– Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute. The views expressed are her own. —
As President Obama considers whether to fulfill his campaign promise to raise the minimum wage from $7.25 to $9.50 per hour by 2011, there’s no better illustration of the consequences of well-intentioned policy-making than recent events in American Samoa, a United States territory in the South Pacific that falls within the purview of Congress.
Chicken of the Sea, the tuna company, announced this month that it will close its canning plant in American Samoa in September. The culprit is 2007 legislation in Washington that gradually increased the islands’ minimum wage until it reaches $7.25 an hour in July 2009, almost double the 2007 levels.
In 2007, the hourly minimum wage in American Samoa for fish canning and processing was $3.76 and the minimum wage for government employees was $3.41. Shipping had the highest minimum wage, at $4.59. Garment manufacturers got the lowest, at $3.18 an hour. A $7.25 wage is a substantial increase for most residents.
Chicken of the Sea will lay off 2,041 employees—12 percent of total employment, almost half of all cannery workers. And the 2,700 workers at StarKist, the other American Samoa tuna canning company and Chicken of the Sea’s rival, are probably concerned that their jobs are the next to go.
American Samoa’s loss is Georgia’s gain. Chicken of the Sea will move to Lyons, Georgia, (2007 population 4,480) employing 200 people in a new $20 million plant on a more capital-intensive production line.
In January 2007 the legislation originally did not include American Samoa, perhaps because Del Monte, at the time the parent company of StarKist, was headquartered in Speaker Nancy Pelosi’s district.
Until then, the Labor Department had set wage rates in American Samoa every two years, following an extensive study on economic conditions on the island. But before final passage, Congress included American Samoa.
Back in 2007 American Samoa Governor Togiola Tulafono worried that increasing the minimum wage “would kill the economy” and Congressional Samoan Delegate Eni F.H. Faleomavaega forecast that it would devastate the local tuna industry.
They knew that industries would go elsewhere if they have to pay $7.25 an hour.
They were right. American Samoa will lose not only the 2,041 jobs at the Chicken of the Sea canning plant, but also secondary jobs from the ripple effect of loss of income—stores and eateries that cater to cannery workers, shops that mend fishing nets, shipyards, and buses that transport workers.
In a telephone conversation this week, Representative Vaito’a Hans A. Langkilde of the Ma’oputasi District #10, representing the villages of Leloaloa, Satala and Atu’u, described the prospective devastation of the community. His district is home to both StarKist and Chicken of the Sea.
Mr. Lankilde told me, “Over the past 50 years the industry provided massive job opportunities for unskilled labor. The 2007 law that increased the minimum wage was the beginning of the end for the tuna industry and the cause of massive job losses for our already fragile economy. The only way to resolve the trend towards total economic disaster is for Congress at its soonest opportunity to reverse its position.”
With the recent laying of fiber-optic cable linking American Samoa to the United States, Samoans could get jobs in call centers. Yet the higher minimum wage could discourage firms.
Raising the minimum wage to $9.50 an hour would drive even more jobs away from American Samoa. In the United States it would have the effect of shifting jobs from low-skill to high-skill workers, raising unemployment among those who are least equipped to handle it.
Rather than having to accept direction from a government thousands of miles away where they have no voting representation, residents of American Samoa should be given the power to decide on their own minimum wage. Congress should leave further minimum wage increases to individual states to choose as they see fit, because wage levels and the cost of living vary substantially between states such as Mississippi and New York.
The closure of the Chicken of the Sea cannery in American Samoa shows us that higher minimum wages cause low-skill workers to lose jobs. What’s true for American Samoa holds equally true for the United States.
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Dale,
What is amazing is not that I’m advocating for this kind of change.
What’s amazing is that even though we have the technical ability and know how to solve this problem. we continually choose not to.
And people like you who support the current financial system are the first to complain when things don’t go your way.
Is the system we have right now with everything that’s happening to working folks, really the best we’ve got?
And in truth. Wealth sharing as you mention it has NEVER been done. There have only been attempts. And since human beings don’t know how to get away from their own greed these systems fail.
Do you think our market economy is doing any better? Is this whole global financial crisis an indicator of the “success” of our current system?
You’ll have to come up with better reasons to convince me that what I suggest won’t work. We can indeed automate the treasury and federal reserve. And we do indeed have the ability and skill to carry such a plan to fruition.
Unfortunately it’s only until those people who are getting screwed actually wake up and speak, that change will occur. But it’s going to take more than accusations of fantasy, mockery if you really want to challenge my idea on its merits.
This isn’t some magical fantasy. And it goes to show just how jaded and cold people have become towards each other that you would consider the idea of another person being truly equal to you a fantasy.
Benny,
I hate to tell you this, but you are living in a magical fantasy land. There is no point in discussing some unattainable Utopian world where everyone is peaceful, loving, kind, and honest & where everyone is holding hands singing Kumbaya. That simply isn’t reality and it NEVER will be. Every single solitary time that some version of wealth sharing (socialism, marxism, communism, etc..) gov’t has been tried, it has failed miserably. The US with all of its “nasty, evil, & dirty” greed has become one of the most prosperous (and still generous) nations in the history of the world, primarily because its economy is close to free-market capitism. Though it now seems to foolishly be moving further and further away from that ultra-successful model, because of idealistic fools such as yourself (not to mention the lunatic currently ruining..err..running our country).
I think economist Walter Williams put it best in this article- http://tinyurl.com/aahwol , where he said-
“If pursuing profit is greed, economist Walter Williams told me, then greed is good, because it drives us to do many good things. “Those areas where people are motivated the most by greed are the areas that we’re the most satisfied with: supermarkets, computers, FedEx.” By contrast, areas “where people say we’re motivated by ‘caring’” — public education, public housing etc. — “are the areas of disaster in our country. . . . How much would get done,” Williams wondered, “if it all depended on human love and kindness?”
“In a free market, you get more for yourself by serving your fellow man,” said economist Williams. “You don’t have to care about him, just serve him. I’d feel sorry for New Yorkers in terms of beef. If it all depended on human love and kindness, I doubt whether you would have one cow in New York.”
By the way Benny, say hello to the elves and fairies in the magical gumdrop forest for me today when you see them…
The thing I find interesting about this is that regardless of how technically sound or unsound any of these arguments are, they all prioritize the same thing. It’s still money over human. All arguments revolve around how fixing the flow of this worthless paper will some how alleviate the real suffering of certain groups of people.
At their highest levels, each of these discussions revolves around who should get the lions share of our “limited” monetary resources. And many justifications revolve around who is, and who is not, “deserving” of this resource.
Considering that this resource is the one means by which all opportunistic and material need in this market economy may be fulfilled,
It stands to reason that empowering every individual equally would facilitate development from a human centered standpoint.
If we all have the same buying power individually, then we are all truly EQUALLY important in this society. All individuals that want to get together to solve real problems would have the means to do so if they work together. And no agency, be it commercial or governmental would ever lack for funding.
Right now we’re mostly talking about who should get what, and who gets hurt when it’s taken away.
We should never as human beings allow ourselves to be subject to something we created to help us. Banks are supposed to play a role in maintaining economic balance by lending/not lending according to certain rules. As such banks should never operate at a profit. Their role is a systemic one. And if a portion of a system suddenly acts in its own interests at the expense of the rest of the system, then the system as a whole will fail. “A house divided”?
If one thinks of a bank as heart which pumps money through the various channels of the system, then that heart cannot by virtue of its function, operate in its own interests by withholding money.
Employees may be paid to do the work of moving that money. Bank managers and presidents may be paid to maintain the smooth functioning of the bank. But profit clogs the system. If the goal is to accumulate money then a bank is no longer a bank.
In ancient times this was called usury. It was a bad idea then. It’s still a bad idea now.
Focus on the human being first and foremost. Focus on realizing the American promise of “all men are created equal” by manifesting that equality in terms that are as real as they can get.
“JK - please don’t make a rebuttal about minimum wage by quoting a site called ‘rightwingnews.com’.”
Fine, then just read the links provided on that site. You know, the ones that end in “.gov”? Or are those too “radical” for you?
When presented with a website filled with logic and facts (and supporting links) that easily destroys your weak arguments, is the best defense you have to simply mock the name of the website???
“Perhaps you are inkling that anyone who disagrees with you is ignorant?”
No, anyone who promotes liberal economic policies that have been thoroughly proven, time after time, to be ineffective at best (and completely counterproductive failures at worst) is ignorant.
“JK - Do you really think that people with money only vote GOP? I would say its mostly the opposite! Take this in consideration, both east and west coasts of the US pay the majority of the taxes (more wealth) and get the least Federal dollars coming back, and yet they both lean liberal. So your answer is factually untrue. Conservative voting strongholds tend to be away from the cities … wealth has a higher concentration in the cities.”
No offense, but your lack of critical reasoning skills is showing. In this case, you are falling for the “ecological fallacy” (link- http://tinyurl.com/auny4o ). In fact, more useful statistics “factually” show that the poor generally vote democrat and rich Republican (link- http://tinyurl.com/dxvyc9 ). Of course, economics is not the only reason people vote. For example, wealthy Jews will usually vote democrat, against their own economic self-interests, for reasons such as being against the Christians on the right. In retrospect, I should have used the wording “probably just lost a voter”, instead of being absolute.
“I just don’t believe that the free markets is a global panacea. One insight that I have that you may or may not have is that I have traveled and worked in the 3rd world … which is a completely free market in every aspect. Everything is negotiable, everything is for sale. And, the free-ness of it leads to more exploitation then it does innovation.”
Your lack of reasoning skills is showing again. The problem in those 3rd world countries is not the free market, it is the lack of laws to protect private property, coupled with corrupt governments that prevent and cripple free enterprise. And what is very troubling is the fact that the current administration is starting to lead us down that same path…
“Present history shows that both companies actually have a vested interest in keeping wages/expectations low.”
Of course they do, but that doesn’t mean they can. Professional sports teams have the same goal, but if they want to get the best players & coaches, and thus be more successful, they will have to offer more money than their competitors are offering. Same goes for employers, even for unskilled employees.
“JK - there is nothing ‘free-market’ about executive compensation. You realize that executive compensation is set by a board of trustees who are … other executives and shareholders. They tend to play pretty loose with incentives.”
What are you talking about? The boards are elected by shareholders, who have a vested interest in making money. They aren’t throwing their money at execs just for the fun of it. If they could hire the same execs for less money, you think they wouldn’t do it?
“You take issue with someone making minimum wage lobbying to get more because the government stepped in. Or a union worker making a six figure salary. I don’t think you are wrong to point out these things but why don’t you ever apply that same thought to the ‘have more’s’.”
I certainly do “apply the same thought.” Compensation should be set by the free market. Period. If the market value (based on supply & demand) of unskilled labor is $3.5/hr and for a top-performing exec is $20mil/yr, then so be it. If the market value of unskilled labor in some regions is higher, say $10/hr, then that is fine too. It is none of govt’s business, and their involvement only makes things worse (see article above).
“JK - have conservatives really gone from self-reliance to just beating on the poor retarded kids?”
I thought I made it clear earlier- I am in favor of policies that HELP the poor, not ones that hurt them, like minimum wages and welfare. And I am not talking about disabled (i.e. retarded) people. Those people obviously need gov’t assistance in some cases.
PS.
Dale — “They do not want them to rise out of poverty. They want them to keep them poor so they can keep collecting their votes. See this link (esp. the video)- http://tinyurl.com/qml6l8”
JK - please don’t make a rebuttal about minimum wage by quoting a site called ‘rightwingnews.com’. Thats like arguing that the earth is only 10 thousand years old by quoting the Bible. Or for me to refute your points by linking you to a Noam Chomsky essay or a Michael Moore movie. Radical sources don’t prove you’re right … but they do give more a lot of insight as to why you are so wrong.
Dale, thanks for your rebuttal here is my rebuttal to your rebuttal:
“This author never ceases to amaze me.”
And the ignorance of liberals never ceases to amaze me.
JK - be more specific?? Ignorance is certainly not a market liberals have cornered. Perhaps you are inkling that anyone who disagrees with you is ignorant?
“the real irony is that if you are poor and you want to be rich and you risk it all and make it big … conservatives love you.”
And the liberal dems will hate you, because they just lost a voter. Why do you think they keep promoting policies that actually HURT the poor, such as the subject at hand- minimum wage? They do not want them to rise out of poverty. They want them to keep them poor so they can keep collecting their votes. See this link (esp. the video)- http://tinyurl.com/qml6l8
JK - Do you really think that people with money only vote GOP? I would say its mostly the opposite! Take this in consideration, both east and west coasts of the US pay the majority of the taxes (more wealth) and get the least Federal dollars coming back, and yet they both lean liberal. So your answer is factually untrue. Conservative voting strongholds tend to be away from the cities … wealth has a higher concentration in the cities.
JK - I can speak personally that i really don’t want to HURT the poor through policy. I just don’t believe that the free markets is a global panacea. One insight that I have that you may or may not have is that I have traveled and worked in the 3rd world … which is a completely free market in every aspect. Everything is negotiable, everything is for sale. And, the free-ness of it leads to more exploitation then it does innovation. America has a really good balance of capitalism because we have good rules on the books preventing exploitative behaviors. So if you want more you can’t exploit you have to innovate!
“More ironically, you asked for the raise so you might feed all those children from pregnancies you couldn’t afford but they made you carry anyway.”
While I am personally not in favor of criminalizing abortion (though I am morally against it), your argument has numerous flaws. 1st, no one “made” any one get pregnant to start with. 2nd, no one “made” anyone keep a child they can’t afford to care for. The waiting list of financially capable couples who can’t conceive & want to adopt is a mile long.
JK - you are right here. I was being perhaps more ‘tongue & cheek’. But it is the old addage - the rich get richer and the poor have babies.
“I don’t think exploitation is a win-win.”
No one is putting a gun to any employee’s head to make them work. They WANT the jobs or they wouldn’t be working there.
JK - if your bar for exploitation is putting a gun to somebody’s head then I can’t relate. I think circumstances of poverty and needing to feed hungry children provides enough traction. The funny thing is that I don’t think $3.5 is a bad wage in Somoa … it might be livable? These things are very Geo specific.
“How about an honest days wage for an honest days work?”
That is exactly what they get in a free-market economy, you just don’t want to admit it because it doesn’t fit your ideals. If a group of people were TRULY underpaid, then a competitor could come in and steal them away by paying slightly higher wages & still make a good profit.
JK - perhaps with skilled labor yes … but glaringly untrue with unskilled workers. Present history shows that both companies actually have a vested interest in keeping wages/expectations low. Therefore it is more likely that they would fix wages for long term stability.
“when are you going to write an article about executive compensation”
Companies should be allowed to pay whatever they want in a free-market. If they really pay “too much”, then their competitors will eat their lunch by undercutting their profits and put them out of business. Free-market discipline is ruthlessly efficient.
JK - there is nothing ‘free-market’ about executive compensation. You realize that executive compensation is set by a board of trustees who are … other executives and shareholders. They tend to play pretty loose with incentives.
JK- at the end of the day I guess i’m weary of conservative thinking. You take issue with someone making minimum wage lobbying to get more because the government stepped in. Or a union worker making a six figure salary. I don’t think you are wrong to point out these things but why don’t you ever apply that same thought to the ‘have more’s’. You talk a lot about traditional values, well in the ‘good-ole-days’ top executive compensation was about 40x that of the average worker. In todays wages thats about $1.6 million. However, now, executive compensation averages 250x that of the workers. So the dude whose salary has grown 700% (and that figure is adjusted for inflation) is bemoaning about the poor grunt in Somoa who wants his $3.5 an hour job to adjust for inflation too.
JK - have conservatives really gone from self-reliance to just beating on the poor retarded kids?
This is just the same old, and I mean OLD, excuse that conservatives, Republicans, and business wonks have ALWAYS used to complain about the minimum wage. But some how, just some how, the country always moves ahead even AFTER an increase in the minimum wage. Industry doesn’t collapse, healthy businesses don’t fail, and the sky doesn’t fall. As for the impact in “secondary” or “collateral” markets. $3.50 per hour spent by two wager earners is the same a $7.00 per hour spent by one wage earner - the difference in the net effect is marginal. Besides, business and industry ALWAYS adapt to higher wages (e.g. My PARENTS lived on $7.00 a WEEK when they got married in 1941. I’d say the economy has done better since then and hasn’t collapsed. . . well, at least NOT because of higher wages). Higher wages are not the problem. However, the so-called “experts”, whom I’m sure Diana Furchtgott-Roth considers herself to be, have driven the GLOBAL Economy to disaster. The economy in American Samoa will be just fine. Other, and most likely, BETTER industries will replace the “slave labor” jobs and conditions that the tuna industry provided (Have you ever been to a cannery? NOT a great place to work!). American Samoa’s loss is Georgia’s . . . well, let’s face it. It’s Georgia’s loss too.
To Michael
The cannery in Somoa employed 2000 people at $3.5 an hour, sooooo $3.5 x 2000 = $7000 an hour . If you couldn’t remember the actual number from the article maybe you don’t have the mental capacity to be writing in this section and debating since facts escape you only a few moments after reading them.
It matters not where the cannery is built, the minimum wage in America’s territories is being raised to the $7.55 level. The new cannery uses newer equipment, thus reducing the work force to 200, from 2000, a difference of 1800 people. SOoooo 200 x $7.55 = $1450 per hour. $7000 - $1450 = $5550 in savings, per hour.
Now, $7.55 x 40(hours) = $302 a week before taxes! only $1208 a MONTH! and this number is before taxes are taken out. How much is a monthly house payment on a $150,000 home on a 30 year term with a (extraordinary) 5% per year is $805.23 a month at Bankrate.com
What happened to the days when bosses and business in general gave Christmas bonuses? What happened to those days when a Businessman, or a Banker, had a sense of patriotism, a sense of loyalty, a sense of civic duty to America and their fellow citizens? What happened to that class all business school students must take called Ethics 101?
The move of the cannery from Somoa to Georgia had absolutely nothing to do with minimum wage, moving to Georgia immediately bumped the wage up to the 6 dollar range, no, the real reason is simply business as usual. The company knew it would get grief from the locals and local government if it reduced the cannery work force from 2000 to 200. It would be better to just pack up and leave a cannery I doubt anyone will buy and use to employ anyone. The company saved money building the cannery in Georgia because i’m sure Georgia gave tax breaks as an incentive, plus shipping material to build the cannery would be cheaper over land as opposed to the sea.
It was a great Business decision. But the greater questions; is what is good for business good for America, its economy, its environment, its government, and its people?
Consider the following video if you are wondering if the “powers that be” are attempting to retain control of the system. As soon as a very important point was being made, the person making it was interupted and the subject was changed.
http://www.foxnews.com/video/index.html? playerId=videolandingpage&streamingForma t=FLASH&referralObject=5036977&referralP laylistId=playlist
Consider this “dirty” idea of equal distribution of wealth. We’ve been taught that it’s not a good idea based on the argument that it would reward the few people who actually do the work and that the rest of society would simply lay idle collecting money for doing nothing.
This idea assumes that you as a person are intellectually incapable of deciding for yourself just what it is you’d like to do with your life. It also makes the assumption that what ever you choose to do with your life will be a waste of resources because you don’t have the intelligence to carry it out. Is this how you as a working person see yourself? If you didn’t have to worry about having a steady income, would return to your 9 to 5? Or would you find something to do with your life that puts your best talents to use?
If everyone had their own individual stream of income based on national GDP, wouldn’t that give the government and business minded people an incentive to invest in the education and development of every citizen? After all, if every citizen has equal buying power then every citizen counts and is an important member of society. Now investment in human potential becomes central to our national development. We would truly be a country of free citizens. It would also help control illegal immigration because only citizens would be entitled to an equal share in GDP. Which means if you’re hear illegally you can still make a living but it would be under the older employer/employee relationship. This would give immigrants an incentive do what ever they need to do to meet the qualifications of becoming a citizen and contributing to the common good.
Also with everyone sharing equally in wealth, businesses would not need the hassles of investment banks to raise capital for their enterprises. There would be no need for complex financial instruments. All they would need is enough people who share the same goal to contribute a small portion of their incomes to the effort. This gives every worker a vested interest in the company. And if a person decides to leave the company that person still has their own income stream to see them through. Without the bind of profit, people of skill and know how, can do what they do best, and raise the quality of life for everyone around them. People can focus on being respected. Being known for the good they have done.
Think about prisons. We would still have criminals to be sure. But with each one having their own income, they can pay for their own incarceration and maintenance. Correctional facilities can finally, truly focus on correction, instead of just warehousing people in cages.
Think about hospitals, schools, clinics, police forces, and fire brigades. All self sufficient. Requiring only willing human participants which automatically bring the financing needed.
Our social structure would change dramatically, and there would certainly be some new dynamics in place. But it seems to me that any reasonable person would consider this ideological direction to have a great deal of merit over the current system.
Michael sorry about misspelling your name in the last post.
Micheal, in response to your question.
“Sir will you please explain to me how and why it is you feel and think that the wages I work for should go to someone who is unwilling to work? I don’t like people or Government stealing that which I have worked for. In this case a fair wage. Your comments that everyone should benefit from our collective prosperity. Sir there is no collective prosperity unless you take from the producers and give to the non-producers. Sorry, but socialism and Marxism do not work. Look at the Soviet Union for example. No one has the right to take what I earn and redistribute it to others. Plain and simple that is THEFT!”
Sir. The reason I feel as I do Is because I do not regard money as anything more than a medium of exchange. The ideas expressed in your question reflect the level of conditioning we have all been brought up with since childhood.
Fore example your statement of “I don’t like people or Government stealing that which I have worked for.”
That’s my point. Why are you working for money? What dreams did you give up in your life? What skills did you have to let wither and die in order to develop the skills needed to be “where the money is”? Are you living the life you always dreamed you would? Are you having the kind of impact in peoples lives that gives you a sense of fulfillment and personal value? These are the most important questions to ask. Because in the end no one cares how much money you make. It’s about who you’ve touched and what kind of mark you’ve left on the world.
The only reason your money is important to you is because you wouldn’t be able to live a comfortable life without it. But comfort is not the purpose of living. You have a mind. You have skills. You have the ability to be creative and produce things that benefit everyone. But instead your masters teach you the “how” “of getting things done” so that YOU can do it. While the people that own everything you work on and for, get to live their lives as they please, unhindered by lack of money. As you would be if you stopped working.
Not everyone values money in this way. And to be sure those people who have made the great technological advances in our society didn’t care about money as a medium of control the way the rest of society does. They only cared about money in terms of being able to live in society. If you don’t have to spend all of your time chasing the money you need to purchase your needs and wants, you can actually focus on helping your fellow man without bothering with financial considerations.
Imagine what a skilled doctor could do if he/she didn’t have to worry about the patient having the money to pay. Imagine how much red tape gets cut out of real problems when the profit factor is removed.
No human being is supposed to work FOR money. Money is suppose to SERVE US in our pursuits. We are intelligent enough creatures to figure out how to do this while benefiting everyone. The idea here is a fundamental shift in thinking. If one works for excellence in ones chosen field as opposed to profit, then the money would still be there to help someone else develop their own excellence. One should work to produce RESULTS. Money is not results.
And please understand that we already take from the producers and give to the non-producers. Producers are the working class. They get taxed to the brink of poverty. The non-producers are the owners. They evade taxation and get lots of help from the government to do it. The only thing they “produce”, is more work for YOU to do FOR THEM.
First to CD Walker,
Check your math. 3.5 x 200 = 700 not 7000. Being such the company will actually spend twice (x2) as much 1450 than they do under the current system. Thus costing them 750 and hour not saving them the over 5500 you claim.
Second to Mr Acosta,
Sir will you please explain to me how and why it is you feel and think that the wages I work for should go to someone who is unwilling to work? I don’t like people or Government stealing that which I have worked for. In this case a fair wage. Your comments that everyone should benefit from our collective prosperity. Sir there is no collective prosperity unless you take from the producers and give to the non-producers. Sorry, but socialism and Marxism do not work. Look at the Soviet Union for example. No one has the right to take what I earn and redistribute it to others. Plain and simple that is THEFT! Giving to those who don’t produce will only lead to a lack of desire to produce. If I get 3,000 for not working and 3,000 for working why work? If I don’t work nothing is produced. Common prosperity and the GDP of this Nation is now 0 and the 3,000 I get each month is only useful as toilet paper. (Please interpret the previous I as the people of this Nation.)
http://americansamoa.gov/news08/Letter-t o-US-Senator-Inouye.pdf
Another interesting reading and no talk of minimum wage here.
Translating the bs into English:
Corporations were shipping jobs from the mainland US to Samoa to avoid paying minimum wage. When Congress stopped them from doing that, they stopped shipping some of those jobs there.
Replying to May 18th, 2009 10:56 pm GMT - Posted by Dale
There are no saints on either side of employer-employee relations. However, there are inumerable examples of employer exploitation in the american past that need to be constantly reminded to the present generation like the infamous scrip or the Ludlow massacre of April 20th, 1914. Given half a chance, many US companies will fall back to the times when it was possible for them to pay their workers with credit-only for use at the company store. It is really hard to leave the place you work for when debt will be haunting you everywhere you go, whether it’s in the mainland USA or the far away islands of the Pacific.
Being paid between $2.75/hour and $4.50/hour when living in US territory should be unnacceptable anyway: the islands are of extreme strategic importance - both commercially and militarily - and have been highly profitable any way you see it. The islanders who speak English have kept a good degree of american culture-style living and with it help assert American proprietoryship over the territory. They’re in far better shape than their Western Samoa’s counterpart and they know it. But still, it needs A LOT of improvement. One can argue that the chronic mismanagement has sunk many millions of dollars into the islands, and perhaps it’s a good thing for American Samoa that the canneries leave the island, after all: they’ve lobbied to maintain a cheap workforce for a long time. Those companies get tremendous tax breaks as it is and that’s why one of them settled in Georgia. They’re given money to be there by government, so in the end, the paltry salaries are paid, not by the canneries, but by the government, in my opinion. If companies have grown accustomed to tax breaks and other government perks to keep their operations in the state, then I think their business model is flawed to begin with and deserves to fail. Private entrepreneurship shouldn’t be asking for government handouts to make a profit. Either way, the number of people dependent on state and government assistance will not have diminished: very low wages still keep employees dependent on assistance.
I’m of the opinion that the commercial viability of the islands is very dependent on the laws governing sea and air shipping. If those laws have changed to benefit imports from abroad, it may very well have dented the ability for A. Samoa to make a profit out of traditional industries such as fishing and canning. It’s going to be interesting digging through some of it, out of curiosity. That is one positive thing brought about Roth-Furchtgott’s opinions, and I thank the author for it.
The Times.com has some very interesting articles about American Samoa that range from the early 20th century to today.
Here’s a writer who regards Venezuela as our enemy. This isn’t an objective article, it’s slanted around an ideology. Where is the comparison to other island nations in the Pacific? How are they doing with exploitation?
I don’t think this issue is quite as simple as this writer would have you believe. If industries paid workers their true worth, instead of exploiting them for maximum profit and indefensible administrative salaries, there probably wouldn’t be a need for minimum wage laws. Neither do large, disproportionate income disparities make for strong economies and societies.
What holds true for Samoa doesn’t automatically apply to the U.S., which has a much broader economy, so the author’s statement is verifiably false. Nor does this example ipso facto condemn minimum wage laws, but it does suggest we need to be careful how they are applied.
And I hope that there are young readers reading these posts. This is mostly for your generation. Take a good look at the system you are about to enter into. Yours are the next generation of butts the politicians will start kissing and business is sucking up to.
If you’re in your early to mid 20’s. Seriously consider the preceding posts. They speak to your future. Think about it carefully before you get too enmeshed in this financial system. Consider what direction you want YOUR country to move in. And make your voices known. Or those of mine and my parents generation will keep doing the same dumb crap.
Dale,
You make the argument that no one is putting a gun to to the people of Samoa to make them work there. They are obviously working there because they want the jobs.
And on the surface that seems like a logical argument. But the Samoan islands don’t really have much in the way of resources, and unless those people wish to continue living in their traditional manner, they will need money in order to buy the modern conveniences in life.
The only way to get this money is (A). Go into business for yourself, and (B) Get a job. You can also turn to crime if you don’t have any moral problems with it.
Do the Samoans have an educational system that teaches the concepts of entrepreneurship and basic finance? If they have no access to the know how to open a businesses then that leaves getting a job or turning to crime.
Do the Samoans REALY have a choice when it comes to working in the canneries? Not really. Most Samoans have probably lost a lot of the skills needed for living in the old ways. Money is survival. Paying employees just enough to pay their bills and keep them coming back to work for more, is basically slavery.
In the mainland we have highly educated slaves to be sure. But as long as you HAVE TO go to work, you are a slave.
Think about it this way. How do you want your children to live? Do you want your sons and daughters to have to spend the best years of their lives chasing after money? Perhaps your child has the cure for AIDS, Cancer, or the secret to free energy locked in their little minds. But because they aren’t free from the domination of this financial system, those gifts, insights, skills, and advances will never be known. Think abortion is bad? How about watching the gifts and talents of your children wither and die before your eyes as educational institutions who need to produce good “workers” drug your children because their “over active imaginations” “disrupt the class”. Watch their potential be stomped out as they are processed in an “educational” system that teaches them the “reality” that getting a good job is the only way to make a “success” of themselves. Consider how an assembly line works and you will see many parallels in our public school systems.
Do you want the “success” of your children to be viewed simply in monetary terms. Or would you rather have your children recognized for the gifts and talents they naturally have and were assisted in cultivating to such high levels?
Government and businesses downplay arts and humanities in education while emphasizing math and science. The arts and humanities produce thinkers. Governments and businesses both HATE thinkers. Thinkers are the ones that ask questions like “even though we can do something, does it mean we should?” And while such voices do exist in this place, there are not nearly enough of us.
So far pro-business arguments have been angry in their tone, but have not answered the question of human exploitation. They have argued that this is a complex issue but have not answered the question of why such complexity should result in human suffering when the system in trouble involves an asset which has no real value.
They can’t answer the question of why the only thing in this system that actually has value (the citizen), is the one being tossed aside at the expense of paper that has no worth in and of itself? Pro-business and pro-money arguments are unable to answer these questions meaningfully because they place no real value on the human being. You are just a means. You are to be enslaved for the sake of achieving and end. And the end is money for the sake of money.