of workers under “level” rather than “coverage.” For the ILO’s 

most recent report on minimum wage setting practices, see Minimum Wage Systems: 

General Survey of the Reports on the Minimum Wage Fixing Convention, 1970 (No. 131), 

and the Minimum Wage Fixing Recommendation, 1970 (No. 135), Report of the 

Committee of Experts on the Application of Conventions and Recommendations (Articles 

19, 22, and 35 of the Constitution), International Labor Conference, 103rd Session, 2014 

(Geneva: International Labor Office, 2014).

Appendix II: Minimum Wage-Setting 

Systems around the World

Decision-Making Authority
Appendix II: Minimum Wage-Setting Systems 

around the World

Page 61 GAO-17-83 American Samoa

How Does the United States Set Its Minimum Wage?

The federal minimum wage in the United States has been set through the passage of, 

and amendments to, the Fair Labor Standards Act of 1938 (FLSA). The FLSA states 

that its overall policy is to correct and, as rapidly as practicable, eliminate, in industries 

engaged in commerce or in the production of goods for commerce, labor conditions 

detrimental to the maintenance of the minimum standards of living necessary for the 

health, efficiency, and general well-being of workers without substantially curtailing 

employment or earning power. Since 1938, there have been nine amendments to the 

FLSA to establish new minimum wages, usually raising the rate through a series of 

steps over a period of 2 to 4 years. 

The federal minimum wage—currently $7.25—applies generally to any employee 

engaged in commerce and to workers employed in enterprises engaged in commerce 

or in the production of goods for commerce, with certain exemptions. However, U.S. 

states and territories, the District of Columbia, and local governments may generally 

also set their own minimum wages, and many have done so, often at rates higher than 

the federal minimum wage.a According to the Department of Labor, 3.9 percent of 

hourly workers in the United States in 2014 earned wages at or below the federal 

minimum wage. According to the Organization for Economic Co-operation and 

Development, the federal minimum wage in 2015 was equivalent to 25 percent of the 

average U.S. wage.b

Source: GAO analysis of the FLSA, state laws, and information from the Department of Labor and the Organization for Economic 

Cooperation and Development as indicated. | GAO-17-83

a

The FLSA permits adoption of minimum wages at or above the federal level but prohibits payment of 

minimum wages below the federal level for workers covered by the FLSA.

b

See Organization for Economic Co-operation and Development, “OECD Stat: Real Minimum 

Wages,” accessed October 27, 2016, https://stats.oecd.org.

• Specialized bodies. Some national systems assign responsibility for 

setting minimum wages to specialized bodies, sometimes referred to 

as wage boards or councils and usually comprising representatives of 

workers, employers, and the public interest. For example, according 

to the ILO, in Peru, minimum wage decisions are made by the 

National Council for Labor and Employment Promotion, which 

consists of government, worker, and employer representatives. 

Alternatively, governments may be required to consult with 

specialized bodies. For instance, according to the ILO, the French 

government has the power to set minimum wages by decree, but 

before doing so, it must consult with the National Collective 

Bargaining Commission, which includes representatives of the 

government, employers’ and workers’ organizations, and the Social 

Section of the Council of State. 

• Collective bargaining. A small number of national systems, primarily 

in Western Europe, set minimum wages through collective bargaining. 

Germany and Finland are examples, according to the ILO.

Figure 12 shows the distribution of minimum wage–setting procedures 

among 145 countries, as reported by the ILO.
Appendix II: Minimum Wage-Setting Systems 

around the World

Page 62 GAO-17-83 American Samoa

Figure 12: Decision-Making Authority in 145 National Systems for Setting Minimum 

Wages

Note: Specialized bodies, sometimes referred to as wage boards or councils, usually consist of 

representatives of workers, employers, and the public interest. 

A World Bank-sponsored review of minimum wage-setting practices in 

Latin American countries provides an illustration of variation among 

national systems in one region.2 The review identified 5 countries that set 

minimum wage rates by government decision, 6 that set rates by 

government decision with advice from wage boards or other 

nongovernmental groups, and 13 that rely on wage boards to set rates. 

Bolivia is an example of a country that relies on the government (in this 

case, the Ministry of Labor) to set rates; according to the ILO, Bolivian law 

does not require consultation with social partners. According to the ILO, 

El Salvador relies on a specialized body—the National Minimum Wage 

Council—to act in an advisory role, while Costa Rica relies on its National 

 2

Wendy V. Cunningham, Minimum Wages and Social Policy: Lessons from Developing 

Countries (International Bank for Reconstruction and Development/The World Bank, 

2007). 
Appendix II: Minimum Wage-Setting Systems 

around the World

Page 63 GAO-17-83 American Samoa

Wages Council to determine wage rates. Both of these bodies include 

government, worker, and employer representatives. 

National systems refer to a range of concerns and statistical markers to 

be taken into consideration when determining minimum wage rates. 

These concerns and markers generally fall into two categories: those 

pertaining to the needs of workers; and those pertaining to the needs of 

employers, the economy at large, or both. 

While some national systems do not include any specific criteria for 

determining minimum wages, most require consideration of one or more 

indicators related to worker needs and economic factors. Table 5 shows 

the various types of criteria specified by 98 national systems examined in 

one ILO-sponsored study completed in 2005. As the table shows, the 

study found that about one-quarter of these systems—including two that 

employed collective bargaining to set minimum wage rates—did not 

specify any criteria. Among the systems that did, inflation or the cost of 

living was the most commonly specified consideration.

Table 5: Criteria for Setting Minimum Wages, Specified by 98 National Systems in 

2005

Source: Francois Eyraud and Catherine Saget, The Fundamentals of Minimum Wage Fixing (Geneva: International Labor Office, 2005). 

| GAO-17-83

Note: Most of the 98 national systems use more than one criterion for determining minimum wages, 

according to the International Labor Organization.

Objectives

No. of systems specifying criterion 

Criteria related to worker needs

Inflation or cost of living 56

Level of wages, incomes 32

Needs of workers and their families 29

Social security benefits 13

Criteria related to employer needs or the economy

Economic situation or development 47

Employment level 24

Productivity 24

Capacity of enterprises to pay 15

No criteria 24
Appendix II: Minimum Wage-Setting Systems 

around the World

Page 64 GAO-17-83 American Samoa

According to the ILO, some national systems list factors to be considered, 

while others define specific indicators and describe how they should be 

applied. For example, according to the ILO, Portugal’s system calls upon 

decision makers to take into account the level of development of the 

productive sector, the requirement for economic and financial stability, 

and the accumulation of capital for development, among other factors; in 

contrast, Ukrainian law specifies that the minimum wage cannot be fixed 

below a minimum subsistence level and includes a defined minimum 

consumption budget.

While most national systems provide for periodic revision of minimum 

wage rates, many do not require reviews at specific intervals. According 

to an ILO-sponsored report completed in 2005, only 23 percent of the 

national systems examined required that their minimum wages be 

reviewed on an annual or biennial basis.3 Some of these countries index 

their minimum wage rates—that is, require the adjustment of minimum 

wages, at specific intervals, on the basis of a given economic indicator. 

For example, according to the ILO, Israel requires that the minimum wage 

remain equivalent to a specific percentage of that country’s national mean 

wage, while Malta’s system requires annual revision of the national 

minimum wage to keep pace with the rate of inflation. Belgium indexes its 

minimum wage rate to changes in its consumer price index, while France 

links annual adjustments in the minimum wage to changes in both prices 

and wages, according to the ILO.

Some countries include “safeguard” features that can be applied to 

moderate increases in response to adverse economic conditions. 

According to the ILO, for example, Costa Rica’s system calls for revising, 

when inflation exceeds a certain limit, the formula normally used to 

calculate minimum wage increases. Peru also normally employs a 

formula to calculate increases, but application of the formula can be 

revised to take into account factors such as a serious economic recession 

or a significant increase in unemployment, according to the ILO. In 

addition, some countries have responded to economic crises by 

postponing minimum wage increases that would otherwise have taken 

effect or by reducing minimum wage levels outright. According to the ILO, 

for example, Spain froze its minimum wage rates in 2012 to encourage 

 3

Francois Eyraud and Catherine Saget, The Fundamentals of Minimum Wage Fixing

(Geneva: International Labor Office, 2005).

Adjustment Mechanisms
Appendix II: Minimum Wage-Setting Systems 

around the World

Page 65 GAO-17-83 American Samoa

job creation after a downturn in its economy. Greece first froze, and then 

reduced, minimum wage rates in response to worsening economic 

conditions beginning in 2010, also according to the ILO.

Some national systems exclude specific groups of workers from 

application of the minimum wage. According to the ILO, the most 

commonly excluded groups are agricultural workers and those employed 

in domestic service. Workers in family businesses or small enterprises 

and younger workers or those serving apprenticeships are also excluded 

in some countries. According to the ILO, a few systems maintain more 

specific exclusions—for example, certain seafarers (five countries) and 

workers in export processing zones (two countries), according to the 

ILO.4 More generally, a 2014 ILO report observed that when wages are 

set by sector and there is no generally applicable minimum wage to serve 

as a backup, many workers may be excluded from coverage.5

 In 

Cambodia, for example, minimum wage regulations apply only to specific 

industries (i.e., textiles, garments, and shoe assembly), according to the 

ILO. 

National systems produce widely varying minimum wage rates. As might 

be expected, international comparisons generally show that lower-income 

countries require lower minimum rates of pay. However, minimum wages 

also vary greatly relative to prevailing economic conditions within 

individual countries. For example, one Africa-focused study found 

minimum wages by country ranging from less than 10 percent to more 

than 100 percent of average wages.6

 4

Naj Ghosheh, Working Conditions Laws Report 2012: A Global Review (Geneva: 

International Labor Office, 2013). The five countries that excluded certain seafarers were 

the Democratic Republic of Congo, Nigeria, Indonesia, South Korea, and Saudi Arabia. 

The two countries that excluded workers in export processing zones were Ghana and 

Mauritius.

5

Minimum Wage Systems: General Survey of the Reports on the Minimum Wage Fixing 

Convention, 1970 (No. 131), and the Minimum Wage Fixing Recommendation, 1970 (No. 

135), Report of the Committee of Experts on the Application of Conventions and 

Recommendations (Articles 19, 22, and 35 of the Constitution), International Labor 

Conference, 103rd Session, 2014 (Geneva: International Labor Office, 2014).

6

Haroon Bhorat, Ravi Kanbur, and Benjamin Stanwix, Minimum Wages in Sub-Saharan 

Africa: A Primer (Bonn: Institute for the Study of Labor, July 2015).

Coverage

Level
Appendix II: Minimum Wage-Setting Systems 

around the World

Page 66 GAO-17-83 American Samoa

While minimum wage rates set at very low levels relative to local average 

pay rates will affect relatively few workers, rates set at very high levels 

relative to local pay will apply to such a large portion of the covered 

workforce that they become, in effect, the average wage for those 

workers. However, comparatively high rates may heighten enforcement 

challenges. Employer noncompliance and movement of substantial 

numbers of workers into the informal economy may result in a substantial 

portion of eligible workers earning less than the legal minimum wage. For 

example, according to the World Bank, Paraguay established a 

comparatively high minimum wage (equal to 72 percent of the national 

mean wage) but reported that more than 40 percent of the eligible 

workers earned less than the legal minimum wage.

Some national systems set a single minimum wage rate—applicable to all 

or nearly all workers—while others establish multiple rates, varying by 

occupation, sector, or region. Figure 13 shows the results of one ILO 

review of minimum wage rate structures in 144 countries.

Figure 13: Distribution of Minimum Wage Rate Structures in 144 National Systems
Appendix II: Minimum Wage-Setting Systems 

around the World

Page 67 GAO-17-83 American Samoa

In addition, some systems specify lower minimum wage rates for certain 

groups of workers. For example, many countries maintain lower minimum 

wage rates for younger workers. While some countries exclude 

agricultural and domestic workers from the minimum wage entirely, others 

specify lower rates for these workers. Some countries with federal 

systems of government have in place a single national rate, or both 

national and state-level rates. Others assign minimum wage-setting 

responsibility to states or provinces. For example, according to the ILO, 

Canada’s provinces each set their own minimum wages. In India, 

according to the ILO, minimum wage-setting authority lies with the federal 

government for some sectors and with the states for others. The 

Philippine system relies on regional wage boards to set minimum wage 

rates not only by region but also by sector, resulting in a very large 

number of minimum wages being in force at any given time, according to 

the ILO.7

Some nations with overseas territories establish minimum wages for 

them. Others allow the territories to set their own minimum wages. For 

example, according to the United Kingdom government, British overseas 

territories have the authority to set their own minimum wages (see the 

text box for an example). According to information obtained from the 

government of France, that country’s overseas territories and 

collectivities, such as French Polynesia, have the authority to set their 

own minimum wages. However, according to the French government, 

France applies its national minimum wage (as well as all other French 

laws and regulations) to its overseas “départements”—entities such as 

Martinique and French Guiana that are geographically separate from 

mainland France but considered to be part of France for political and legal 

purposes.

 7

For additional discussion of minimum wage policy in the Philippines and other countries 

in Southeast Asia, see Ximena Del Carpio and Laura Pabon, Minimum Wage Policy: 

Lessons with a Focus on the ASEAN Region (World Bank: January 2014).
Appendix II: Minimum Wage-Setting Systems 

around the World

Page 68 GAO-17-83 American Samoa

Minimum Wage in the Falkland Islands

The Falkland Islands applied its first territorial minimum wage in 2013, according to 

Falkland Islands government documents. After reviewing multiple minimum wagesetting methodologies and consulting with the public, the territory began by adopting a 

minimum wage that would provide an income equivalent to 60 percent of the territorial 

median wage—a percentage that, according to Falkland Islands government officials, is 

commonly regarded in the United Kingdom and other European Union countries as 

equivalent to a poverty threshold income. In adopting this measure, Falklands officials 

observed that a preferable alternative would be to base the minimum wage on actual 

data on poverty levels and household expenditures in the territory, but such information 

was not immediately available. 

After initially setting the minimum wage at £5.05 per hour, the Falklands government 

conducted a study of the cost of living in the islands. Government officials adapted 

methodologies for determining a “living wage” used in the United Kingdom itself and in 

other British overseas dependencies, gathered data on local costs, and came up with a 

new target hourly minimum wage. According to an official from the Falkland Islands 

government, effective January 1, 2016, the government increased the previous 

minimum wage to £5.38, or 75 percent of the target “living wage” of £7.26 per hour. 

Falklands officials reported that the government has also approved a second increase, 

to 80 percent of the target level, to take effect in January 2017.

Source: GAO analysis of information provided by the government of the Falkland Islands. | GAO-17-83
Appendix III: Selected Federal Laws Related to 

Minimum Wages in American Samoa, 1938-

2015

Page 69 GAO-17-83 American Samoa

Table 6 summarizes key federal laws regarding minimum wages in 

American Samoa.

Table 6: Selected Federal Laws Related to Minimum Wages in American Samoa, 1938-2015

U.S. law Year enacted Description

Pub. L. No. 75-718 

(FLSA)

1938 Established a federal minimum wage for the United States.

Pub. L. No. 84-1023 1956 Authorized the Secretary of Labor to establish minimum wages in American Samoa based 

on the recommendation of SICs, following the procedures and standards used in Puerto 

Rico and the U.S. Virgin Islands.

P.L. 85-750 1958 Stipulated that SIC reviews of wage orders not equal to the federal minimum shall take 

place biennially (i.e., every other year) unless the Secretary of Labor ordered an additional 

review.

Pub. L. No. 93-259 1974 Amended the SIC recommendation requirements to provide that a SIC shall recommend 

the federal minimum wage, unless there is substantial documentary evidence, including 

pertinent unabridged profit-and-loss statements and balance sheets for a representative 

period of years or, in the case of employees of public agencies, other appropriate 

information, in the record that establishes that the industry, or a predominant portion 

thereof, is unable to pay that wage. 

Pub. L. No. 101-583 1990 Amended the documentary evidence requirement to remove “including pertinent 

unabridged profit-and-loss statements and balance sheets for a representative period of 

years or, in the case of employees of public agencies, other appropriate information.” 

Pub. L. No. 110-28 2007 Increased the minimum wage for each industry in American Samoa by $0.50 on July 24, 

2007, and set a schedule for a $0.50 increase on May 25 of each subsequent year, until 

the wage rates in American Samoa equaled the federal minimum wage.

Pub. L. No. 111-117 2009 Changed the effective date of the annual minimum wage increases from May 25 to 

September 30, to begin with the increase scheduled for 2010.

Pub. L. No. 111-244 2010 Postponed the scheduled minimum wage increases for 2010 and 2011. Set the increases 

to resume on September 30, 2012. 

Pub. L. No. 112-149 2012 Postponed the scheduled minimum wage increases until September 30, 2015. Increased 

the interval between increases from every year to every 3 years. 

Pub. L. No. 114-61 2015 Decreased the amount of the 2015 triennial increase (and future increases) from $0.50 to 

$0.40, with the next increase scheduled to occur on September 30, 2018. 

Legend: FLSA = Fair Labor Standards Act, Pub. L. No. = Public Law Number, SIC = special industry committee.

Source: GAO analysis of U.S. minimum wage law. | GAO-17-83

Appendix III: Selected Federal Laws Related 

to Minimum Wages in American Samoa, 

1938-2015
Appendix IV: State Minimum Wage Law 

Requirements Related to Adjustment 

Mechanisms

Page 70 GAO-17-83 American Samoa

Table 7 summarizes certain aspects of state minimum wage laws in effect 

as of September 17, 2016. Specifically, we reviewed state laws and 

constitutions in each of the 50 U.S. states and the District of Columbia to 

identify and summarize the method by which enacted state law as of 

September 17, 2016, automatically adjusts the state minimum wage at 

future dates. The methodology for compiling this table was to search each 

state’s statutory and constitutional texts for the phrase “minimum wage” 

and to identify and describe any requirements related to minimum wage 

adjustment mechanisms. As an additional check, we scanned relevant 

portions of the table of contents for each state statutory code and applied 

professional judgment to consider any additional sections that appeared 

to be relevant to the process for adjusting the state minimum wage.

Table 7 is not intended to be a comprehensive description of the 

adjustment mechanisms of all state minimum wage laws. For example, 

some states may have exceptions or exclusions from each state’s general 

minimum wage laws such as industry-specific minimum wage laws; 

minimum wage laws for tipped workers; and minimum wage laws for 

alternative pay schedules, such as piece rate or commissioned workers. 

Further, many municipalities have enacted minimum wage ordinances, 

while some states have passed supremacy measures barring local 

governments from minimum wage regulation. We did not attempt to 

identify these minimum wage requirements or any related provisions 

concerning the mechanism by which these minimum wage requirements 

are to be adjusted. Rather, we focused only on states’ general minimum 

wage laws and related adjustment mechanisms. 

Federal minimum wage laws—to the extent they are applicable—provide 

the absolute floor on workers’ wages, regardless of state law. This table 

only reflects state statutory law and relevant constitutional provisions. 

Though state executive orders, executive branch regulations, and state 

court jurisprudence may supplement or modify the implementation of 

these statutory provisions, we did not review these sources in compiling 

this table. Importantly, some states empower their Labor Commissioner, 

wage board, or similar entity to make adjustments to the state minimum 

wage for specific occupations, industries, age brackets, vocational 

students, or regions. This regulatory mechanism may have sweeping 

effects but was outside of the scope of this table. The information in this 

table has not been verified by cognizant state officials. 

Table 8 summarizes the statutory adjustment mechanisms for states’ 

general minimum wage laws discussed in table 7. This summary includes 

the number of states without a state minimum wage law and the number 

Appendix IV: State Minimum Wage Law 

Requirements Related to Adjustment 

Mechanisms 
Appendix IV: State Minimum Wage Law 

Requirements Related to Adjustment 

Mechanisms

Page 71 GAO-17-83 American Samoa

of states with fixed, indexed or scheduled adjustment mechanisms in their 

state minimum wage laws or a combination thereof. 

Table 7: Statutory Adjustment Mechanisms for States’ General Minimum Wage Laws, by U.S. State

U.S. state Adjustment mechanisma Description of adjustment mechanism

Alabamab N/A N/A

Alaska Indexed or tied to federal 

minimum wage

Indexed annually to the BLS CPI-U Anchorage Metropolitan Area average 

for the prior calendar year. If indexed rate falls below the federal minimum 

wage plus $1, then the minimum wage is raised to this amount.

Arizona Indexed Indexed annually to the BLS CPI-U U.S. city average for all items for the 

prior calendar year.

Arkansas Scheduled Yearly scheduled increases, with the last scheduled increase to take 

effect on January 1, 2017.

California Scheduled then indexed New legislation signed into law on April 4, 2016, outlines yearly scheduled 

increases through January 1, 2023. Beginning on January 1, 2024, the 

minimum wage will be indexed to the lower of (1) the BLS CPI-W or (2) a 

3.5% increase annually.

Colorado Indexed Indexed annually to the BLS CPI-U for Colorado. 

Connecticut Scheduled or tied to federal 

minimum wage

Yearly scheduled increases, with the last scheduled increase to take 

effect on January 1, 2017. If the rate set by the schedule falls below 

100.5% of the federal minimum wage, then the minimum wage is raised to 

this amount.

Delaware Fixed N/A

District of Columbia Scheduled or tied to federal 

minimum wage and then 

Indexed 

Yearly scheduled increases through July 1, 2020, but If the scheduled rate 

is below the federal minimum wage, then the minimum hourly wage paid 

is the federal minimum wage plus $1. Beginning on July 1, 2021, the 

minimum wage will be indexed annually to the BLS CPI-U Washington 

Metropolitan Area for the prior calendar year.

Florida Indexed Indexed annually to the BLS CPI-W South Region for the prior 12 months.

Georgia Fixed N/A 

Hawaii Scheduled Yearly scheduled increases, with the last scheduled increase to take 

effect on January 1, 2018.

Idaho Fixed N/A

Illinois Fixed N/A

Indiana Fixed N/A

Iowa Fixed N/A

Kansas Fixed N/A

Kentucky Fixed N/A 

Louisianab N/A N/A

Maine Fixed N/A

Maryland Scheduled Yearly scheduled increases, with the last scheduled increase to take 

effect on July 1, 2018.
Appendix IV: State Minimum Wage Law 

Requirements Related to Adjustment 

Mechanisms

Page 72 GAO-17-83 American Samoa

U.S. state Adjustment mechanisma Description of adjustment mechanism

Massachusetts Scheduled or tied to federal 

minimum wage

Minimum wage statute is effective until January 1, 2017, at which point a 

new statute will take effect raising the minimum wage $1. At no point, 

however, can the minimum wage rate be less than $0.50 higher than the 

effective federal minimum rate. 

Michigan Scheduled then indexed Yearly scheduled increases, with the last scheduled increase to take 

effect on January 1, 2018. Beginning January 1, 2019, the minimum wage 

will be indexed to the lower of (1) the 5-year average of the BLS CPI-U for 

the Midwest Region or (2) 3.5%. There will be no increase in the indexed 

minimum wage rate if the Michigan unemployment rate determined by the 

BLS was 8.5% or more in the prior year. 

Minnesota Indexed Beginning in 2017, the minimum wage is indexed to the lower of (1) the 

rate of personal consumption expenditures as determined by the U.S. 

Department of Commerce, Bureau of Economic Analysis, for the prior 12-

month period; or (2) a 2.5% increase. 

Mississippib N/A N/A

Missouri Indexed Indexed annually to the BLS CPI-W for the preceding year.

Montana Indexed Indexed annually to the BLS CPI-U U.S city average for the preceding 

year.

Nebraska Fixed N/A

Nevada Indexed Indexed annually to the greater of the amount of increase in the federal 

minimum wage over $5.15 per hour or the BLS CPI-U U.S. city average.

The CPI adjustment for any 1 year may not exceed 3%. 

New Hampshire Fixed N/A

New Jersey Indexed Base minimum wage is the highest of the rate set by (1) statute, (2) the 

amount of $8.25 specified in the New Jersey constitution, or (3) the 

federal minimum wage. This base rate is indexed annually to the BLS 

CPI-W for the prior year.

New Mexico Fixed N/A

New York Scheduled then indexed by 

commissioner for certain areas

Variable schedule depending on employer size, location, and sector. For 

other than the New York City area and the remainder of the downstate 

areas, beginning on December 31, 2021, the Commissioner will adjust the 

minimum wage for the remainder of the state, factoring in various inflation 

measures.

North Carolina Fixed N/A

North Dakota Fixed N/A

Ohio Indexed Indexed annually to the BLS CPI-W for 12 months prior.

Oklahoma Fixed N/A

Oregon Scheduled then indexed Yearly scheduled increases, with the last scheduled increase to take 

effect on July 1, 2022, at variable rates depending on location. Beginning 

July 1, 2023, the minimum wage will be indexed to the BLS CPI-U U.S. 

city average for the prior year, with some variations for location.

Pennsylvania Fixed N/A

Rhode Island Fixed N/A

South Carolinab N/A N/A
Appendix IV: State Minimum Wage Law 

Requirements Related to Adjustment 

Mechanisms

Page 73 GAO-17-83 American Samoa

U.S. state Adjustment mechanisma Description of adjustment mechanism

South Dakota Indexed Indexed annually to the BLS CPI-U U.S. city average. 

Tennesseeb N/A N/A

Texas Fixed N/A

Utah Fixed N/A

Vermont Scheduled then indexed Yearly scheduled increases, with the last scheduled increase to take 

effect on January 1, 2018. Beginning January 1, 2019, the minimum wage 

will be annually indexed to the lower of (1) the BLS CPI-U U.S. city 

average for the prior 12 months or (2) a 5% increase.

Virginia Fixed N/A

Washington Indexed Indexed annually to the BLS CPI-W for the prior 12 months.

West Virginia Fixed N/A

Wisconsin Fixed N/A

Wyoming Fixed N/A

Legend: BLS = Bureau of Labor Statistics, CPI-U = Statistics Consumer Price Index for All Urban Consumers, CPI-W = Consumer Price Index for Urban 

Wage Earners and Clerical Workers, N/A = not applicable.

Source: GAO analysis of state statutory and constitutional provisions related to general minimum wage laws and related adjustment mechanisms. | GAO-17-83

a

“Indexed” refers to statutorily mandated intervals requiring the minimum wage to change with an 

inflation measure. “Scheduled” refers to one or more in a series of predetermined increases in the 

minimum wage at a predetermined date or time interval, with at least one increase scheduled for a 

future date. “Scheduled then indexed” means that after the final scheduled increase takes effect, the 

minimum wage will adjust with an inflation measure. “Tied to federal minimum wage” means that the 

minimum wage must be a set amount above the federal minimum wage. “Fixed” means that the 

minimum wage rate will not change without further legislation. “Commissioner” refers to an executive 

branch official who has the authority to adjust the minimum wage laws.

b

Alabama, Louisiana, Mississippi, South Carolina, and Tennessee do not have their own state 

minimum wage laws; therefore, they default to the federal minimum wage.
Appendix IV: State Minimum Wage Law 

Requirements Related to Adjustment 

Mechanisms

Page 74 GAO-17-83 American Samoa

Table 8: Summary of Statutory Adjustment Mechanisms for States’ General 

Minimum Wage Laws

Summary of findings 

Twenty-three states have a fixed minimum wage, not including the 5 states with no state 

minimum wage.

Seventeen states and the District of Columbia use, or plan to use, indexing to set their 

minimum wage, applying various measures.

• Fifteen states and the District of Columbia use a BLS CPI measure to index their 

minimum wage. Of these, 

• six states use the BLS CPI-U U.S. city average,

• six states use the BLS CPI-W, 

• one state uses a BLS CPI-U for a regional area,

• one state and the District of Columbia use a BLS CPI-U for a metropolitan area, 

and

• one state uses a BLS CPI-U for a specific state,

• One state uses the state commissioner to index its minimum wage.

• One state uses a BEA measure, the personal consumption expenditure.

Eleven states schedule minimum wage increases.

Six use both indexing and a schedule. 

Legend: BLS = Bureau of Labor Statistics, CPI-U = Consumer Price Index for All Urban Consumers, 

CPI-W = Consumer Price Index for Urban Wage Earners and Clerical Workers.

Source: GAO analysis of state statutory and constitutional provisions related to general minimum wage laws and related adjustment 

mechanisms. | GAO-17-83

Note: “Fixed” means that the minimum wage rate will not change without further legislation. 

“Indexing” refers to statutorily mandated intervals requiring the minimum wage to change with an 

inflation measure. “Commissioner” refers to an executive branch official who has the authority to 

adjust the minimum wage laws. “Schedule” refers to one or more in a series of predetermined 

increases in the minimum wage at a predetermined date or time interval, with at least one increase 

scheduled for a future date. 
Appendix V: Projected Convergence of 

American Samoa Minimum Wages with Federal 

Minimum Wage

Page 75 GAO-17-83 American Samoa

Table 9 provides information on the time line for American Samoa 

minimum wages to equal the federal minimum wage under the current 

law and several former schedules.

Table 9: Projected Dates for American Samoa Minimum Wages to Converge with 

Federal Minimum Wage under Past and Current Schedules

U.S. law scheduling 

minimum wage increases

Projected convergence of 

highest minimum wage 

with federal minimum 

wage

Projected convergence of 

lowest minimum wage 

with federal minimum 

wage

Pub.L. No. 110-28

(Enacted 2007)

May 2013 May 2016

Pub.L. No. 111-117

(Enacted 2009)

Sept. 2013 Sept. 2016

Pub.L. No. 111-224

(Enacted 2010)

Sept. 2015 Sept. 2018

Pub.L. No. 112-149

(Enacted 2012)

Sept. 2024 Sept. 2033

Pub.L. No. 114-61

(Enacted 2015)

Sept. 2027 Sept. 2036

Legend: Pub. L. No. = Public Law Number.

Source: GAO analysis of U.S. minimum wage law. | GAO-17-83

Notes: “Federal minimum wage” refers to the minimum wage required by the Fair Labor Standards 

Act in the 50 U.S. states, the District of Columbia, and any territory or possession of the United 

States, subject to certain exceptions. Our analysis assumes convergence with a federal minimum 

wage of $7.25 and does not account for potential changes in the federal minimum wage.

Since 2006, the stevedoring industry has had the highest minimum wage in American Samoa, and 

garment manufacturing has had the lowest. Minimum wages for the other 16 industry categories in 

American Samoa would converge with the federal minimum wage sometime between the projected 

dates for the highest and lowest minimum wages.

Appendix V: Projected Convergence of 

American Samoa Minimum Wages with 

Federal Minimum Wage
Appendix VI: American Samoa Minimum Wage 

Poster

Page 76 GAO-17-83 American Samoa

Figure 14 shows the U.S. Department of Labor (DOL) poster outlining 

federal minimum wage requirements for American Samoa employers 

subject to the Fair Labor Standards Act (FLSA). According to the DOL, all 

such employers are required to post this information in conspicuous 

places in every establishment where employees subject to the FLSA’s 

minimum wage provisions are employed, so as to permit them to readily 

observe it.

Appendix VI: American Samoa Minimum 

Wage Poster
Appendix VI: American Samoa Minimum Wage 

Poster

Page 77 GAO-17-83 American Samoa

Figure 14: U.S. Department of Labor Poster Outlining Federal Minimum Wage 

Requirements for American Samoa
Appendix VI: American Samoa Minimum Wage 

Poster

Page 78 GAO-17-83 American Samoa
Appendix VII: Highest American Samoa 

Minimum Wage, Adjusted for Inflation

Page 79 GAO-17-83 American Samoa

Figure 15 shows the minimum wage for the American Samoa stevedoring 

sector (the highest minimum wage in 2015) from 1997 to 2016, adjusted 

for inflation using the American Samoa Consumer Price Index and the 

U.S. Consumer Price Index for All Urban Consumers.

Figure 15: Highest American Samoa Minimum Wage, Adjusted for Inflation in American Samoa and the United States, 1997-

2016

Note: Amounts shown are adjusted according to the American Samoa (AS) government’s consumer 

price index (CPI) for 2016 (upper) and the Bureau of Labor Statistics’ U.S. CPI for All Urban 

Consumers for 2014.

Appendix VII: Highest American Samoa 

Minimum Wage, Adjusted for Inflation
Appendix VIII: Comparison of Labor and Tariff 

Costs for Four Potential Tuna Canning 

Business Models

Page 80 GAO-17-83 American Samoa

Although American Samoa is located near rich fishing grounds, its labor 

costs are significantly higher than those in competing countries. 

According to cannery officials, the canneries’ current operations in 

American Samoa are not competitive with other business models. To 

illustrate tuna canning costs for other business models, we compared the 

labor and tariff costs associated with four potential business scenarios for 

the cannery operations currently located in American Samoa. The 

following analysis provides cost estimates for the four possible models, 

assuming constant total production under each model and including four 

models that we presented in a 2011 report.1 Our analysis considers only 

labor costs and tariffs, to show the effect of variation in different countries. 

Our analysis excludes other associated costs, including transportation, 

refrigeration, opening of a new plant (if needed), as well as costs 

associated with establishing multiple production locations. Our analysis 

also excludes nonwage labor costs, such as the costs of employer payroll 

tax contributions.2

• Model A (tuna loining and canning located in American Samoa). 

Tuna processing currently performed in American Samoa would 

remain entirely in American Samoa. Canneries located in American 

Samoa would hire local and foreign workers to loin (clean, cook, and 

cut) and can the fish. In addition, the plant would process some loins 

imported from countries with lower wages. The canned tuna from 

American Samoa would be exported directly to the United States and 

would benefit from tariff-free access to the U.S. market. With an 

estimated workforce of 2,700 employees in American Samoa, the 

associated labor cost would be $29 million in 2016, with zero tariff 

costs. 

 1

See GAO, American Samoa and Commonwealth of the Northern Mariana Islands: 

Employment, Earnings, and Status of Key Industries Since Minimum Wage Increases 

Began, GAO-11-427 (Washington D.C.: June 23, 2011). This analysis was first introduced 

in GAO, American Samoa and Commonwealth of the Northern Mariana Islands: Wages, 

Employment, Employer Actions, Earnings, and Worker Views Since Minimum Wage 

Increases Began GAO-10-333 (Washington, D.C.: April 8, 2010). In GAO-10-333, we 

found that a model relying on fish loins sourced outside the United States and canned in 

the 50 U.S. states, as compared with a model of loining and canning in American Samoa, 

would have annual labor savings of $12.1 million in 2009 that would more than offset 

annual tariff costs of $320,000. In 2006, before the minimum wage increases began, labor 

costs were estimated at $13 million under the American Samoa model and $5.6 million 

under the imported loins model.

2

For example, for 2011, employers in the United States were required to contribute the 

equivalent of 6.2 percent of employee wages to Social Security and 1.45 percent to 

Medicare, up to $106,800 in employee wages.

Appendix VIII: Comparison of Labor and 

Tariff Costs for Four Potential Tuna Canning 

Business Models
Appendix VIII: Comparison of Labor and Tariff 

Costs for Four Potential Tuna Canning 

Business Models

Page 81 GAO-17-83 American Samoa

• Model B (relocating tuna loining to Thailand or another country 

with lower labor costs and canning processed loins in the U.S. 

states). The loining operation—the most labor-intensive part of the 

operation—would move to low labor-cost countries, such as Thailand, 

Trinidad, Fiji, Mauritius, or Papua New Guinea, where the fish loin 

would be cut, cleaned, and cooked and then placed in pouches. The 

fish would then be exported to the United States, where it would be 

canned. The imported fish would carry a tariff of $11 per metric ton, 

and workers would be employed in a low labor-cost country at $1.20 

per hour;3 the combined tariff and labor cost in 2016 would be $21.4 

million.4 No workers would remain in American Samoa cleaning fish, 

and 540 workers would be employed in the 50 U.S. states at $14.00 

per hour.5 However, according to an industry expert, relocating 

operations from American Samoa could affect the canneries’ eligibility 

for certain U.S. government contracts that require U.S.-sourced and -

processed fish. 

• Model C (relocating all loining and canning to a tariff-free 

country). Loining would take place in a country with zero tariffs on 

canned tuna exported to the United States.6 Workers would be 

employed at $1.20 per hour as in Model B. Under this model, the 

American Samoa canneries would close, and all 2,700 positions 

would be relocated to a tariff-free country. The cost would be $6.6 

million for 2016, assuming no wage increases in the tariff-free country. 

However, as in Model B, relocating operations from American Samoa 

could affect the canneries’ eligibility for certain U.S. government 

contracts.

 3

According to World Bank data, this rate consists of the average of the minimum wages in 

Samoa, Thailand, and Vietnam, countries where a significant portion of tuna processing 

currently takes place.

4

Model B estimates differ somewhat from those in our earlier report (GAO-11-427) 

because the current analysis is based on the increased number of workers employed in 

the American Samoa tuna canning facilities with the addition of the Tri Marine facility. The 

tariff rate indicated is according to Chicken of the Sea data and refers to the Harmonized 

Tariff Schedule code 1604.14.4000.

5

Our analysis assumed that U.S. workers are paid $14.00 per hour, based on past 

statements from industry officials. The processed fish is exported to the United States, 

where it is canned by the remaining 20 percent of the 2,700 workforce.

6

For example, Samoa is near American Samoa and, through December 31, 2010, was 

allowed to export tuna to the United States tariff free under trade agreements with the 

United States.
Appendix VIII: Comparison of Labor and Tariff 

Costs for Four Potential Tuna Canning 

Business Models

Page 82 GAO-17-83 American Samoa

• Model D (half of production, including for certain U.S.

government contracts, located in American Samoa and the other 

half relocated to a tariff-free country). In this hybrid model, the 

American Samoa cannery would continue to supply canned tuna for 

U.S. government contracts (20 percent of production from Model A), 

while another 30 percent of production would remain in American 

Samoa.7 The remaining 50 percent of production would move to a 

country that exports canned tuna tariff free to the United States. For 

this model, we assumed that 50 percent of the current workforce 

would remain in American Samoa and the other 50 percent would be 

located in a tariff-free country. The associated cost would be $17.8 

million in 2016, with zero tariff costs.

Figure 16 shows that, considering only labor and tariff costs, Model A—

processing all loins in American Samoa—has higher costs than the 

alternatives. Model C—moving operations to a tariff-free country and 

closing operations in American Samoa—presents the highest combined 

labor and tariff cost savings but would result in approximately 2,700 fewer 

jobs in American Samoa. Model D—moving 50 percent of production to a 

tariff-free country and keeping 50 percent in American Samoa—would 

present the next-highest labor and tariff cost savings while retaining 

eligibility for certain U.S. government contracts and would result in about 

1,350 fewer jobs in American Samoa.8 Model B—moving the loining 

operations to a country with lower wages—also presents significant cost 

savings; however, importing processed loins to the United States would

incur tariffs, and wages for canning in any of the 50 U.S. states would be 

higher than in competing tuna processing countries. 

 7

We reported in 2011 that tuna industry officials stated that 20 percent of production is not 

sufficient to cover overhead costs and operate a cannery in American Samoa. To illustrate 

a hybrid production model, we assumed that another 30 percent of production would 

remain in American Samoa. See GAO-11-427.

8

Our estimates of job loss include only workers directly employed in tuna canning. If we 

included workers who manufacture cans for the company and would lose their jobs if the 

cannery relocated, the estimates of job loss would be higher. Additionally, our estimate 

does not take into account the likely effects that actions taken by American Samoa’s tuna 

canning industry would have on other businesses.
Appendix VIII: Comparison of Labor and Tariff 

Costs for Four Potential Tuna Canning 

Business Models

Page 83 GAO-17-83 American Samoa

Figure 16: Comparison of Wage and Tariff Costs for Tuna Canneries Using Alternate Business Models 

Notes: Wages used are $1.20 per hour for the tariff-free country and $14.00 per hour for the United 

States. American Samoa hourly wages are based on the currently scheduled minimum wage. For 

Model D, we assumed that 50 percent of production (20 percent for U.S. government contracts and 

30 percent for other production) would remain in American Samoa and the remaining 50 percent of 
Appendix VIII: Comparison of Labor and Tariff 

Costs for Four Potential Tuna Canning 

Business Models

Page 84 GAO-17-83 American Samoa

production would move to a country that exports canned tuna tariff free to the United States. For 

related analysis, see GAO, American Samoa and Commonwealth of the Northern Mariana Islands: 

Employment, Earnings, and Status of Key Industries Since Minimum Wage Increases Began, GAO11-427 (Washington D.C.: June 23, 2011). This analysis was first introduced in GAO, American 

Samoa and Commonwealth of the Northern Mariana Islands: Wages, Employment, Employer 

Actions, Earnings, and Worker Views Since Minimum Wage Increases Began, GAO-10-333

(Washington, D.C.: Apr. 8, 2010).
Appendix IX: Projected Timeframes for 

American Samoa Minimum Wages to Equal 

Federal Minimum Wage

Page 85 GAO-17-83 American Samoa

Table 10 shows projected timeframes for American Samoa minimum 

wages, if indexed to the American Samoa cost of living on an annual 

basis, to converge with the current federal minimum wage of $7.25 given 

hypothetical annual increases in the cost of living.

Table 10: Projected Timeframes for American Samoa Minimum Wage to Equal the 

Current Federal Minimum Wage under an Indexed Approach, Given Hypothetical 

Annual Increases in the Cost of Living

Annual percentage increase in cost of living Timeframe for convergencea

0.5 2056-2110

1.0 2036-2062

1.5 2029-2047

2.0 2026-2040

2.5 2024-2035

3.0 2023-2032

3.5 2022-2030

4.0 2021-2028

4.5 2021-2027

5.0 2020-2026

5.5 2020-2025

6.0 2020-2024

6.5 2020-2024

7.0 2019-2023

7.5 2019-2023

8.0 2019-2022

8.5 2019-2022

9.0 2019-2022

9.5 2019-2022

10.0 2018-2021

Source: GAO analysis. | GAO-17-83

a

The lower and upper bounds of the timeframes shown are the years when, respectively, the 2015 

highest American Samoa minimum wage—$5.99, for the stevedoring (dockworker) sector— and 

lowest American Samoa minimum wage—$4.58, for the garment manufacturing sector—are 

projected to equal the current federal minimum wage of $7.25. In calculating the timeframes, we 

assumed that minimum wage adjustments would begin in 2017, and minimum wages were rounded 

to the nearest $0.01 after applying the annual percentage increase in the cost of living.

Appendix IX: Projected Timeframes for 

American Samoa Minimum Wages to Equal 

Federal Minimum Wage 
Appendix IX: Projected Timeframes for 

American Samoa Minimum Wages to Equal 

Federal Minimum Wage

Page 86 GAO-17-83 American Samoa

Table 11 shows the projected timeframes for the American Samoa 

minimum wage to equal the current federal minimum wage of $7.25 under

a schedule-based approach, given varying hypothetical amounts and 

frequency of scheduled increases. 

Table 11: Projected Timeframes for American Samoa Minimum Wages to Equal the Federal Minimum Wage under a ScheduleBased Approach, Given Varying Hypothetical Amounts and Frequency of Scheduled Increases

Frequency of increasesa

Amount of increase 1 year 2 years 3 years 4 years 5 years

$0.60 2019-2021 2021-2025 2023-2029 2025-2033 2027-2037

$0.55 2019-2021 2021-2025 2023-2029 2025-2033 2027-2037

$0.50 2019-2022 2021-2027 2023-2032 2025-2037 2027-2042

$0.45 2019-2022 2021-2027 2023-2032 2025-2037 2027-2042

$0.40 2020-2023 2023-2029 2026-2035b 2029-2041 2032-2047

$0.35 2020-2024 2023-2031 2026-2038 2029-2045 2032-2052

$0.30 2021-2025 2025-2033 2029-2041 2033-2049 2037-2057

$0.25 2022-2027 2027-2037 2032-2047 2037-2057 2042-2067

$0.20 2023-2030 2029-2043 2035-2056 2041-2069 2047-2082

$0.15 2025-2034 2033-2051 2041-2068 2049-2085 2057-2102

$0.10 2029-2043 2041-2069 2053-2095 2065-2121 2077-2147

Source: GAO analysis. | GAO-17-83

a

The lower and upper bounds of the timeframes shown are the years when, respectively, the 2015 

highest American Samoa minimum wage—$5.99, for the stevedoring (dockworker) sector—and 

lowest American Samoa minimum wage—$4.58, for the garment manufacturing sector—are 

projected to equal the current federal minimum wage of $7.25. In calculating the timeframes, we 

assumed that minimum wage adjustments would begin in 2017.

b

Under the current schedule, American Samoa’s minimum wages will increase by $0.40 every 3 

years, with the next increase scheduled for 2018. Because our calculations assume that minimum 

wage adjustments begin in 2017, the projected timeframe for equaling the current federal minimum 

wage under a hypothetical schedule of increases of the same amount and frequency differs slightly 

from the actual projected timeframe of 2027-2036.
Appendix X: Examples of Combining an 

Indexed Approach with a Schedule-Based 

Approach

Page 87 GAO-17-83 American Samoa

If an indexing approach were selected as the primary adjustment 

mechanism to increase American Samoa’s minimum wages, it could be 

combined with a target timeframe and schedule for equaling the federal 

minimum wage. Table 12 presents a hypothetical example of 

supplementing indexed increases to American Samoa minimum wages 

during periods of relatively low inflation. This example is based on the 

following assumptions, chosen for illustrative purposes only: 

• an American Samoa industry sector minimum wage of $4.58 for 

calendar year 2016;

• a primary adjustment mechanism of indexing future increases to 

annual changes in American Samoa's cost of living; and

• a secondary adjustment mechanism that calculates a comparative 

minimum wage for 2017, based on a schedule for equaling the current 

federal minimum wage of $7.25 by 2027 through annual increases of 

$0.25 beginning in 2017.

Table 12: Hypothetical Example of Supplementing Indexed Increases to American 

Samoa Minimum Wages during Periods of Relatively Low Inflation

U.S. federal minimum wage $7.25

American Samoa industry sector minimum wage in 2016 $4.58a

Hypothetical percentage increase in American Samoa’s cost of living 

for prior year

2.0b

Primary mechanism: 

New 2017 American Samoa minimum wage based on indexing to the 

cost of living

$4.67c

Secondary mechanism:

Comparative 2017 American Samoa minimum wage based on 

schedule 

$4.83d

Supplemental increase to keep minimum wages on schedule toward 

reaching the federal minimum wage

Up to $0.16e

Source: GAO analysis. | GAO-17-83

a

This hypothetical example uses the lowest 2015 American Samoa industry sector minimum wage 

(for garment manufacturing), but any minimum wage amount could be used. It is assumed that the 

minimum wage would remain constant in 2016. 

b

The hypothetical percentage increase in the American Samoa cost of living is relatively low 

compared with the actual average annual percentage increase in the cost of living for American 

Samoa in 2006 through 2015 (4.4 percent), as measured by the American Samoa consumer price 

index.

c

The new 2017 minimum wage reflects an increase of $0.09 ($4.58 x 0.02, rounded to the nearest 

cent). 

Appendix X: Examples of Combining an 

Indexed Approach with a Schedule-Based 

Approach

Example 1
Appendix X: Examples of Combining an 

Indexed Approach with a Schedule-Based 

Approach

Page 88 GAO-17-83 American Samoa

d

The comparative 2017 minimum wage reflects an increase of $0.25, based on a hypothetical 

schedule of $0.25 annual increases that would result in the industry sector minimum wage of $4.58 

equaling the federal minimum wage of $7.25 in 2027.

e

The supplemental increase could be any amount up to the difference between the new 2017 

minimum wage (based on indexing to the cost of living) and the comparative 2017 minimum wage 

(based on the schedule for equaling the federal minimum wage by 2027), or $0.16 ($4.83 minus 

$4.67).

If a scheduled-based approach were selected as the primary adjustment 

mechanism, it could be combined with an indexing component to ensure 

that the scheduled increases keep pace with American Samoa’s cost of 

living. Table 13 presents a hypothetical example of supplementing the 

amount of scheduled increases to American Samoa’s minimum wages 

during periods of relatively high inflation. This example is based on the 

following assumptions, chosen for illustrative purposes only: 

• an American Samoa industry sector minimum wage of $4.58 for 

calendar year 2016;

• a primary adjustment mechanism of scheduled annual increases of 

$0.20, beginning in 2017 and continuing until the American Samoa 

minimum wage equals the current federal minimum wage of $7.25 in 

2030; and

• a secondary adjustment mechanism that monitors an index of the 

American Samoa cost of living and calculates a comparative minimum 

wage for 2017 based on changes in the cost of living. 

Table 13: Hypothetical Example of Supplementing the Amount of Scheduled 

Increases to American Samoa Minimum Wages during Periods of Relatively High 

Inflation

U.S. federal minimum wage $7.25

American Samoa Industry sector minimum wage in 2016 $4.58a

Hypothetical percentage increase in American Samoa’s cost of 

living for prior year

7.0b

Primary mechanism: 

New 2017 American Samoa minimum wage based on schedule 

$4.78c

Secondary mechanism:

Comparative 2017 American Samoa minimum wage based on 

indexing to the cost of living

$4.90d

Supplemental increase to keep minimum wages on pace with the 

cost of living

Up to $0.12e

Source: GAO analysis. | GAO-17-83

Example 2
Appendix X: Examples of Combining an 

Indexed Approach with a Schedule-Based 

Approach

Page 89 GAO-17-83 American Samoa

a

This hypothetical example uses the lowest 2015 American Samoa industry sector minimum wage 

(for garment manufacturing), but any minimum wage amount could be used. It is assumed that the 

minimum wage would remain constant in 2016. 

b

The hypothetical percentage increase for the American Samoa cost of living for the prior year is 

relatively high compared with the actual average annual percentage increase in the cost of living for 

American Samoa in 2006 through 2015 (4.4 percent), as measured by the American Samoa 

consumer price index.

c

The new 2017 American Samoa minimum wage reflects an increase of $0.20 based on a 

hypothetical schedule of $0.20 annual increases that would result in the industry sector minimum 

wage of $4.58 equaling the federal minimum wage of $7.25 in 2030. 

d

The comparative 2017 American Samoa minimum wage reflects an increase of $0.32 ($4.58 x 0.07, 

rounded to the nearest cent).

e

The supplemental increase could be any amount up to the difference between the new 2017 

minimum wage (based on the schedule) and the comparative 2017 minimum wage (based on 

indexing to the cost of living), or $0.12 ($4.90 minus $4.78).
Appendix XI: Comments from the Department 

of the Interior

Page 90 GAO-17-83 American Samoa

Appendix XI: Comments from the 

Department of the Interior
Appendix XI: Comments from the Department 

of the Interior

Page 91 GAO-17-83 American Samoa
Appendix XII: Comments from the Department 

of Labor

Page 92 GAO-17-83 American Samoa

Appendix XII: Comments from the 

Department of Labor

Note: GAO comments 

supplementing those in 

the report text appear at 

the end of this appendix.

See comment 1.
Appendix XII: Comments from the Department 

of Labor

Page 93 GAO-17-83 American Samoa
Appendix XII: Comments from the Department 

of Labor

Page 94 GAO-17-83 American Sam

1. The Department of Labor suggested that our draft did not sufficiently 

acknowledge uncertainty in the employment impact findings of a 2014 

CBO study of potential minimum wage increases and also did not 

adequately describe the study’s findings regarding such increases’ 

beneficial impacts. We concluded that additional information on 

uncertainty in the study’s employment impacts was not needed but that 

additional information on its findings regarding beneficial impacts 

would help to more fully convey the report’s content. We therefore 

added information on the number of people that the CBO study 

estimated would be raised out of poverty by the minimum wage 

increases it examined.

GAO Comments
Appendix XIII: Comments from the American 

Samoa Government

Page 95 GAO-17-83 American Samoa

Appendix XIII: Comments from the American 

Samoa Government

Note: GAO comments 

supplementing those in 

the report text appear at 

the end of this appendix.
Appendix XIII: Comments from the American 

Samoa Government

Page 96 GAO-17-83 American Samoa

See comment 1.
Appendix XIII: Comments from the American 

Samoa Government

Page 97 GAO-17-83 American Samoa

See comment 2.
Appendix XIII: Comments from the American 

Samoa Government

Page 98 GAO-17-83 American Samoa
Appendix XIII: Comments from the American 

Samoa Government

Page 99 GAO-17-83 American Samoa
Appendix XIII: Comments from the American 

Samoa Government

Page 100 GAO-17-83 American Samoa

1. The American Samoa government expressed disappointment that we 

did not extend our examination to include (a) possible adjustments in 

U.S. trade and tax policies that could supplement the incomes of low 

wage workers or help offset the negative impacts of minimum wage 

increases on employers in the territory or (b) other federal programs 

and policies that may present obstacles to the territory’s efforts to 

encourage economic diversification, such as restrictions on 

competition in passenger air carrier service. We recognize that 

adjustments in other federal policies or programs could mitigate 

possible negative effects of minimum wage increases, and 

acknowledge the government’s concern about air service regulations. 

However, in-depth examination of these topics was outside the scope 

of our work.

2. With regard to indices that could be used to adjust minimum wages to 

keep pace with the territory’s cost of living, the American Samoa 

government commented that the American Samoa Consumer Price 

Index (CPI) would be an inappropriate choice and suggested that we

support the application of the U.S. CPI for All Urban Workers or the 

U.S. CPI for Urban Wage Earners and Clerical Workers instead. The 

scope of our work was limited to identifying alternative approaches to 

setting minimum wages. Therefore, we presented a number of indices 

that could be applied but did not recommend an index.

GAO Comments
Appendix XIV: GAO Contact and Staff 

Acknowledgments

Page 101 GAO-17-83 American Samoa

David Gootnick (202) 512-3149, or gootnickd@gao.gov

Andrew Sherrill (202) 512-7252, or sherrilla@gao.gov

Oliver Richard (202) 512-8424, or richardo@gao.gov

In addition to the contacts named above, Pedro Almoguera, Benjamin 

Bolitzer, Jillian Feirson, Emil Friberg, Michael McAtee, Clarita Mrena, 

David Perkins, and Seyda Wentworth made key contributions to this 

report. Benjamin Sinoff, Jill Lacey, Reid Lowe, Mary Moutsos, Mimi 

Nguyen, and Alexander Welsh provided technical assistance.

Appendix XIV: GAO Contact and Staff 

Acknowledgments

GAO Contacts

Staff 

Acknowledgments
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Islands: Economic Indicators Since Minimum Wage Increases Began.

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American Samoa and Commonwealth of the Northern Mariana Islands: 

Employment, Earnings, and Status of Key Industries Since Minimum 

Wage Increases Began. GAO-11-956T. Washington, D.C.: September 

23, 2011.

American Samoa and Commonwealth of the Northern Mariana Islands: 

Employment, Earnings, and Status of Key Industries Since Minimum 

Wage Increases Began. GAO-11-427. Washington, D.C.: June 23, 2011.

American Samoa and Commonwealth of the Northern Mariana Islands: 

Wages, Employment, Employer Actions, Earnings, and Worker Views 

Since Minimum Wage Increases Began. GAO-10-333. Washington, D.C.: 

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