"Minimum Wage Cruelty" (4/14/10) was my column about the unemployment effects of Congress' 2007 minimum wage increase on the canning industry in American Samoa, a U.S. territory in the far Pacific Ocean. The 2007 legislation mandated 50 cents annual increases in Samoan minimum wages until it reached the U.S. mainland's hourly minimum of $7.25. In response, Chicken of the Sea International moved its operation from Samoa to a highly automated cannery plant in Lyons, Ga. That resulted in roughly 2,000 jobs lost in Samoa and a gain of 200 jobs in Georgia. Prior to minimum wage increases, Samoan wages were about $3.25 an hour. . .
StarKist, the island's remaining cannery, announced that between 600 and 800 people will be laid off over the next six months, reducing the company's Samoan workforce from a high of more than 3,000 in 2008 to less than 1,200 workers. StarKist CEO Don Binotto said it's difficult to compete when Samoan workers' wages are nearly 10 times those of its competitors in Thailand and other countries. . .
Congress can easily mandate higher wages, but they cannot mandate higher worker productivity or that employers hire a particular worker in the first place. . . . It's breathtakingly stupid to think of minimum wages as an anti-poverty tool. If it were, poverty in places such as Haiti, Ethiopia and Bangladesh could be instantly eliminated simply by proposing that these country's legislators mandate a higher minimum wage.