Posted on 04/22/2010 5:40:10 AM PDT by IbJensen
Which allows an American Samoan worker to have a higher standard of living: being employed at $3.26 per hour or unemployed at a wage scheduled to annually increase by 50 cents until it reaches federally mandated wages at $7.25? You say, "Williams, that's a stupid question. Who would support people being unemployed at $7.25 an hour over being employed at $3.26 an hour?" That's precisely the outcome of Congress' 2007 increases in the minimum wage. Chicken of the Sea International moved its operation from Samoa to a highly automated cannery plant in Lyon, Georgia. That resulted in roughly 2,000 jobs lost in Samoa and a gain of 200 jobs in Georgia.
Given Samoa's low cost of living, $3.26 provided Samoan workers a higher standard of living than some of their neighbors on other islands. Now these workers are unemployed. What's worse is that Starkist, Chicken of the Sea's competitor, might leave the island as well. If that happens, increases in the minimum wage will have cost more than 8,000 jobs in Samoa's canneries and related industries; that's nearly half of its labor force. Samoan standard of living will be further reduced by the increased cost of goods it imports. Ships delivering goods from the U.S. and elsewhere to Samoa will not have as much cargo on their return trips, making shipping a costlier proposition.
Cannery jobs flourished in Samoa because of its location and it was one of the few American territories exempted from the minimum wage. Even the proposed 2007 increases in the minimum wage exempted Samoa. Since Del Monte, Starkist's parent company, is headquartered in Speaker Pelosi's San Francisco district and Chicken of the Sea is based in Southern California, Republicans had a field day suggesting that Pelosi's calling for Samoa to be exempted from the increases in the minimum wage reflected political payoffs and a conflict of interest. I thought that as well, as suggested in my May 9, 2007 column, but exempting American Samoa from minimum wage increases would have been the most compassionate act, short of minimum wage repeal.
The unemployment effect of minimum wages isn't restricted to American Samoa but to the mainland U.S. as well. Overall teenage unemployment stands at a record 25 percent while adult unemployment hovers around 10 percent. Also at a record high is the 50 percent unemployment rate among black teenage males. One might ask why teen unemployment, particularly that among black teens, is so much higher than adult unemployment. The answer is simple. One effect of a minimum wage law is that of discrimination against the employment of less-preferred workers. Within the category of less-preferred workers are those with low skills. Teens are disproportionately represented among such workers and are therefore more adversely affected by minimum wages. Black teens are disproportionately represented among teens with low skills and therefore share a greater burden of minimum wages.
One of the more insidious effects of minimum wages is that it lowers the cost of racial discrimination; in fact, minimum wage laws are one of the most effective tools in the arsenals of racists everywhere, as demonstrated by just a couple of examples. During South Africa's apartheid era, its racist unions were the major supporters of minimum wages for blacks. South Africa's Wage Board said, "The method would be to fix a minimum rate for an occupation or craft so high that no Native would likely be employed." In the U.S., in the aftermath of a strike by the Brotherhood of Locomotive Firemen, when the arbitration board decreed that blacks and whites were to be paid equal wages, the white unionists expressed their delight saying, "If this course of action is followed by the company and the incentive for employing the Negro thus removed, the strike will not have been in vain."
Tragically, minimum wages have the unquestioned support of good-hearted, well-meaning people with little understanding who become the useful idiots of charlatans, quacks and racists.
This does not just happen in Samoa....where did all the textile jobs go!!
Well, the island now has Samoa welfare clients.
When I was young and you drove into a gas station it was full service. The attendant filled my tank, checked my oil, checked air in my tires and washed my windshield all for around 25 cents a gallon or $2.50 for a fill up. Why when gas is so expensive today it is all self service.
When I was young, you could still find elevators with operators, businesses had receptionist that greeted people and took messages and the a lot of secretaries, where did all those jobs go?
If I gave it some thoughts I could think of dozens of jobs that required little skill but did provide work and a wage that are now history.
When I was young minimum wage was $2 an hour. I am not sure I was even worth that, but I only stayed with minimum wage until I learned enough to become more valuable. Within a year I was earning $6 an hour.
Minimum wages remove a lot of entry level jobs from our economy. It also encourages the development of automatic systems and self service.
Wages should be a matter between the employer and employee not the government.
Of course the welfare system distorts the labor market as well, why work when the government will take care of you?
It is a viscious circle, sort of like water going down a drain. It is not substainable and in the end will collaspe.
The fact is, when the gov’t raises the minimum wage, it forces the employer into a true dilemma: he has two choices, both bad. He has to raise prices to cover the increased costs, or he has to reduce his labor costs. The second choice is the usual option since minimum wage jobs tend to be in highly-competitive industries and raising prices is very difficult. And it is the young, unskilled, often minority worker who gets laid off.
Liberals never learn...
When I was young all our purchases were manufactured in the USA. The going was good and businesses didn’t look at a continually rising sales figure as their god.
The government bothered us but not like today where they count the sheets of toilet paper we use, design our cars including the fuels used.
Close down DC, send them home and let them vote from there. Disband 85% of the government and cancel their pensions.
The unemployment rate was 4.6% when Pelosi/Reid took control of Congress. The DOW was at 12,398, and the Federal debt was $8.7 Trillion.
Unintended consequences, or fully intended to make more folks government dependents? < /rhetorical >
Look fo this in a city near you!
So true. When you try to point this out to socialist Democrats they give you a dumb stare or some kind of psycho-babble. The Democrats do not understand Economics 101, or they choose not to, so they can stay with the leaders of their evil party.
Liberals raise labor costs and tax corporations and then complain when companies move the jobs overseas.
BINGO. The govt assaults businesses on all fronts, then when it’s campaign time, they demonize them for trying to stay in business. The end result is that they end up running American businesses out of the country, putting more people out of work and losing out on all that confiscatory taxes.
I think you are on to something. Perhaps we need a amendment that restricts congress (except for acts of war) to meeting only every other year and then for no more than six months.
Second an admendment that restrict regulatory bodies to limit what they can regulate and all regulation must have a sunset clause, perhaps ten years.
We have way too much government.
Six months is too long. Two weeks could save trillions!
California had a part time legislature until 1966 when the voters decided they wanted a full time legislature. We all know how that turned out. I think we would go along way to solving California’s problems if they went back to only meeting every two years.
Gasoline taxes. 2007 Gasoline taxes by state
Of course the welfare system distorts the labor market as well, why work when the government will take care of you?
That is the point. Happy, healthy, self-sufficient people to not want or need government and, hence, to not want or need liberals. This is about creating dependence on government and a reliable voting block for liberals who will deliver the government service that they created the need for.
Garde la Foi, mes amis! Nous nous sommes les sauveurs de la République! Maintenant et Toujours!
(Keep the Faith, my friends! We are the saviors of the Republic! Now and Forever!)
LonePalm, le Républicain du verre cassé (The Broken Glass Republican)
Ayn Rand was right.
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