by Alan L. Moss
“Finally, you mentioned that the price of fuel, water, and electricity has gone up in the past few years. These cost increases do not only hurt tuna canneries, they hurt every worker. As the Samoa Economic Report showed us, living costs have increased while your wages fail to cover them.
“So, it seems a bit unfair to me that, on the one hand you complain about rising costs and expect the Com-mittee to take them into account to limit the wages you have to pay. However, you don’t want the Committee to consider those same costs when it comes to the welfare of your workers.”
Michael looked at Owen. The attorney appeared tired and beaten.
***
The cannery’s troubles didn’t end with Eni. Next, Pecura called on Fau, the Samoan representing the local business community.
“Mr. O’Neal, do you enjoy the large salary you are paid by Filet of the Ocean?”
“Yes, I do.”
“And what was the percent increase in your salary the past two years?”
O’Neal, looking down at the conference table, answered reluctantly.
“All managers received a 3.2 percent cost of living increase in each of the past two years.”
“Do you think this policy reflected good business judgment on the part of your company?”
If the executive could have crawled under the table, he would have, but he had to answer the question.
“Yes, sir.”
“Thank you. That’s all I have for this witness,” Fau concluded.
With both Samoans sounding as though they would vote for a real increase, Michael thought he might not need Pecura to form a majority. With both Samoans and organized labor’s representative on his side, deliberations should be swift and favorable to Samoa’s workers.
Given the frazzled appearance of the corporate panel, Pecura called for a ten minute break.
***
With the Committee once again seated, Pecura called on Redferd. He tried to find out how much the cannery paid in taxes to the American Samoan Government. O’Neal declined to answer, claiming that such information, like profits, was proprietary and could be used by their competitors.
However, he said the firm’s tax-exemption certificate was public information and was available on request. Appearing annoyed with O’Neal’s non-answer, Redferd directed Pecura to move on to another Committee member.
***
It was five o’clock and everyone appeared to be tiring. Michael looked to the gallery. Only a dozen spectators remained. Stephanie left and Michael wondered if he would see her that night, beginning to fear his dependence on her and his lack of concern for Karen.
Chairman Pecura addressed Michael and the economist refocused his attention.
“Dr. Bloom, as soon as you’re ready, please go ahead.”
It was time for Michael to retaliate for Owen’s tough questioning.
“Mr. Richards, you advised this Committee that any increase in the minimum wage would result in a decrease in employment. Could you describe the process you used to reach this conclusion? I’m particularly interested in how you factored in the positive effects of productivity gains of almost two percent per year.”
Richards, looking somewhat dazed, played for more time.
“I’m not sure I understand the question.”
Michael was glad to oblige.
“If an economist looked at the relationship between the minimum wage and employment, he would look at those two variables over time. When one went up, did the other go down? Did you use such a process to objectively reach your conclusion that any increase in the minimum wage will result in declining employment?”
“Well, sir,” Richards responded, appearing uncom-fortable in his chair, “not so much by me. Basically, what we look at is what our competition is doing, what are we able to sell the tuna for. We know that if costs increase, it will have a negative impact somewhere in the operation, and while we might make productivity gains, our competitors do too.”
Michael moved in.
“So, what you’re saying is this Committee should base its decision not upon specific, credible evidence, as dictated by the Regulations, but upon a general notion that when costs go up, it creates a negative impact some-where?”
“I don’t know that I would put it that way, exactly,” Richards responded. “Certainly, the closing of our cannery in Puerto Rico is not a notion but a fact.”
“Of course,” Michael shot back, “if you didn’t have the lower wage and higher productivity plant in American Samoa to move much of your Puerto Rican operations to, perhaps that plant would still be open. But let’s move on.
“Can you explain why, when I look at the minimum wage increases over the years, I see no corresponding decreases in employment?”
Looking tired, Richards tried to answer.
“Samoa’s history of relatively small minimum wage increases has made them less relevant here than the larger increases that occurred in Puerto Rico and their impact on employment there.”
Michael pursued the witness. “But, I’ve looked back at fairly large increases in American Samoa’s minimum wage that were put in place a number of years ago and I still saw rising employment. Doesn’t that contradict your contention?”
Losing the battle, Richards opted out.
“Perhaps Mr. O’Neal would like to get into this discussion.”
“As I’ve said many times,” O’Neal began, unruffled, “my main concern is that American Samoa maintains its cost competitive edge. I have to look far beyond this wage board hearing. I’m looking at tariffs scheduled to decline elsewhere and at what’s going on in foreign lands. I’m not just looking at a two-year period. I’m looking out much further than that. I’m trying to figure what it’s going to take for this operation to remain viable in the long term. That’s my overriding concern.”
Michael closed in.
“Well, sir, with all due respect, I believe the long-term viability of the Samoan plant is not your overriding concern. I would contend that your first concern is the profit you return to your parent firm, Crest Foods, and its stockholders. I would contend further that cutting costs, including the value of wages, is part of your strategy to maximize profits.
“Now, all of you have talked about how worried you are by increased costs, but those same costs, as noted earlier, are also increases to the living expenses of your workers. How are they supposed to keep up without significant raises? You would have to increase today’s minimum wage by one dollar and ninety-five cents to provide your workers the buying power of their 1974 earnings. Doesn’t that bother you?”
O’Neal appeared stunned.
“The Consumer Price Index actually supports that fact in Samoa?”
“Yes, sir, it’s on page twenty-three of the Samoa Economic Report.”
O’Neal flipped open the study and reviewed the relevant table.
“Well, I would have to re-examine the data — I have some issues with the way the report has been written.”
Michael wouldn’t let go.
“What’s on page twenty-three is the 1974 minimum wage, the 1974 wage adjusted for inflation to year two-thousand dollars, the year 2000 minimum wage, and the difference between them.”
O’Neal took a few more seconds to examine the data. It appeared as though he, for the first time, understood the argument he had blindly opposed.
“I can grasp the information and I can certainly see it as graphically displayed.”
“Thank you, Mr. O’Neal,” Michael concluded.
Before adjournment, Claire requested a copy of the tuna firm’s tax-exemption — early payment — certificate and Owen agreed to provide it. A tense Galeai Matautu, sitting in the first row of the gallery, believed awareness of the certificate might now be needed to keep the minimum wage increase at or below two percent.
CHAPTER 42
FACING THE INEVITABLE
June 7, 2001
Pago Pago, American Samoa
After adjournment, Claire told Michael it was an informa
tive day that should help the Committee reach a decision. She said the Committee members wanted to have dinner at a place called Sophia’s Barefoot Bar, on the condition that the hearings would not be discussed.
Throughout dinner, Michael waited for Sophia or The Godfather to mention their previous encounter. However, they had the discretion to act as though they had just met him for the first time. After dinner, with everyone exhausted, Michael drove Claire and the Redferds back to the Parrot and Porpoise.
It was five minutes after ten when Michael opened the door to his room. He recognized Stephanie’s perfume.
“Is anyone here?” He asked in a joking tone.
“Sir, I heard you ordered a relaxing bath tonight and I’m here to deliver.”
Michael took off his clothes and walked into the bathroom. He looked at the tub, filled with Stephanie and mountains of bubbles. He stepped in and sat down facing her.
“I heard you killed today,” Stephanie said. “That will show those bastards they don’t own us.”
“Actually, the two Samoan Committee members were the most effective. If we’re able to get the workers a decent increase, they’ll be my heroes."
“Well, you’re my hero,” Stephanie said, leaning over to kiss Michael.
After a playful bath, they retired to bed and Michael, feeling confident from the day’s proceedings, began the discussion they both dreaded.
“I don’t want to spoil the mood but we both know I have only two more nights here. Maybe it’s time to think about how we should face the inevitable.”
Looking into her eyes, Michael could see tears building. Stephanie rolled away from Michael. He put his arms around her, holding her hands in his.
Stephanie began.
“The inevitable is simple. You have a wife you love and I have three children to raise. If you said you can’t live without me, that you will leave your wife and marry me, that we will raise my angels together, then I would go anywhere with you.
“I know I could get a job in Washington and we could have a wonderful life together, but I’m not expecting that because I know what kind of man you are. I know you’re too loyal to your wife of many years to say goodbye and start over with me.”
Michael didn’t know how to tell Stephanie that she was right. He looked forward to retirement, to enjoying years writing and traveling with Karen. He felt deeply for Stephanie but he saw no future with her. Perhaps, if Karen had persisted in seeking a breakup, he would have felt differently, but he and Karen had accomplished too much together.
When Michael didn’t respond, Stephanie spoke.
“Don’t answer now. Let’s just enjoy the night.”
When Michael woke, Stephanie was still in his arms. He could feel her warm breath on his neck and tears on her cheek. They held each other for several minutes. Then, she pulled away, gazing into his eyes.
“You have one more day of hearings and I have work to do at the office. I also have to spend some time with my babies for a change. I’ll come over tonight and we can figure things out.”
“Okay, my love,” Michael answered, not thinking.
CHAPTER 43
DAY THREE OF THE PUBLIC HEARINGS
June 8, 2001
Pago Pago, American Samoa
MORNING SESSION
By eight in the morning, Michael, Claire, and the Redferds were driving toward Pago Pago and the Fono. They purchased the Samoa Press from a street vendor at the Nu’uuli Village main intersection. Michael wanted to see if Wolfson had given Tuesday’s proceedings fair treatment.
Claire thumbed through the Wednesday edition.
“Well, the article on the hearings isn’t on the first or second page. Here it is, on page five. Wait a minute, the entire story focuses on the Department of Interior testimony that they won’t provide money to cover the impact of a minimum wage increase. There are just a few words at the end on the tuna cannery testimony, how they had difficulty defending some of their positions.
“I think we’re fighting a losing battle with everyone but the Committee,” Claire said.
“Well, that’s who counts, isn’t it?” Michael asked. “By the way, what’s the lead article on the front page?”
“Oh, boy,” Claire cried out from the back seat. “This is not good. Let me read it aloud.”
GOVERNMENT PAYROLL NIGHTMARE
Many government workers were shocked and angered when told yesterday that the Bank of Hawaii would not accept their government payroll checks, even for deposit.
The predicament resulted in numerous telephone calls to the Samoa Press. Employees were upset that their loan payments might be delayed and other family obligations missed.
No one seems to know the origin of the problem or how it might be solved. The Territory’s Acting Treasurer is off-Island. In his absence, Controller Teremoana Te’ena is in charge, but has been unavailable for comment.
“Well, if the Committee believes the Government can’t cover its payroll, I guess that argues against a minimum wage increase. On the other hand, the Government has so few workers at the minimum wage, I doubt if what the Committee does will make much difference.”
***
When they arrived at the Fono, Chairman Pecura began by honoring a request from Owen to address the issue of the tax certificate. Pecura called the hearings into session and gave the floor to Owen.
Robert Owen
“Mr. Chairman, in response to yesterday’s request from Ms. Williams, I have copies of our tax-exemption certificate, which I would be glad to distribute to the Committee and staff.”
“That would be fine,” Pecura responded, and the certificates were passed out around the conference table.
Continuing, Owen focused on one section of the certificate.
“As you will see, one section of the agreement should be of special interest to this Committee. It indicates that if the minimum wage increases by more than two percent, Filet of the Ocean will not be required to make an early tax payment to the American Samoan Government of sixty million dollars, scheduled for June fifteen or as soon as the new minimum wage rates are published.
There’s their ace in the hole, Michael thought, and the link to the payroll nightmare. Feeling vulnerable, Michael scratched out a note to Claire.
“This is nothing but extortion by the Government and the tuna canneries. The Government withholds funds from its bank account to make it look as though they are in dire need of cash. Then, the cannery produces a certificate saying a scheduled payment of sixty million dollars will not be made unless the Committee restricts the tuna wage increase to two percent. Can we instruct the Committee to ignore the certificate?”
Claire read the note and scribbled a reply.
“We can instruct them to ignore the certificate but that doesn’t mean they will.”
This unexpected development turned Michael’s optimism into despair and self-doubt. When he accepted this assignment, he firmly believed he could win the battle based solely on the facts, the requirements of the law, and the creation of a level playing field.
Now, for the first time since the hearing began, he doubted his own beliefs and capability. Filet of the Ocean and the American Samoan Government had gone beyond anything he had foreseen. They developed a strategy to manipulate the parties regardless of the relevant data and law.
Michael retreated into a haze of disbelief and uncertainty, convinced he had lost control of the process.
Silence filled the conference room as the Committee members and others tried to understand what this meant. To Michael, it was crystal clear. The Government and cannery had devised a way of pressuring the Committee to limit its minimum wage increase to no more than two percent. Of course, the Committee could ignore it, but if the current payroll crisis was not part of a con, the resulting financial disaster would be placed squarely on the shoulders of the Committee members.
Next, Owen addressed Pecura.
“I wonder if I might ask a few questions of Mr. O’Neal to clarify o
ne key position.”
“Sure, go ahead,” Pecura responded.
Owen began his rehearsed statement with a new confidence.
“Mr. O’Neal, when this certificate was negotiated, I assume you believed the cannery could cover a minimum wage increase of two percent. Is that right?”
“That’s correct,” O’Neal answered, “contrary to what I testified yesterday.”
Owen continued.
“Well, that’s what I wanted to ask you. Yesterday, you testified that any increase in the minimum wage would make the company noncompetitive. Is that still the case today?”
“Well,” O’Neal responded, “based on this tax-exemption certificate, I would say my position is that we can afford a two percent increase over a two-year period.”
"However, the facts presented yesterday about competitiveness haven’t changed. Therefore, how can Filet of the Ocean absorb this increase?” Owen asked.
“It would be best for us if the entire increase became effective in the second year of the two-year cycle. That would give us an opportunity to plan and take other steps to absorb the higher costs.”
“Thank you, Mr. O’Neal. That’s all I have.”
So, all the talk about competitiveness, about how any increase in wages couldn’t be tolerated, about how Samoa could become another Puerto Rico just went out the window. Filet of the Ocean’s leadership must have concluded that they faced a likely increase of at least five percent. That would be a sixteen-cents-an-hour increase.
In response, they produced their tax certificate and traded a raise of sixteen cents for a two percent raise, an increase of just six cents. If Redferd was on the ball, at the deliberations he would raise the obvious question: If they can now afford six cents, who’s to say they can’t afford sixteen cents or thirty-two cents?
