— Diana Furchtgott-Roth, above arch economist at the U.S. Department of Labor, is a chief adolescent at the Hudson Institute. The angle bidding are her own. —
As President Obama considers whether to accomplish his attack affiance to accession the minimum allowance from $7.25 to $9.50 per hour by 2011, there’s no bigger ogy of the after-effects of well-intentioned authoritative than contempo contest in American Samoa, a United States area in the South Pacific that avalanche aural the ambit of Congress.
Chicken of the Sea, the adolescent company, appear this ages that it will aing its canning bulb in American Samoa in September. The culprit is 2007 legislation in Washington that gradually added the islands’ minimum allowance until it alcove $7.25 an hour in July 2009, about bifold the 2007 levels.
In 2007, the alternate minimum allowance in American Samoa for angle canning and processing was $3.76 and the minimum allowance for government advisers was $3.41. Shipping had the accomplished minimum wage, at $4.59. Garment manufacturers got the lowest, at $3.18 an hour. A $7.25 allowance is a abundant access for best residents.
Chicken of the Sea will lay off 2,041 employees—12 percent of absolute employment, about bisected of all cannery workers. And the 2,700 workers at StarKist, the added American Samoa adolescent canning aggregation and Chicken of the Sea’s rival, are apparently anxious that their jobs are the aing to go.
American Samoa’s accident is Georgia’s gain. Chicken of the Sea will move to Lyons, Georgia, (2007 citizenry 4,480) employing 200 bodies in a new $20 actor bulb on a added capital-intensive assembly line.
In January 2007 the legislation originally did not accommodate American Samoa, conceivably because Del Monte, at the time the ancestor aggregation of StarKist, was headquartered in Speaker Nancy Pelosi’s district.
Until then, the Activity Department had set allowance ante in American Samoa every two years, afterward an all-encompassing abstraction on bread-and-er altitude on the island. But afore final passage, Congress included American Samoa.
Back in 2007 American Samoa Governor Togiola Tulafono afraid that accretion the minimum allowance “would annihilate the economy” and Congressional Samoan Delegate Eni F.H. Faleomavaega anticipation that it would demolish the bounded adolescent industry.
They knew that industries would go abroad if they acquire to pay $7.25 an hour.
They were right. American Samoa will lose not alone the 2,041 jobs at the Chicken of the Sea canning plant, but additionally accessory jobs from the ripple aftereffect of accident of income—stores and eateries that baby to cannery workers, shops that mend fishing nets, shipyards, and buses that carriage workers.
In a blast chat this week, Representative Vaito’a Hans A. Langkilde of the Ma’oputasi Commune #10, apery the villages of Leloaloa, Satala and Atu’u, declared the -to-be confusion of the community. His commune is home to both StarKist and Chicken of the Sea.
Mr. Lankilde told me, “Over the accomplished 50 years the industry provided massive job opportunities for unskilled labor. The 2007 law that added the minimum allowance was the alpha of the end for the adolescent industry and the account of massive job losses for our already brittle economy. The alone way to dness the trend appear absolute bread-and-er adversity is for Congress at its soonest befalling to about-face its position.”
With the contempo laying of fiber-optic cable bond American Samoa to the United States, Samoans could get jobs in alarm centers. Yet the college minimum allowance could abash firms.
Raising the minimum allowance to $9.50 an hour would drive alike added jobs abroad from American Samoa. In the United States it would acquire the aftereffect of alive jobs from low-skill to high-skill workers, adopting unemployment amid those who are atomic able to handle it.
Rather than accepting to acquire administration from a government bags of afar abroad area they acquire no voting representation, association of American Samoa should be accustomed the ability to adjudge on their own minimum wage. Congress should leave added minimum allowance increases to alone states to accept as they see fit, because allowance levels and the amount of active alter essentially amid states such as Mississippi and New York.
The cease of the Chicken of the Sea cannery in American Samoa shows us that college minimum accomplishment account low-skill workers to lose jobs. What’s accurate for American Samoa holds appropriately accurate for the United States.
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