Wed 17 Jan 2007
As part of the much bally-hooed “first 100 hours” (which appears to be measured on a broken clock), we found out that one of the first bills to be pushed through the new Democratic-controlled Congress would be to increase the minimum wage, from $5.15 to $7.25 per hour.
The Washington Times first reported that while other U.S. territories such as the Northern Mariana Islands would be included in the proposed legislation, American Samoa would be exempted from the minimum wage increase. It was first noted in that paper that one of the biggest opponents of increasing the minimum wage is Samoa is StarKist Tuna, employer to 75% of the island’s residents. It was also noted that StarKist’s parent company, Del Monte, is headquartered in San Francisco, which is coincidentally Ms. Pelosi’s district.
From there, many people raised much ado and made many snarky comments about the loophole, and implications that its presence was due to Del Monte lobbying which influenced Pelosi to make an exemption just for them.
Now I don’t know whether anyone at StarKist or Del Monte ever really discussed this with Ms. Pelosi (something she’s denied). And I certainly am not normally in the business of defending her. But while the Democrats can be blamed for a lot of things, I don’t think this is really a discussion over earmarks.
What prompted me to even write about this was yesterday’s Townhall.com article by Rich Galen. In dissecting this situation, he jumps to an interesting (but dangerous) conclusion:
That leads us to two points:
1. This is what happens when you shove major legislation through the House without proper committee hearings and minority party participation. How do we know this? Because the DEMOCRATS COMPLAINED ABOUT IT FOR 12 YEARS!
2. Unless Nancy Pelosi has hired the Oompa Loompas from Willy Wonka’s chocolate factory to write legislation, it strains credulity that the bill drafters were unaware of the effect this was going to have on a major corporation headquartered in the Speakers’ district.
Tuna packers on American Samoa are, on their own, not crucial to the health of the US economy. However, this episode shows that the Democrats are a long way from cleaning up abuses of privilege in the House.
The very issue on which they ran and won.
I’m sorry, but the exemption’s existance neither proves reckless favoritism championed by Ms. Pelosi nor amateurish legislation writing.
I personally don’t believe that the bill was crafted in order to provide an intentional loophole for a Pelosi-friendly company. Period. Maybe some evidence will surface which proves this point of view wrong, but until then, I think focusing on Del Monte’s connection with Nancy Pelosi is just misleading.
But, unfortunately, the response to the accusations is equally as silly: as the Democrats now pledge to extend federal minimum wage to all U.S. territories. Loophole closed.
But is anyone asking the real question? Why did American Samoa have a different minimum wage set in the first place?
You see, American Samoa was excluded from the legislation because it was not mentioned. The previous U.S. minimum wage law did not apply to them. So it shouldn’t have been a surprise that they would not have been included in an increase to said wage. This practice neither originated with this Congress nor with Ms. Pelosi.
But apart from these semantics, you can see the real problem that Democrats themselves do not want to admit. The reason that they are pushing through a miniimum wage increase is supposedly to “help” people. Specifically, to force an increase in pay to those who are currently earning only the minimum wage and, supposedly, provide them a better opportunity to care for themselves and their families. Sure, there are some who will see that $2.10 per hour (before taxes) in their paycheck and the Democrats want them to know who to thank.
But what does raising the minimum wage really do? American Samoa actually provides a great laboratory to see the effects. When the cost of labor goes up, some people lose their jobs. You see, contrary to the opinions of the anti-capitalist protestors, businesses don’t actually print cash and hoarde it away. Nothing is for free. So when the government forces an increase in labor costs, it requires the business to either (a) raise the prices it charges for its goods and services in order to pass on the increase, (b) reduce the amount of profit or increase the amount of loss generated by the business, or (c) reduce the number of employees in order to hold the labor costs stable.
American Samoa shows us this very well. As the wages go up, so will the unemployment, because the economy there is so reliant on these businesses. In fact, not only will some small number be affected, many more may become unemployed if the tuna packing businesses there decide to relocate. As Samoan Rep. Eni Faleomavaega states:
“The truth is the global tuna industry is so competitive that it is no longer possible for the federal government to demand mainland minimum wage rates for American Samoa without causing the collapse of our economy and making us welfare wards of the federal government.”
Instead of addressing accusations of favoritism by applying the minimum wage laws to American Samoa, we should instead be asking why in the world we are meddling with their economy this way. “Helping families” by raising the minimum wage could end up putting many more families completely out of a job. Even a low-paying job is better than none at all!
And while we’re at it… let’s ask ourselves why we in the world we’re even still tweaking the minimum wage law anywhere – including for the mainland USA? By any standards, we are not dealing with the same conditions of poverty that faced the population during the Great Depression. And any time those in government get the bright idea of mandating that private industry fund their latest vote-buying initiatives (whether it’s raising the minimum wage, requiring businesses to pay for health insurance, or the like), they must understand the consequences, since none of this comes for free.
Those are better questions for Republicans to be asking, not whether Pelosi knows that Del Monte is located in her district.
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