NCPA - National Center for Policy Analysis


January 16, 2007

Economists of every political stripe agree that a higher minimum wage will cost some low-skill workers their jobs, says the Wall Street Journal.

Even Speaker Nancy Pelosi seems to understand this.  Despite leading efforts to pass minimum wage increases, she granted a reprieve to American Samoa, which has a big fish and tuna canning industry, specifically operations run by StarKist and Chicken of the Sea.  Both companies are headquartered in California, and StarKist's parent is located in none other than Speaker Pelosi's own San Francisco district.  Democrats rediscovered the eternal economic truth that a higher minimum wage can cost jobs and granted Samoa its reprieve:

  • In 2004, according to the Department of Labor, Samoan canneries directly employed some 4,800 people, or nearly 40 percent of the work force.
  • StarKist and Chicken of the Sea would have plenty of other low-wage locations to do their canning; the average hourly wage for the American Samoan canneries in 2004 was about $3.60.
  • In contrast, the average cannery wage in Thailand was 67 cents an hour and in the Philippines 66 cents.

You don't have to go as far as American Samoa to discover other liberals who understand this -- at least when they do the hiring, says the Journal:

  • In 1995, the union-financed lobby, Acorn, sued California seeking exemption from the state's then-$4.25 minimum wage.
  • Acorn argued in its court brief that the more they must pay each individual outreach worker -- either because of minimum wage or overtime requirements -- the fewer outreach workers it will be able to hire.

None of this insight will do American Samoa much good, however.  Red-faced after her tuna surprise was discovered, Speaker Pelosi announced that she was to re-examine whether the bill also should apply to the Pacific island. 

Source: Editorial, "Pelosi's Tuna Surprise," Wall Street Journal, January 16, 2007.

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