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Tuna by any other name is still fishy
Posted by: McQ on Monday, January 15, 2007

By now everyone and their brother should have heard of fishy deal Del Monte of San Francisco was enjoying in American Samoa as the only place in the US and its territories exempted from the new minimum wage passed by the Democratic House. Political smell aside, here are the real implications of raising the minimum wage in a economy which has, to this point, survived without it:
A quick look at American Samoan local wage rates tells us why. The current hourly minimum wage for fish canning and processing is $3.26. The minimum wage for government employees, who undoubtedly have an easier job than tuna canners, is $2.91. Shipping has the highest minimum wage, at $4.09. Garment manufacturers get the lowest, at $2.68 an hour.

Fans of minimum-wage increases say the hikes have no effect on the economy or on jobs, but American Samoans are smarter. They know that industries are going elsewhere if they have to pay $7.25 an hour. With higher unemployment in American Samoa, the American taxpayer will be called upon to come to the rescue.
In 2005, the unemployment rate, even at those wages, was 29.8%. Raising the minimum wage ought to help that, huh?

American Samoa's reaction to such a princely raise?
The governor of American Samoa, Togiola Tulafono, stated that increasing the minimum wage "would kill the economy," and the Samoan congressional delegate, Eni Faleomavaega, said that it would devastate the local tuna industry.
But hey, we all know that for this particular favorite of "progressives", the economic laws are suspended.
 
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Previous Comments to this Post 

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I’m sorry for the good people of American Samoa, but they should get the min. wage hike and if they have to suffer, so be it.

The Dems campaigned on the min wage issue, they were elected, and they should be made to implement their campaign promise accordingly. And the country can get to see the negative consequences that ensue.

Tough luck for you Samoa. You all wanted to elect Dems. Now you reap the "benefits"

Elections have consequences. Time to start learning that!
 
Written By: shark
URL: http://
Just for kicks, the WaT article mentioned that the wage hike was effective in the Northern Marianas; an island chain relatively close to Samoa with an imaginably similar economic profile. What is the current unemployment situation there? Seems like a perfect goose-gander comparison and it will be interesting to see what happens there over the next few years.
 
Written By: D
URL: http://
There’s always a silver lining: now we will finally get a shining example of what economists have been talking about as the effect of raising the minimum wage well above the prevailing wage. This time no one will be able to argue that businesses can just absorb the costs, and the consequences will be plain as day and definitely attributable to the minimum wage increase.
 
Written By: Wacky Hermit
URL: http://organicbabyfarm.blogspot.com
"..if they have to suffer, so be it."

That’s really easy to say when you’re not the guy getting laid off because his job is moving to Thailand or some other place where people work cheaper.

"You all wanted to elect Dems. Now you reap the "benefits""

Yes, American Samoa elected a Democratic representative, but he is merely a congressional delegate. He gets no vote on the issue.

Blanket motions are rarely a good idea. While I personally lean a bit right, I think this whole fiasco has just been a great opportunity for the GOP to nail the Dems to the wall and watch them squirm. This is about muckraking and not about helping individuals.
 
Written By: Joey
URL: http://
Good argument for not having a minimum anywhere. Let market forces rule. If we must have a minimum wage let it be decided by local govt.
 
Written By: Rick
URL: http://
The Northern Marianas, which per the Washington Post has a Republican representative and a similar low wage based economy as Samoa, is NOW covered under the new minimum wage rules. The Post article states that the Northern Marianas economy has a large “sweat shop” component. Low wages in both economies, but one, per the Democrats, needs the new minimum wage because it has sweat shops. Sweats shops or not, how will this help the island government and employment; oh, maybe it is not meant too.
 
Written By: AMR
URL: http://
Allow me to attempt to defend the Dems...

These places are not like Arkansas or New York state. They suffer not only from being far poorer, but are also off the beaten track so to speak, economically.

In the continental US, the minimum wage proposed is not much higher than wages already present. But in the these islands, it would be effectively doubling or tripling wages - a much more serious price hike.

Also, the cost of living in the islands is much lower than in the US mainland.



——yuck. The more I tried to figure out how to spin this, the worse it got. I think they only decent argument would be to have states handle their own minimum wages because of the same problems...living in Arkansas vs. New York City is also a big jump.


 
Written By: Harun
URL: http://
These places are not like Arkansas or New York state. They suffer not only from being far poorer, but are also off the beaten track so to speak, economically.
What do you mean? Like, they’re less developed? Or, they face higher transactions costs (e.g., shipping) when trying to take advantage of the demand in the continental 48?
In the continental US, the minimum wage proposed is not much higher than wages already present.
The present wages are less important than the real issue, which is (supply and demand) equilibrium wages. There are always jobs worth less than $X payment per hour; minimum wage laws just prohibit all jobs that are worth less to the consumer than that arbitrary limit.

The fact may be that equilibrium wages are higher in the continental US, and so a higher minimum wage will do more damage to a Pacific islander than a California teen. But it’s damaging to workers in both places for all the same reasons.
Also, the cost of living in the islands is much lower than in the US mainland.
To the extent that this is true, it could be partly due to the lower minimum wage they already enjoy.
I think they only decent argument would be to have states handle their own minimum wages because of the same problems...living in Arkansas vs. New York City is also a big jump.
Yes, abolishing the federal minimum wage would be a nice first step. The more local minimum wage laws are, the more obvious the negative impact of such laws will be, and the more people will be able to escape that impact if they choose to.
 
Written By: Bryan Pick
URL: http://www.qando.net
"The Post article states that the Northern Marianas economy has a large “sweat shop” component."

I see. Garment factories in Am. Sam. are just garment factories, while in the N. Marianas they are sweat shops. That’s what happens when you elect Republicans, good jobs at good wages turn into exploited labor in sweat shops. Or maybe the weather is warmer in the Northern Marianas?
 
Written By: timactual
URL: http://

 
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