Impact of Increased Minimum Wages on the Economies of American Samoa and the Commonwealth of the Northern Mariana Islands

Section 2. American Samoa

American Samoa, the only U.S. territory south of the equator, lies 2,300 miles south of Hawaii and 1,600 miles northeast of New Zealand.  American Samoa consists of seven islands which together make up 76.1 square miles of land (48,767 acres).  The largest island, Tutuila, constitutes 70 percent of total land area and is home to 90 percent of the population.  Pago Pago on Tutuila is the seat of the American Samoa Government and the site of one of the Pacific’s great natural harbors.[2]

The high volcanic islands of American Samoa have rugged interiors mostly covered with rain forests.  Some of the smaller islands exhibit unique geological formations.  The north side of Tutuila and parts of the two outer islands, Tau and Ofu, make up an ecosystem considered so suitable a candidate for preservation that in 1988 the U.S. National Park Service identified it as the newest addition to the U.S. national park system.

Location of the Samoan Islands in the path of the southwest trade winds means frequent rains and a tropical climate.  Year-round temperatures range from 70 to 90 degrees depending on the warmth of the surrounding ocean.  Humidity averages about 80 percent throughout the year and rainfall averages 200 inches, with a December-March heavy rainy season.  Frequent rain results in lush vegetation on most of the islands.

The mountainous terrain and heavy annual rainfall have important implications for agriculture and the domestic food supply.  The soil of the slopes is thin as a result of leaching and can only support jungle vegetation.  The soil in the valleys and on the plains is fertile and suitable for growing tropical fruits and vegetables, but commercial agricultural development has been constrained by the scarce supply of level land for which there are many competing uses. 

The largest area of level land is located on the Tafuna Plain on Tutuila, near the American Samoa International Airport.  This is also the area that is most suitable for the development of housing and industry.  It is likely that further development of industry, including tourism and with it any need to expand the airport to accommodate wide-bodied aircraft, will increase the industrial demand for land around the airport.  Such developments would place commercial agricultural production at a serious disadvantage in terms of return to landowners.

Level land on the island of Tau, a part of which is included in the National Park of American Samoa, is somewhat far from the commercial markets in Pago Pago and is not used for commercial agriculture.  As a result, most agricultural production is for home consumption.  Of the 1,126 farms in American Samoa in 1990, 88 percent produced solely for subsistence.  The most common crop is the taro root, followed by bananas, breadfruit, and coconuts.  Fish are abundant in Samoan waters, but most meat and a number of other foods are imported, as is generally the case in the American-affiliated Pacific Islands.

As a small group in the Samoan Archipelago, the seven islands of American Samoa had no history distinct from that of the western islands of Samoa until the end of the 19th century.  European traders began to call at Samoan ports around 1800, and some began to settle in the islands in the early 1800s.  The first missionaries settled in 1830.  By the late 1800s, internal strife among the chiefs and power struggles among major powers of Germany, Britain and the United States led to a period of instability in Samoa.  In 1899, after the signing of a treaty by the three major powers, Germany annexed western Samoa (now Independent State of Samoa).  The eastern islands (American Samoa) were ceded to the United States the following year.

When the United States acquired American Samoa in 1900, its interest in the eastern end of the Samoan archipelago was mainly military.  Pago Pago harbor, one of the deepest natural harbors in the South Pacific, was seen to be of value in the early part of the century as a coaling station for American ships.  As a result, the territory was placed under the U.S. Navy which controlled access to it and appointed its governor until 1951.  An Executive Order transferred authority over the territory to the Department of the Interior in 1951, paving the way to civilian rule and self-government.

In 1960, a constitution drafted by the American Samoan people and approved by the Department of the Interior established a government resembling that of a U.S. state.  Until 1977, the governor and lieutenant governor were appointed by the Secretary of the Interior.  American Samoan voters elected their first governor and lieutenant governor in November 1977.

American Samoa is an unincorporated and unorganized territory of the United States, so that not all provisions of the U.S. Constitution apply in the territory.  Residents of American Samoa are not U.S. citizens.  Rather, they are U.S. nationals, who can freely enter the United States and work and reside anywhere they choose.  Legislation passed by the U.S. Congress recently subjected American Samoa’s minimum wage rules to national standards, with provisions for a gradual increase in the minimum wage rate until it equals the U.S. minimum at the end of a multi-year period.  But American Samoa retains control over its immigration, and entry to American Samoa by foreigners is not entry into the United States (in contrast to Guam, for example, where U.S. immigration laws apply).  Goods produced in American Samoa may be exported to the United States duty-free, provided minimum standards of local labor content are met.

Demography

The population of American Samoa is estimated to be 68,200 (July 2007).[3]  The population increased by 13,200 between 1997 and 2007 – an increase of 24 percent over the decade.  Population growth has largely been the result of natural increase.  The population is quite young, on average. The median age was 21.3 years according to the 2000 Census, and 38.7 percent of the population was younger than 15 years of age.[4]  Applying this proportion to the 2007 estimated population total suggests a current population of 26,393 under age 15 and 41,807 ages 15 or older.  

Immigrants are a significant factor in the demographics of American Samoa.  According to the 2000 Census, the population age 15 and older (35,079) was comprised of 39.1 percent native born American Samoans and 60.9 percent were individuals born elsewhere.[5]   The majority of non-native American Samoans are migrants from the neighboring islands of the Independent State of Samoa to the west.  Despite the large proportion of immigrants in the total population, American Samoa reported net out-migration of 4,993 during the decade of the 1990s. 

This demographic pattern (net out-migration combined with a large immigrant population) may reflect, in part, the fact that native born American Samoans have the right (as U.S. nationals) to migrate to the U.S.  Thus, the inward migration from the Western Samoa islands and from elsewhere is more than offset by migration of native-born American Samoans to the United States.  The relatively high fertility rates of the remaining native and the immigrant populations offset the net out-migration of native adults and contribute toward positive population growth of more than 2 percent per year.  It is estimated by informed observers that approximately half of native-born American Samoans now live in the United States, primarily in Hawaii and California.[6]

Economic Structure and Conditions

Timely and detailed economic information about American Samoa is scarce.  In recent years, the American Samoa Government (ASG) has attempted to compile economic and labor force statistics, but estimates are generally available 12 months or more after the close of the calendar year.  American Samoa is included in the decennial U.S. Census and in the quinquennial Economic Censuses, conducted in every year ending in “2” and “7.”

One important source of information on the American Samoan economy and the labor market has been the biennial surveys conducted by the U.S. Department of Labor’s Employment Standards Administration (Wage and Hour Division) which have looked at the economy in relation to industry wage rates applicable in American Samoa under the Fair Labor Standards Act (FLSA).[7]  These surveys were conducted in support of the biennial special industry committee process that previously made recommendations to set and adjust industry-specific minimum wages in American Samoa.  Passage of P.L. 110-28 in 2007 replaced the minimum wage industry committee process with a fixed schedule of increases that will bring the minimum wages across all industries into uniformity and conformity with the U.S. minimum wage of $7.25.  Consequently, the biennial labor market surveys will no longer be conducted. 

American Samoa is not included in the annual American Community Survey (ACS) conducted by the U.S. Census, nor is it included in the monthly CPS conducted by the U.S. Census, nor in the Current Employment Statistics program surveys conducted monthly by the U.S. Bureau of Labor Statistics.  No monthly or quarterly economic or labor market surveys are conducted by the American Samoa government.  The lack of an unemployment insurance system in American Samoa further limits the availability of timely information on conditions and changing trends affecting the labor market.

American Samoa is a small developing economy, dependent on two primary externally funded income sources: ASG, which receives significant operational and capital grants from the Federal government ($117 million of $182 million total government revenue in FY 2005[8]), and the two tuna canneries (operated by StarKist, a subsidiary of Del Monte, and by Chicken of the Sea, a subsidiary of Thai Union Frozen Products of Bangkok) on the main island of Tutuila.  Tuna exports in 2006 totaled 20.7 million cases (about 147 thousand tons) valued at $431.5 million.[9]  Taxes and fees paid by the tuna canneries are another significant source of revenue for the government.  These two primary income sources support a third economic sector, a services sector that derives from and complements the first two. 

In 2006, total employment in American Samoa was 17,395, little changed from 17,344 persons in 2005.[10]  The American Samoa government accounted for 5,894 workers, or 33.9 percent of total employment, followed by the two canneries with 4,757 workers, or 27.3 percent, and the rest of the economy with 6,744 workers, or 38.8 percent of total employment. 

Data from the Census 2000 showed the labor force to be 17,627 and the number of employed persons to be 16,718 – implying an unemployment rate of 5.2 percent.  By comparison, the comparable U.S. unemployment rate as derived from the Census 2000 was 5.8 percent in 2000.[11]   Data on the labor force and unemployment rate in American Samoa for more recent years are not available.[12]

American Samoa’s major export is canned tuna.  Other manufacturing and industrial assembly is limited.  A large proportion of the territory’s workforce (in the case of the canneries as much as 90 percent) is from the western islands of the Independent State of Samoa and other neighboring countries.[13]  But while it is true that Samoans from the Independent State of Samoa working in the territory are legally alien workers, they are in fact no different than the American Samoans by culture, by history and by family ties.

The services segment of the economy, aside from government services and canneries, is mostly trade, both wholesale and retail.  The opening a decade ago of the first big box retailer, Cost U Less, brought “wholesale retailing” to American Samoa, and a Hawaii-based operator brought the territory its first movie theatre.

Economic Significance of the American Samoa government (ASG)

The government is American Samoa’s single largest employer.  In 2006, the 5,894 government workers accounted for 33.9 percent of total employment in American Samoa.  ASG is a unitary government with no local or municipal government sublevels.  As such, it is highly centralized and performs all basic government functions.  Aside from the usual government work, ASG also manages power, water and sewer systems through the American Samoa Power Authority (ASPA).

In FY 2005, the government reported revenues of $182.0 million and expenditures of $192.0 million.  U.S. Federal grants and assistance accounted for 64 percent of revenue.  Local revenue collection totaled $63.6 million.  The largest categories of government expenditure were “Health, Welfare, Education and Culture,” at $65.9 million, “General Government,” at $45.6 million, and “Health and Recreation,” at $31.9 million.

In 2006, the government sector minimum wage increased to $2.91 per hour.  The wage survey that year (in preparation for the planned 2007 special industry committee) showed that, among government sector workers covered by the FLSA, less than 1 percent earned at the minimum rate and 10 percent earned at or below $4.05 per hour.[14]  Among government workers covered by the FLSA, 34 percent earned no more than $5.15 per hour and 48 percent earned no more than $6.15 per hour.  The average hourly wage of covered government sector workers in 2006 was $7.49 per hour, and the average annual earnings of government workers were $28,351.

 Table 1 shows that the scheduled minimum wage increases mandated by P.L. 110-28 will bring the minimum wage for covered ASG workers to $7.25 per hour by 2015.  Paying for the increases in government worker minimum wages will present a significant challenge to ASG.  While available data are insufficient to make an exact computation, the fact that 48 percent of covered government workers earned less than or equal to $6.15 per hour prior to the scheduled minimum wage increase suggests that at least half of covered government employees will be affected by the time that the adjustment schedule reaches $7.25 per hour.  Based on the 2006 wage survey, 1,293 covered government employees who previously earned no more than $5.25 per hour will be entitled to hourly increases of $2.00 or more.  Assuming 2,000 hours of work per year for full-time workers, these increases imply at least $5.2 million per year in increased wage costs for ASG.  Wage increases attributed to government employees earning between $5.25 and $7.25 per hour before the first wage increase could result in an additional $2 million or more in annual wage costs when the full increase schedule takes effect.  These increases may force ASG to make difficult choices between reducing government payrolls, reducing available hours of paid work, raising taxes or cutting non-wage expenditures. 

Table 1 shows that the scheduled fifty-cent per year minimum wage increases will bring the  Finance and Insurance industry, the Petroleum Marketing industry, and the three sectors of the Shipping and Transportation industry into conformity with the U.S. minimum wage in 2013. All industries except Garment Manufacturing (which currently has no workers in this category) and the Miscellaneous category will reach parity with the U.S. minimum wage by 2014.

A Large Proportion of Workers Will Be Affected by Minimum Wage Increases

The proportion of total workers who will be affected by the scheduled minimum wage increases is a consideration for assessing the likelihood of negative employment effects either in terms of job elimination or reductions in normal paid hours.  The 2006 wage survey suggested that 10,195 (58.8 percent) of American Samoa’s 17,344 workers were covered by the FLSA and potentially subject to minimum wage provisions.  Overall, covered workers in 2006 had average hourly earnings of $5.26 per hour – almost $2.00 per hour less than the $7.25 per hour minimum wage scheduled to become effective over the next five years.  Raising the average hourly wages by nearly $2.00 per hour for the 10,195 covered workers could result in an increased wage bill of $40 million per year across all American Samoa industry sectors.  Based on the $120 million annual payroll across all American Samoa industries reported by the 2002 Economic Census, this would represent a 33 percent increase in wage costs.[15]  General economic experience suggests that it is not likely that such an increase in wages could be absorbed through increased productivity, reduced profits, or higher prices passed along to consumers. 

Table 2 shows the proportions of covered workers in each industry who earned no more than a specified amount based on the 2006 wage survey.  In each case, the specified cut-off amount is less than $7.25 per hour.  Altogether, 7,856 covered workers (77.8 percent) earned less than $7.25 per hour and so will be entitled to an increase as the minimum wage in American Samoa increases to $7.25 per hour.  In order to sweep within its direct effect a proportion similar to the 77.8 percent of

workers affected by the American Samoa minimum wage increase schedule, the U.S. minimum wage would need to be raised to more than $16.50 per hour.[16]

Tuna Processing

American Samoa’s exclusive economic zone does not encompass the great migratory routes of the Pacific tuna, but the excellence of the harbor at Pago Pago has given the territory a natural advantage in landing fish for processing.  In addition to the unique attributes of the harbor and the applicability of a lower minimum wage, three special provisions of U.S. law formed the basis for tuna processing, American Samoa’s largest private industry, now more than 50 years old:  (1) the territory is exempt from the Nicholson Act which prohibits foreign ships from landing their catches in U.S. ports; (2) American Samoan products with less than 50 percent market value from foreign sources enter the United States duty-free (General Note 3(a) of the U.S. Tariff Schedule); and (3) the parent companies of American Samoa’s fish processing plants have enjoyed special tax benefits. 

The tuna industry throughout the Pacific is in flux, and its future in American Samoa is widely believed to depend on a continued mix of duty-free status, special tax benefits, and other credits and a viable wage rate, as well as on continued use of the harbor by fishing vessels taking their catches in other parts of the ocean.  Changing requirements for landing of catch by other Pacific island-states could mean fewer fish for the American Samoan canneries.   Regional and global trade rules involving the United States also have the potential effect of altering the financial arrangements under which the canneries operate.  Moreover, low labor costs in most of Central America and Asia make for serious pressure from foreign competition.

Since 1955, the tuna canning industry in American Samoa has not been subject to the standard U.S. minimum wage established under the FLSA.  Instead, minimum wages unique to American Samoa have been set based on recommendations of biennial industry committees.  The latest committee (2005) set the minimum wage for the tuna processing industry at $3.26 per hour (unchanged since 2001).  By comparison, the U.S. minimum wage was $5.15 during the same period, was raised to $5.85 per hour on July 24, 2007, and is scheduled to rise to $6.55 as of July 24, 2008 and $7.25 per hour as of July 24, 2009.  Under the terms of P.L. 110-28, the minimum wage applicable to the tuna canning industry in American Samoa increased to $3.76 per hour on July 24, 2007 and will increase in fifty cent increments each May 25 thereafter until parity with the U.S. minimum wage of $7.25 per hour is reached. 

A recent study of the American Samoa economy and of the impact of the tuna industry on American Samoa found that growth of the tuna processing industry has been the primary driver of economic growth and stability for the islands over the past thirty years:

Between 1975 and 2005, fish processing increased its workforce by 3,246.  This was nearly three times the 1,103 jobs added in government and the authorities because of increased federal support.  In 2005, the canneries accounted for 26.2 percent of total employment, while employment in government and the authorities supported by federal grants accounted for 18.9 percent.[17]

The study, conducted by McPhee and Associates, also pointed out the concern that increasing minimum wages could result in closure of the tuna canneries:

But legislated increases in the minimum wage could erode the competitiveness of the tuna canneries, one of the mainstays of the island economy.  If the fish processing industry were forced to shut down, the damage to the American Samoa economy would be severe and widespread.[18]

Table 3 summarizes the growth of the structure of the American Samoa economy described in the McPhee and Associates report.  Over the past 30 years, direct employment growth in the fish processing industry has accounted for 34.3 percent of total job growth.   In recent years, however, growth in the canning operation has slowed as new types of tuna packaging have gained market share.

Potential Employment Impact of Closure of the American Samoa Tuna Canneries

As this report is being prepared, the two tuna canneries in American Samoa continue in operation.  Neither plant has reduced output or working hours in immediate response to the first fifty-cent increase in the minimum wage, although both companies have stated that they may do so in the future.[20]  Despite the lack of immediate effects, there appears to be genuine cause for concern that, at some point before the escalation to $7.25 per hour is reached, the rising minimum wage combined with other factors may lead to the closing of both canneries in American Samoa. 

For both companies, profitability is marginal. Del Monte, the owner of the StarKist cannery, reported disappointing overall corporate performance for the third quarter of 2007, and in the discussion of financial results, the corporate CEO referenced poor profitability of the seafood business line as a contributing factor.[21]  In response to questions regarding whether the initial fifty-cent increase in the minimum wage had contributed to any change in absenteeism or turnover costs, industry representatives presented absenteeism records showing no change in absenteeism from a year ago.

Exhibit 1 shows the structure of tuna processing costs for the American Samoa canneries.[22]  The largest component of the cost of product shipped from American Samoa is the fish itself, ranging from 40 percent to 70 percent of cost, depending on the type of fish being processed.  Labor ranges from 7 percent to 14 percent of cost.  Industry representatives claim that the increase of the minimum wage from the $3.26 per hour rate effective prior to July 24, 2007 to the $7.25 per hour rate (a 2.2 times increase) would more than double current labor costs for their facility (where most workers are now paid at the existing minimum wage rate) and would more than erase the current profit margin.

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When asked how quickly a decision could be implemented to transfer production to tuna canning facilities elsewhere, one industry spokesman replied, “Minutes.”  It was explained that his and other companies already outsource significant production to Thailand and to South American countries (both for the U. S. market and for other countries).  The industry representative stated that there are forty canneries in Thailand, and that nothing would have to be built or moved.  To implement a production transfer, the companies would simply place more orders with existing plants.  Reference was made to the fact that there is excess processing capacity worldwide in the tuna canning industry.[23]  It has been reported that the world tuna processing has an excess of production capacity on the order of 20 to 40 percent.[24] 

Research reports have highlighted the vulnerability for the past decade of the American Samoa tuna processing industry to competition from Thailand, South American countries, New Guinea and other low cost producers.[25]  Under the North American Free Trade Agreement, tuna canned in Mexico has tariff-free access to the U.S. market as of January 1, 2008.  The shorter transportation route and lower labor costs expected from Mexico will further challenge the viability of the American Samoa tuna processing industry. 

Both tuna processing companies reported that the growth in the tuna products market is now focused on the sealed foil packages of tuna or tuna-based entrees rather than the traditional canned tuna.  Both companies reported in separate interviews that canned tuna demand is highly price sensitive:  The product was described as a “commodity” with little or no brand loyalty. 

The McPhee and Associates report prepared for the American Samoa Department of Commerce updated estimates of input-output model parameters describing the impact on the overall economy of changes in basic industry sectors.  Basic industry sectors are the components of a local economic region that produce goods and services for export to other economies.  The tuna processing industry is the primary private sector industry in the American Samoa economy.  In addition to the direct employment effect of this industry and the resulting income provided by the tuna processing industry, this basic sector has an indirect multiplier effect on other sectors as a result of workers spending income generated in the basic sector.  The total economic impact of the sector is the sum of its direct and indirect effects.  Table 4 presents the results in terms of direct and total economic impacts of the tuna processing industry on the economy of American Samoa. 

The McPhee and Associates analysis of input-output model data derived an implicit multiplier effect of 1.47.  This means that every job added to or subtracted from the economy by a change in employment in the tuna processing industry adds or subtracts another 0.47 jobs from other sectors of the economy.   The model predicts that closure of the two canneries would eliminate in total 7,825 jobs from the American Samoa economy.  This impact would amount to elimination of 44 percent of all employment in American Samoa.  The remaining economy would depend almost exclusively on transfers from the U.S. Federal government to provide basic sector infusion of purchasing power to the economy.[26]

The input-output model does not take into account the fact that electricity prices and shipping costs for the tuna industry are, in effect, subsidized because of the arrival of cargo ships, which bring fuel and other goods to the islands and take processed tuna.  Closure of the canneries would increase the cost of importing fuel (for electrical generation and other uses) and other goods.[27]

[2] Descriptive information in this section was provided by U.S. Department of Interior, Office of Insular Affairs, December 2007.

[3] American Samoa Department of Commerce, http://www.asdoc.info/.

[4] Census 2000 American Samoa Summary File.  Data also are available in the Statistical Yearbook 2006 published by the American Samoa Department of Commerce.  See page 4.

[5] Census 2000 American Samoa Summary File.  Data also are available in the Statistical Yearbook 2006 published by the American Samoa Department of Commerce.  See page 1 and Table 1.16.

[6] Based on interviews conducted for this report.

[7] Former Section 8 of the FLSA (29 U.S.C. §208), which was deleted by P.L. 110-28, set forth the procedures for the biennial industry committee and the process by which the committee made recommendations to the Secretary of Labor on industry wage rates.

[8] American Samoa Department of Commerce, Statistical Yearbook 2006, p. 135.

[9] Information provided by American Samoa Department of Commerce.

[10] American Samoa Department of Commerce, Statistical Yearbook 2006, p. 138.

[11] The official unemployment rate for the United States is estimated from the Current Population Survey and was 4.0 percent in 2000.  The differences between the 5.8 percent estimate derived from the Census 2000 and the official 4.0 percent figure derived from the CPS reflect conceptual and methodological differences between the two programs.  For a general discussion of these differences, see www.bls.gov/lau/censusdiff.htm.

[12] The Economic Report prepared for the 2007 special industry committee cites labor force for 2005 as 17,344, but cites no estimate for employment (U.S. Department of Labor, Economic Report: The Minimum Wage in American Samoa, 2007, Washington: May 2007, p. 14, Table IIB).  The American Samoa Department of Commerce, Statistical Yearbook, 2006, cites total employment of 17,344 for 2005 (p. 138).  Only if all labor force participants were employed (implying 0.0 percent unemployment in 2005) could both citations be accurate.

[13] Based on interviews conducted with industry representative for this report.

[14] U.S. Department of Labor, Economic Report: The Minimum Wage in American Samoa, 2007, Washington: May 2007, p. 112.

[15] A Census Bureau reviewer noted that this analysis combined data from the 2002 Economic Census with data from other sources.  The use of multiple data sources may affect the precision of the estimates 33 percent increase in wage costs; nonetheless, the actual increase in wage costs would be considerable.

[16] The data reflect analysis by the Office of the Assistant Secretary for Policy of unpublished tabulations from the Bureau of Labor Statistics of hourly earning of employed wage and salary workers in the U.S. who are paid hourly rates for 2006 (annual averages).  Among 76.5 million workers across both private and public sectors, 75 percent earned less than or equal to $16.50 per hour, and 90 percent earned less than or equal to $23.40 per hour.  The median (50^th percentile) was $11.75 per hour.  The BLS tabulation found that 10 percent of this category of U.S. workers earned less than $7.00 per hour in 2006.  The category of workers tabulated by BLS corresponds closely with the group of workers covered by the FLSA minimum wage provisions.

[17] From a forthcoming report prepared for the Department of Commerce, American Samoa government by Malcolm D. McPhee & Assoc. (with Dick Conway and Lewis Wolman),  "American Samoa's Economic Future and the Cannery Industry" (Funded by: The U.S. Department of the Interior, Office of Insular Affairs), p. 3.

[18] Ibid., p. 1.

[19] Ibid., p. 3.

[20] Based on interviews conducted with industry representatives for this report.

[21] Based on interviews conducted for this report.

[22] The exhibit was prepared and provided by an industry representative.

[23] Based on interviews conducted with industry representatives for this report.

[24] See statement at http://www.house.gov/list/press/as00_faleomavaega/eniwtcstatement.html which cites a 40 percent excess capacity.  Interviews with company representatives mentioned a 20 to 40 percent excess. 

[25] Michael Hamnett and William Pintz, “The Contribution of Tuna Fishing and Transshipment to the Economies of American Samoa, the Commonwealth of the Northern Mariana Islands and Guam,” University of Hawaii Institute for Marine and Atmospheric Research, Pelagic Fisheries Research Program, 1996, p. 3.

[26] The full report by McPhee and Associates is expected to be published in late January 2008.

[27] Based on interviews conducted for this report.

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