text:
Thousands lose jobs due to higher federal minimum wage
— 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.
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Our laws impose a huge penalty to our businesses who would otherwise prefer to locate their workforce on US soil because we refuse to apply them to our offshore competition. $9.50 per hour sends the clear message: Get Out Now! Now, just think, who benefits from this?
You are right—why should the "low-skill" workers of the United States suffer the burden of unemployment? How pitiless that from them we try to embezzle the dream of such lavishness as food and shelter with the suggestion of a living wage. That they are paid at all reflects our nation's failure to acknowledge the irrelevance of those whose profession involves actual work. After all, why should anyone care that, had wages kept pace with rising productivity from 1968, the average hourly wage would be $18.23?
This woman is so obviously biased in her "opinion". She fails to mention that the new 20 million dollar plant is going to be state of the art and only employ 200 people compared to the 2000+ people employed in American Somoa.
It is obvious to me that the company was going to move the operation anyway, as soon as a new cannery was finished. Chicken of the Sea's corporate move has absolutely nothing to do with the mandated wage increases. In mainland America the minimum wage is higher than that of the Island of American Somoa and everything to do with being able to reduce the work force to 10% of what was needed to run the "Old and outdated" cannery on the Island. Moving to mainland America should also cut its shipping fees, thus reducing overhead to maximize profits while the reduction in workforce will also reduce the amount needed to be set aside for benefits, social security, and taxes.
The move by Chicken of the Sea is based entirely on completing a newer facility with modern equipment while moving closer to consumers to reduce transportation costs. If this is her type of "opinion" piece, I wonder if she even grasps the concepts of newer business models.
Your argument has one massive flaw:
'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.'
So they have $20 million dollars to spend on setting up a new factory, and I'm sure there's additional costs to be considered in that move. Why? Because paying 2041 people an extra $3.49/hr is too costly. How much will the workers in the new factory be paid? How much more could they afford to pay these poorly paid people by cutting the wages of top executives by even 5%? This to me smacks of an inauthentic reason to avoid having to pay the poorest people a livable wage. The other factor to be considered is how much the cost of living went up during this time. $7.50/hr isn't enough to live off of and certainly not enough to live comfortably off of.
Diana, how can you illustrate such a lack of logic? First, the move from A. Samoa to Georgia changed nothing in salary. As you stated they moved into a new automated facility that could be run by 200 bodies verses 2000 bodies in A. Samoa. This facility had to be planned far in advance and obviously without regard for minimum wage effects. How you could use this as some sort of reason not to increase minimum wage leads me to wonder what motivates your opinion pieces.
So the alternative is what? Paying people a salary that will garuntee that they are on social services? I suppose that is a great use of tax payer dollars, to subsidize businesses for their lack of responsibility toward their workers. I would suggest that the writer take a minimum wage job and see if she is able to survive. Perhaps than she might actually grow some empathy and compassion towards those who work in low wage jobs, but are unable to escape poverty. I doubt the writer will survive such an experiment in hardship. Placing corporate profits on the predication that workers have to be condemed to a lifetime of poverty is not only unfair, but it is immoral. We should stop calling ourselves the "greatest nation on earth" if we cannot provide hard working men and women a working wage. That should not be happening in the richest nation on the planet.
Where are the facts (both positions)?
When did the planning for this new facility start?
When did construction start?
Is GA giving the company tax breaks?
How much money do most people live on in American Samoa?
Is it possible that the company knowing the wage increase was coming decide to bail?
Is everyone living in poverty there since the highest wage is $4.59/hour?
People that don't live there shouldn't be commenting on what an acceptable wage is. Maybe they aren't the pigs we are in the mainland and can live happily without iPods, SUVs and $100/month cell phone & cable TV plans.
The minimum wage debate will continue on and on. In the short term it raises wages for the workers at the bottom, but in the long term they are not any further ahead than they were at the lower wage. Do you remember when you could get a hamburger at McDonalds for sixty nine cents back in the late 90's. Now, you can get them for a one dollar. As wages are artificially increased, so do the costs of everything else. More people earning more money means that in the short term more people buy more things. As time goes on, businesses have to pass the increased costs to consumers. Consumers then buy what they used to buy before the wages were increased. I know that a minimum wage increase is not the only thing that raises costs, but wages are the largest expense that most businesses have.
Also, to answer the question as to how much the company would save by moving to Georgia, here are the figures. 1800 fewer employees working 26 80 hour pay periods at an increased rate of 3 dollars per hour.
1800 * (26 * (80 * 3)). The savings is $11,232,000 in wages payable alone without including the savings for any health care benefits that may have been paid. Also, a new facility requires less maintenance and is more up to date as far as food safety and codes are concerned. Also, by acquiring a brand new facility, the company will likely be able to take advantage of the tax and income effects that the newfound plant depreciation will give them for several years to come.
As far as CEO and executive pay is concerned, how much is enough? Shouldn't we all make as much as we can? If my farm grows more fruit and my herds grow faster than someone elses, shouldn't I be able to eat more? If I own the land and work it and help it to produce, shouldn't I enjoy the harvest? If I take the risk, shouldn't I be able to enjoy the reward?
Ideas such as these are at the root of the crisis that we are all in. They betray a complete inability to see the greater picture, the interconnections that make up the economic system. Or worse, they are the expression of a propaganda machine trying to legitimize an economic model that is extremely destructive, both socially and ecologically.
It was "planned" because the minimum wage was going up. This 2009 increase was part of 2007 legislation.
So, instead of 2000 Samoans having a job that pays $3.50, they now have no job, which pays $0.00.
This helps poverty, how, exactly? If they couldn't "live" on $3.50, they could quit. Now the choice isn't theirs.
Let's just make the minimum wage one hundred dollars an hour and we'll all be rich. What's wrong with that? You can't simply "give" people a wage. The best possible outcome of a minimum wage is simple inflation that makes the increased salaries worthless. The typical outcome is that automation and general economic decline will cause massive unemployment.
Besides the economic illiteracy regarding the minimum wage, this tuna example just shows how racist the minimum wage is.
USA is going down the drain. This is economic genocide against your own people. Support the people/help the people to be prosperous. Anyway: easier said than done. If buying any kind of small item is so difficult when you are poor in USA how can USA call itself developed. People milking a goat in Greece are far less stressed than civilized homeless,jobless americans. Sorry for the negativity.
Diana, I understand that you are paid to write these biased opinions, but this time is completely nonsense and laughable. Exactly the same ignorant economic reasoning brought the Republican party to its current reality :)
What does the minimum wage law matter anyway? When there are no real consequences for hiring illegal immigrant labor and paying them under the table, who cares what the official minimum wage is?
Attempts to smooth out the bumps in the road often backfire.
No matter what you were taught you in school, it's a jungle out there, and failure is always an option. Stop blaiming "them" for not looking out for your best interests.
I've never been given a job or a hand up by a bleeding heart. Life is made up of those who will use you for their own interests and those who are think they have the right to tell you what to do.
I quit school in the 10th grade and entered the work place with a job paying $40 a week for 6 twelve hour shifts. This was when weekly wages were exempt from minimum wage controls. Moving onto an hourly job at .90 cents, current minimum wage, equaled a considerable raise at the time. I continued on moving from job to job that payed higer wages. I have neer belonged to a union, as I see this as an artifical support for deadbeats. Minimum wages should be set for each State individually, as only they are aware of living expenses in their area. Raising the wages in A. Somao to what it may take to live in the U.S. solves nothing of benifit to the locals who are lurched out of a job when the business relocates. Get our Government out of trying to control everyone's lives, as they can't even manage the basic Government functions without wasting tax dollars.
The harmful effects of higher wages? well…aren't you the popular one.
I guess we should change the minimum wage to $1.50 an hour then. If you poor people don't like it, well then just quit! Greedy poor people, trying to make a living wage. When will people learn that it should be what the corporations want to pay us, not what we need to get by on without handouts and Federal aid! Big Business is more important than the working poor.
My firm actually is forced to pay not minimum wages but a legally mandated rate for government work called Davis/Bacon. New rates were just handed out for a new round of contracts that increase the hourly rate for skilled labor by more than half. Has there been a 50% inflation since last year. Obviously not. This is a union sponsored effort to grab some of the wasteful government stimulus spending. Fair enough, but, in reality, none of this will happen. to win the contracts a company has to be competitive and so THEIR prices cannot increase. As a result, they CANNOT afford to pay these greedy legally mandated rates and stay in business. Instead, every minute not spent doing the nominal work category will be paid at any lower applicable rate as long as consistent with the law (bathroom breaks at minimum wage, walking to the job at laborer rates, travel to the job at minimum wage, there is no law that says you have to be paid the same amount every minute you work…you get the picture) and everyone, worker, bookkeeper, will have to spend much more time complying with the requirement by filling in forms. No one will make any more except the union bosses. it will be a complete waste of more time instead of productive expenditure. thats what you get with having your government run your life…a life lived at the Department of Motor Vehicles.
The minimum wage issue is very emotional to some people but Diana's point is well taken. The company had two years to weigh the cost of continuing to employ 2,041 unskilled workers at $30,000,000 wages a year wages plus benefits or spend $20,000,000 for a new plant and employ 200 skilled workers at $4,000,000 to $5,000,000 wages plus benefits. This is a savings to the company of at least $5,000,000 the first year of operating the new plant even after paying for the new plant.
The compassion for the unskilled workers needs to be shown by Congress, they know that they are putting unskilled workers out of work every time they raise minimum wage. The point is, if congress cared about poor people they wouldn't make it so profitable to hire skilled workers over unskilled workers.
Most workers only work for minimum wage while they are building their skills or until they can increase their income. Those that are unable to acquire skills need to be considered before congress raises minimum wage because they are the ones that loose when minimum wage goes up. Skilled workers don't stay at low wages very long anyway.
…and, of course, no discussion of the role of corporate remuneration, golden parachutes and excessive shares/options for the board, the necessity of having ridiculous profits (due, amongst other things, to the thousands of mom/pop shareholders with their fingers in the pie via superannuation), the thirty year trend toward ever greater profits despite wage stagnation and rising living costs, a general corporate culture of tax avoidance, secret offshore bank accounts… but no, let's not talk about that. Let's punish labour and let big capital off the hook.
The entire American lifestyle depends on a near-infinite supply of cheap labor. Does anyone realize that if their Plasma Screen televisions were manufactured in a fair-wages situation, they would not be able to afford such devices? Americans need to wake up and realize that the rest of the world is not their personal valet.
I see just as much bias in the comments as in the commentary. Businesses must make money to stay in business by competing with companies all over the world, not just in the U.S.
They are not in business to provide jobs or benefits. Any community or region relying on one company or industry will fail at the moment that industry or company is undercut by better technology, either in production or in product.
Also, a one industry community sells it population short since it creates a have and have-not society, even at minimum wage. You have a job, or you don't. Diversity in industry provides competition and choice in the workforce, which forces companies to pay competitive wages. This is much more effective than artificial wage standards which always result in less competitive and less efficient business practices, which leads to failure.
In a diverse economy, if a company takes advantage of its workers, they leave for higher ground and the company changes its ways or goes away. It is quite simple.
In A. Samoa's case, if they thought they had it made riding on Pelosi's skirt tails, they just learned a very valuable, albeit painful, lesson. The canneries very well may have left anyway, but the minimum wage made it a very easy decision that the governing body of Samoa had no power to negotiate for themselves. Had they broadened their base of industry, this would still be painful but not devastating. This is the same situation as the auto industry in Michigan where I spent many years. If there is no consideration of business costs in social/economic policy, the businesses will be driven out and you be left crying in your soup at the shelter.
Responding to jb's comment about average wage following the rise in productivity: According to http://www.bls.gov/news.release/empsit.t 16.htm, the average hourly wage is about $18.50 for the first few months this year – slightly above your suggested $18.23.
Raul, your comments, if not meant to satirical, are so devoid of empathy as to be truly frightening. You ask "Shouldn't we all make as much as we can?" The answer if you or other like-minded beings care, is NO! Utopia does not exist, but we will never approach anything like compassion if we choose to simply ignore anyone who is less fortunate. Greed can be disguied in innumerable masks, but it inevitably springs from an attitude of not caring. Unfortunately, during my life I have never learned how to convince a person to care about something, short of their experiencing some type of personal catastrophe which opens their eyes to the condition of the rest of humankind.
It is a disingenuous and myopic idea to suppose that a living wage is the cause of poverty. Businesses will always pass along any increased cost that they are able to; if they can't, then they go looking for a population that is so mired in poverty that they have no choice but to accept whatever is offered to them. It's a simple concept; it's what is known as exploitation, and unscrupulous and greedy businesses have been doing it for decades. Of course, as long as the world is mired in the zero sum 'game' known as 'competition', things will not change. The question seems to me to be why the 'winners' think that the 'losers' will simply go away or magically disappear from the planet. One of the very legitimate purposes of government, at least in my opinion, is to do whatever it can to regulate greed and assist the losers. It's not very Darwinian, I realize, but I believe that if there is any hope of extricating the disadvantaged from lives of misery and hopelessness, we all must one day realize that we're all in this together. Greed will ultimately destroy everyone, not just the poor.
Besides the inflationary effect of a minimum wage rise that will give temporary relief to low income workers, it should be quite carefully adapted to expecially sensitive geagraphical areas like the Samoa Islands. For them, a low wage is better than no wage for sure. On a greater scale, in order to be competitive with low wages in other countries, a carefully concerted approach to taxation, productivity and labor cost should be considered. e.g. in the USA corporations pay too much taxes compared to Singapore, for example.
Looks like this article got spammed by Obama's Welfare Nation who believe that people go into business to provide them with a job and not to get a return on the money THEY invested and accepting the risk of losing that investment.
Not to worry though, these leeches now have Obama in power and if any business isn't will to pay them $100 an hour, sell the product for 1.99 and take a loss for the "greater good", then Obama will just take it away from the business anyway and give it to his Welfare Nation.
And these brainiacs can't understand why the unemployment rate is going above 10% and no one is spending or providing investments or capital. These people are how we end of with a "community organizer" taking control and trying to run the auto, banking and insurance industries to a complete failure.
[…] raise to $7.25 has already lost jobs as employers say unskilled people aren't worth that […]
this move is good for the samoan's….packing tuna in a factory is god awful…now they will have more free time to live in tranquility on their beautiful island.
Your Chicken of the Sea example does not support your argument. They are moving $7.25/hour jobs to Georgia, which has the same $7.25/hour minimum wage. Obviously, the wage hike had little to do with their decision.
why do so called experts who make high 5,6,7 and even 8 figure salaries want people who do not have to endure low wages?
I have a BS degree and I only make $13.99 an hour on a job that I've had since 2003!!!!!!!!!!!!! I live in Chicago.
It isn't fair!!!! Gov, Mayor, and Cook County Commish are taxing us unfairly.
We should always have the right to repeal unfair increases…especially during a recession!
Oh by the way…they increase their salaries without the voters approval. Should'nt we??
Soylent green is the answer.
How dare that Obama, He wants min wage to pay above the poverty line.Next thing he'll want something craze like health care for all.
Dale writes–
"Diversity in industry provides competition and choice in the workforce, which forces companies to pay competitive wages. This is much more effective than artificial wage standards which always result in less competitive and less efficient business practices, which leads to failure."
What you have stated is a very broad and generalized conclusion, which to be discussed effectively would mean conducting valid research into a broad sampling of data for support. For example, does 'diversity' itself actually cause competition so that employers will be forced to pay higher wages? The answer, I suspect, depends to a great extent on the industries, their geographic location, their relative market dominance, and many other factors. There have no doubt been many instances in our economic history where diversity has not produced upward wage pressures, just as there are probably examples where it has. If that is the case, then it becomes necessary to closely examine the contradictory examples to determine if 'diversity' is actually the driving or predominant force or reason for upward wage pressure. It may well be other factors that have nothing to do with 'diversity'. Of course, it seems a truism that competition cannot exist without at least some 'diversity', but that is not a critical analysis that would suport a generalization that diversity always leads to increased wages, or that it is a better vehicle to use than government regulation. It seems to me that your statement presupposes that there is a relatively small workforce for those 'diverse' employers to call on. For me, it has been my experience that as long as there is a relatively large available workforce, there will be little, if any, upward wage pressure, no matter how 'diverse' an economy may be.
Wow – so the minimum wage laws are different, and employers in American Samoa pay more than employers in Georgia?
No, of course they don't. Diana conveniently ignores the fact that the minimum wage is a federal law, and that Chicken of the Sea will have to pay the same wage in Georgia, because that destroys her argument that it's the big bad Democrats who are putting these poor people out of work.
Its plain old American greed, something Diana chooses to defend surreptitiously instead of with honesty and integrity.
The reason rich people want to push minimum wage is because they want to preserve their wealth. Her argument is completely wrong because low wages create the walmart effect where the communities and the gov't have to subsidize their expenses through welfare programs. I love the example of the $100 wage. Scare tactics by extremes. Please read the 7 methods of propaganda before reading any article or listening to anyone with an opinion about politics or business.
Professor Alan Krueger has already taken the time to prove Mrs. Furchtgott-Roth wrong, and over 16 years ago.
To quote from an article published in the New York Times on August 22, 1993,
"Their studies of the minimum wage have attracted the most attention. Classic economics assumes that a higher minimum puts more money in the pockets of some low-wage workers, but forces others out of work, dismissed by companies who cannot afford to pay them. Professors Card and Krueger decided to test that when New Jersey, in the middle of a recession, raised the minimum wage in the state to more than $5.05 — 80 cents higher than neighboring Pennsylvania
They surveyed 400 fast food restaurants and found that those in New Jersey actually added 2.5 workers after the minimum wage went up. In Pennsylvania restaurants, meanwhile, payrolls shrank."
I wonder how the author of this blog will react to actual evidence and hard facts.
[…] Furchtgott-Roth, former chief economist in the Bush Labor Department, provides an update on how the raising of the minimum wage has been a job killer in American Samoa: As President Obama […]
Without getting into the political dimension of this, it should be recognized that running a business on a remote island (ignoring labor) is more expensive than running the same business on land. Electricity, clean water, parts, supplies, etc. all cost more. If the plant is older and has a lower level of industrial sophistication (and is less efficient) than a new facility, the only way to make the island factory cost competitive is cheaper labor. Raise the labor rates to the same level as the mainland and it will make sense to invest new capital on shore since the island labor advantage is gone. 7 dollar labor on an island is not the same as 7 dollar labor in Georgia and the wisdom of investing capital in each is also not equal.
People should be able to sell their labor at a rate that makes sense in the real economic system where everyone has competition.
Take her words with a pinch of salt, folks. This was what she said about the likelihood of a recession in 2008 when her buddies, the Republicans, were in power:
"On balance, it is not likely that the United States will experience a recession in 2008."
http://www.american.com/archive/2007/dec ember-12-07/the-great-recession-of-2008
Hold it people. Please note: 2041 people will lose their job. And only 200 people will get one. That is only 10% of the jobs lost. Have any of you even thought about that factor. I want a pay raise too, but this dose not add up as being the way to do it.
Diana Furchtgott-Roth misleads readers repeatedly in this article. This is ALL SPIN. Shame on the author. I will not trust anything by Diana Furchtgott-Roth in the future.
A living wage is a fair wage where people can afford a roof over their head and food..it is the very least of the American dream. Homelessness is a huge issue for the working poor..
For those who say the US can't compete if the minimum wage is raised, I disagree. The US can compete if people are well educated and have skills for the 21st century. Education is key to everything and it is there that the US is falling behind. Obama gets it.
I wonder if anyone has ever thought about the thousands of jobs lost when executives are paid astronomical sums.
Please stop allowing this woman to submit articles. Consistently short sighted and self serving.
I really hope the day comes when the educated middle and lower classed effectively coordinate a boycott of all large corporate products and services. Then tell me how giving these hard working individuals a raise would not benefit the economy.
How is it that in my lifetime my basic cable and phone bills have never gone down? Progress huh? Particularly as we move away from expensive outdated wired infrastructures.
"In a diverse economy, if a company takes advantage of its workers, they leave for higher ground and the company changes its ways or goes away. It is quite simple." …..tell that to the folk in Michigan…you think they only make cars there apparently.
Yes you socialist brainiacs, the minimum wage is the same in Samoa as Georgia, but perhaps you should read more carefully that the Samoans are unskilled, as opposed to the Georgia workers being skilled in a high tech processing plant — therefore having greater PRODUCTIVITY for the same wage, a concept which evades big government, bureaucrats, big unions, and most minimum wage advocates. The point missed by the minimum wage brain-trust is that they are HARMING the most vulnerable members of society in their self-righteous crusade to raise wages above free market value by causing unemployment. Further, the cost of that unemployment is now an additional cost to government, paid with more taxes. Good grief!
RE prior comment on a New Jersey – Pennsylvania study. It has long been DISCREDITED as laughable pseudo-science due to NJ big labor which indexed their wages against the increase in minimum. This had NOTHING to do with the well being of the minimum wage earner and everything to do with the stranglehold labor has on NJ. It wasnt the min wage guys driving the fast food business – it was the indexed, big union, high wage guys. What a farce.
Yes, the rest of the world is not our personal valet, and neither is the USA the welfare State to the world.
Outsourcing jobs have put too many people out of work here, and government sticking their noses in everyone's business sure isn't helping either.
One doesn't need every new gadget that comes out, especially if it has cost a US citizen their job, by having them made in another country.
With government policies, greed, & envy running rampant now, we will end up losing more jobs, and soon we will be just another 3rd world country….something the UN wouldn't mind seeing anyway.
Ms. Diana Furchtgott-Roth is absolutely right…. Lets let businesses set the wage for the workers… Perhaps Ms. Diana Furchtgott-Roth would even write about how wonderful it would be to perhaps make the workers pay the company for the privilege of having a job….(insert sarcasm here)
It goes without saying that a higher minimum wage causes jobs to move elsewhere and increases unemployment. Whats the answer to that, lower the minimum wage to the point of near slavery in order to better approach 100% employment? Burn social justice on the pyre of ecconomic might in the hope that the less skilled poor are 'dragged along' by the bigger ecconomic wave built on their backs?
If any nation decided to do that, for long enough, they would end up with a distribution of wealth so dangerously lopsided it risked creating widespread social unrest. People would begin to feel a minifest need to protect themselves from other citizens and the prisons would begin to overflow in attempt to maintain social order and cohesion.
What the conservative business is afraid of is wage lead inflation. Which causes the cost of goods to follow cost of production. Not saying how it impacts the economy other than the obvious. The producer makes more money when he can raise his price ahead of his cost. The issue of this article is ridiculous to compare an economy based on the availability of cheap labor to our economy. What are you thinking ?????
1): It must be a slow news day at Reuters to publish Diane's story. They obviously needed 'filler.'
2): Easy resolve for the laid-off American-Samoan workers:
Organize an ESOP, raise stock capital then with assistance from the SBA start their own business enterprise. Let the employee-owners elect their own Board of Directors.
Set-up the business model as minority owned and geographically disadvantaged when bidding on Federal government contracts.
Alan Krueger's experiment doesn't mean much compared to the far bigger experiment that we are doing now. Right now, our minimum wage makes our labor costs far higher than many other countries, like China and Korea. As a result, our products can't compete with theirs on the world market. If we raise it higher, we will be even less competitive. This is ruining our future economy.
I currently work for minimum wage. If minimum wage is increased, I'll get a raise, but I would prefer that it doesn't happen. Increasing wages increases the cost of EVERYTHING. In the end, it doesn't increase the buying power of low pay workers unless they buy things from even lower pay(foreign) workers.
The truth is that Somoa has been fished out.
Mrs. Furchtgott should apply her reasoning to herself first: Let's consider age, maintenance cost and expectations vs. output, shall we, and see the end result. Unwillingness to recognize other factors makes the author a liability to the company she writes this column for because all that is provided is erroneous information.
I don't think the minimum wage change alone is what made Chicken of the Sea decide to close down their facilities in the American Samoa. Surely there are other figures at play here. Not being very familiar with the company or the industry I still felt something was wrong about Furchtgott's column so I decided to scratch the surface a little.
My initial reaction was one of puzzlement at this column: How can a cannery in Georgia – in the East Coast of the USA, far from the areas of bountiful tuna harvesting – be more cost-effective than the local canneries in the Samoa, Pacific Ocean? Prior to canning, tuna is a short term, perishable good, so the time elapsing from harvest and transportation to the East Coast canning facilities is very important to consider… unless the company is thinking of not canning tuna from the Pacific at all, relying instead on the smaller stock supply of the Atlantic. This didn't make sense right there…I was confused.
What left me even more confused is that last year, according to the link I am providing from www.house.gov, Chicken of the Sea, Starkist and Bumble Bee were together in their support of a bill by Congressman Faleomavaega (native A. Samoan) to support the U.S. tuna fishing fleet. How does moving to Georgia in the Atlantic/Gulf of Mexico support the American tuna fishing fleet of the Pacific? I understand the transportation issues may be a more relevant determining factor in why the Chicken of the Sea factory is closing, but somehow don't explain it fully, and the fact that this company has been shutting down canneries in the United States for years now and that it has been bought by a Thai company in December of 2000 seems too important to dismiss. Blaming the current salary level of Samoan workers isn't a valid reason at all in my perspective because no matter how low Furchtgott thinks the wages in A. Samoa have to be to keep the business there, the Thai and South American's will simply be lower and that is it. Domestically speaking, Samoans have had it rough for many decades, forced to put up with lower than national average wages and that hasn't made Samoan economy any more competitive and attractive to other types of businesses – and that includes ship building. What I am seeing is that, bit by bit, canneries want to shut down production in the US altogether from harvesting to canning, and sticking only with the lowest unavoidable cost of import and distribution. A huge primary industry such as this shouldn't be allowed to be outsourced but that is what is happening and has been happening for 3 decades. It's absolute rubbish that the increase of the minimum wage for the Samoan population is the cause of it. I hope the links below will be enlightening enough to those who, like me, are not aware of the other dealings going on about this.
I will leave you with this direct quote from Congressman Faleomavaega in his letter to Governor Togiola, dated 5/07/2009:
"While I am seeking a $20 million emergency set aside in the supplemental appropriations bill, and while I will also ask to increase operations and CIP funding for ASG, I am not sure how successful federal efforts might be, especially given our tuna canneries were recently provided with a $33 million federal income tax break at a time when the United States is faced with an unprecedented financial crisis. Prior to this extension, each cannery received over $5 million per year in federal tax breaks for almost 20 years, which equates to well over $200 million, not to mention the tax breaks they got for the 20 or so years preceding this."
Sources: http://www.house.gov/apps/list/press/as0 0_faleomavaega/enitotogiolaresamoapackin gclosure.html
http://www.house.gov/list/press/as00_fal eomavaega/3canneriesallsupporteni.html
http://articles.latimes.com/2001/aug/02/ business/fi-29727
Yes, go after executive salaries! Let's say we have one of those capitalist bloodsucking leeches pulling down $5 million a year. Let's take his WHOLE salary and divvy it up. Hmmmm, 5 mill divided by 2,000 hours per year equals $2,500 an hour; an outrage! Divided by 2,000+ workers equals ..uh.. $1.25 an hour. OK, OK, it seems we need to go after some more heartless executives. Come on people, the math ain't that hard! The tuna cannery probably would have shut down in favor of a more automated plant anyway (progress, you see), and the wages just helped move it along a bit sooner.
Shouldn't the headline be more like, "Large corporation finds more efficient way of delivering products by building a modern food processing plant, replacing an out of date facility and reducing staff needs by 90%"
In a major victory for productivity and efficiency, Chicken of the Sea built a new, state of the art processing plant in Georgia.
See, it really isn't about the minimum wage, but the Republicans want to make it that way. How many years has Chicken of the Sea, or rather its parent corporation, Thai Union International, been planning to move to this new facility. I can guarantee you that they didn't decide to move in sudden reaction to the minimum wage.
It is more likely they made the move to a more modern facility because the company is moving from simply canning tuna to selling its tuna in pouch form, which requires completely re-tooling its facility. We could be happy that the Thailand based corporation decided to build their plant on US soil.
But no, because Republicans have been serving fear, uncertainty, and doubt for many years. Why waste the chance for some pseudo-economist to push a republican agenda by making up some nonsense.
The income of working Americans has been stagnating for many years. Many stupid things have been done in those years to try to make up for that failure of American capitalism. Wives having to work, going too deep into debt. etc. Something has to be done to solve the root problem, income stagnation.
"They are not in business to provide jobs or benefits."
Sure not. They're in to make a profit. What many people here (the author of the article included) don't understand, however, is that if everybody acts like business is just about making profit, it's only a matter of time before we're all going to be out of business. Every time a company slashes jobs and benefits Wall Street cheers. Nobody seems to care what happens if a lot of jobs and benefits are slashed across the system. We are now witnessing the long-term consequences of this mentality, of the colossal greed and utter, self-defeating stupidity that generates it and keeps it alive.
Nonsense! American companies are used to running from paying workers fair wages, so they run to where ever they can take advantage of poor people. By doing so, poor people live forever in poverty. And then be called "Third World".
Screw these companies, most of whom evade taxes too. And for this writer Diana, I want her to get paid $4.50 per hour, let me see how she will live. Or let her children get paid $3.18 per hour. If you cannot make enough money per hour to have a hamburger, that is slavery by another name.
Why is it that well-to-do people, always argue that poor people should accept poor wages in order to have jobs? Who is getting cheated here? How many millionaires do we have to create in order to keep so many people in perpetual poverty. I am sure that the CEO of Chicken of the Sea makes more money per year than the sum total of the laid-off workers. So much for "Pursuit of life and liberty and happiness for all".
America! Where is your moral? Where if your fairness?
RE: Andre
"Ideas such as these are at the root of the crisis that we are all in. They betray a complete inability to see the greater picture, the interconnections that make up the economic system. Or worse, they are the expression of a propaganda machine trying to legitimize an economic model that is extremely destructive, both socially and ecologically."
Lotta big words there fella. You wanna tell us the point you were tryin' to make??
Amnesty International has long cited the low wages as the leading cause of poverty around the world for decades now. The IMF and World Bank economists have drawn similar conclusions. The American people who remain employed are by far earning much less than a year or so ago. By your logic the economy should be taking off right now.
It is easy to argue for the different schools of economic thought in an ivory tower and within the confines of academic assumptions as to how an economy functions. This is by definition the hypothetical. Nothing historically approaches the economic catastrophe we now endure accept perhaps the Great Depression. Depressed wages will bring depressed prices. This might be survivable for a largely self sufficient economy. This was the U.S. situation in the 1930s, unfortunately we no longer enjoy that luxury.
I find it refreshing that President Obama invited Joseph Stiglitz and Paul Krugman to dinner at the White House. Perhaps it is time you consider the consul of these Nobel and Pulitzer prize winning authors. Their work is exhaustive as it is replete with hard data and lucid insight as to the dynamics of market economies. There are many others in academia that are coming around too. District Appeals Judge Posner comes to mind as one.
It is time we conduct business in this country by how actions effect people and not concern ourselves with theoretical implications of the aggregate.
All moot points in the comment section. American Somoan population 3.2 million, jobs at cots, a couple of thousand. Not going to effect AS or Georgia in any significant way, nor wage level interpretations, etc, etc.
Anubis: You are incorrect on several things. One, to claim we were self sufficient in the 1930's is disingenuous or ignorant. We were heavily reliant on foreign trade and internally we had no controls on food production. This lead to FDR creating a cartel of sorts out of agriculture so as to avoid destroying the small farms. Like most progressives, however, his meddling only hurt the poor. Of course we know that subsidy was an incentive for VC to invest in large corporate farms that eventually killed off small farmers.
Likewise, you speak as if our country had never suffered a more severe Panic than the crash of 1929. That simply isn't true to history, if you believe in it at all (which I can't believe those who call themselves progressives could, considering the overwhelming historical record disproving their theories of economics). In fact, the US had several Panics much worse than the 1929 crash. The only difference is the depth and length of the stagnant economy. You may argue that it was because of corporate greed. However, corporate "greed" existed much more in the 1800's during gold rushes and economic downturns then lasted on average less than 2 years, usually bouncing back as quickly as it fell (much like it did during the more recent stock market crashes when government didn't intervene – like say 1987). Long standing business that bet incorrectly or took too much risk folded and the government didn't save any jobs. In the 1930's, government did interfere and it took a decade for the markets to recover. We are doing it again, which is why we will be able to compare the 1930's to this time – we have the same type of "progressive" policies of spending our way into long-term economic stagnation. If you enjoy high inflation and depressed standards of living, I can't see how you can call yourself progressive. We need to replace "pro" with "re".
While I agree that high wages are a danger, I tend to see the danger in the people at the top of the company, not the working stiffs that are just getting by. How about this for an equitable solution, let's set the minimum wage a company can pay a worker at a fixed fraction of the total compensation the highest paid person in the company gets.
Nonsense. Raising the minimum wage will in both the long run and the short run help American Samoa. No mention is made by the author of the benefit to those whose standard of living will be vastly improve as a result of the wage hike. The conservative view is always that the lower the wage the better things are because it enables more people to be employed. The fact that those employed cannot survive on those low wages is immaterial to them. It is for this same reason that they believe that unions, not the Madoff's, are the cause of all of our problems. They forget that the heyday of this county was between 1950 and 1970 when unions were powerful and only one breadwinner could support a family. Unions and good wages and benefits were not the cause of our present problems. They resulted from an unregulated banking and loan industry that created great wealth for a few at the expense of real growth for the many and we will not return to the good days of the 50's and 60's until workers can earn enough money to pay for a car and a home without resorting to the tricks and gimmicks that brought on our current mess. If the concern is that higher wages will only put unskilled workers out of work, then the answer is to retrain them to have the skills to earn a better living, not to force them to work for nothing.
The lesson from all of this is Businesses will go where wages are lowest, as well they should. Look no further than Detroit to see what happens when the wage exceeds value of labor.
Is it right? YES… Is it fair? YES… How about teaching your children to CREATE jobs and not go searching for them? Our Universities gather our BEST and BRIGHTEST to beat the entrepreneurial spirit out of them before they graduate. How else to you explain the fact that only 19% of businesses in the U.S. are run by PhDs?
69% of ALL business owners have LESS than a 4 year degree!!!!
Education is a wonderful thing, but what are you educating YOUR children to do after College? You need to make sure they go into business for themselves, and stay in business for themselves.
If you do they cannot be fired, or laid off worst possible outcome is they go out of business, and go to work for someone else. (In other words… My plan B is YOUR plan A.)
The myth that you have to pay people crappy wages in order to run a business is just that, a myth. Pay people well, and they work hard and are loyal and productive. Pay them low wages, and it sends the message that you don't respect them, and thus, they have little or no motivation to work hard for you. Productivity drops, and employee turnover goes up. There can be even worse consequences sometimes: just ask all the people who died in the commuter jet crash in Buffalo, NY recently. Underpaid, undertrained, overworked pilots who didn't know what to do under the weather conditions present – end result – lotta dead people. I'm sure the airline company accountants, executives, and shareholders were thrilled with the cost cutting. But the families of the dead will tell another story. And let's just see how many tens or hundreds of millions the airline will have to pay out when it's proven that the airline was negligent.
http://www.house.gov/apps/list/press/as0 0_faleomavaega/enitoinouyeforhelprecanne ryclosure.html
"Yet, given our history with the tuna industry, I am not surprised. More than 50-years ago in 1956, Chicken of the Sea's once parent company, Van Camp Seafoods, actively lobbied the U.S. Congress to suppress wage rates in American Samoa. Commenting on the company's desire to pay Samoan workers 27-cents per hour as opposed to the then prevailing minimum wage rate of $1 per hour, Van Camp stated, "The company has found that it takes from 3 to 5 Samoan workers to perform what 1 continental worker in the United States will do. It is therefore felt that this justifies a lower rate for Samoans."
Over 50-years later, Chicken of the Sea leaves American Samoa with the same attitude, justifying lower rates for Samoans while soon to be paying workers in Georgia almost double the money. Therefore, I am not one to believe the hype that minimum wage increases drove Chicken of the Sea to do business in another location. Truth is, Samoans have not received a significant wage increase for more than a decade, until the recent enactment of P.L. 110-28.
With the enactment of P.L. 110-28, I fully supported a one-time increase of 50-cents per hour for our Samoan workers. From the outset, I also opposed escalator clauses, or automatic increases, as mandated by P.L. 110-28, given the uncertainty of the economic status of the Territory. As you are aware, per the mandate of P.L. 110-28, the U.S. Department of Labor (DOL) conducted an 8-month study of the Territory's economy and concluded that automatic increases would be harmful, but the report was harshly criticized by Chairman Miller and Senator Kennedy for not addressing the issues raised in the law.
In response to the DOL's findings, Governor Togiola and, I with the support of the Fono, sought your assistance in 2008 and 2009 to include, in the omnibus or supplemental appropriations bills, language to eliminate escalator clauses. Regrettably, neither Senator Kennedy nor Chairman Miller would support your efforts or ours. This is why last year I also requested your support of a one-time set aside of emergency funds for American Samoa and CNMI to offset the automatic minimum wage increases. Unfortunately, it was not possible for this request to be supported by the House or Senate.
Now, with the announcement of Chicken of the Sea/Samoa Packing's closing, I am once more seeking your assistance in setting aside emergency funds for American Samoa. The reason for this request is because other factors including rising energy and fuel costs and the crash of the global economy are severely impacting any company's ability to do business in the Territory. Corporate greed and mismanagement are also factors that have affected both tuna canning operations in the Territory.
For years, StarKist and Chicken of the Sea have paid their executives top-notch salaries with benefits, but not once in our 50-year history has StarKist or Chicken of the Sea ever offered profit-sharing incentives or stock options to our workers. Instead, our cannery workers were given a case of wahoo at Christmas and a turkey at Thanksgiving and told that their wages must remain below the federal minimum wage rate.
While suppressing Samoan wages, both tuna canneries employed poor marketing strategies, in part, enabling Bumble Bee to become the number one selling brand of tuna in the country. In a December 9, 2008 meeting with Mr. Kim Jae-Chul, Chairman and CEO of Dongwon, who recently purchased StarKist for some $363 million, he informed Governor Togiola and I and other local leaders that figures showed a 20% decrease in production due to a 20% drop in sales after Dongwon took over from Del Monte, a drop that Del Monte officials who are managing StarKist through an agreement with Dongwon attribute to marketing reasons."
I say it's about time that Ms. Blowhard-Roth's job as pundit/apologist be outsourced to someone who can do an honest assessment of the situation. I'm sure we can find an unemployed American with an MA degree who will be willing to work for less.
No minimum wage is something that I have advocated for years but am usually met with blank stares. Surely if the Government did make employers pay a certain wage then the employer would pay next to nothing. And yet it has been shown time and time again that this is not the case. Yes, it is true that perhaps some people will be taken advantage of but this will be a fraction of what already exists. Currently there are millions of people that are paid "under the table" and because of this they have no protections. If they are not told of dangers or given proper training they cn not turn to Government Agencies that help police these types of abuses.
This is but one of many reason to have no minimum wage and not just in American Samoa. If you look at who actullt makes minimum wage you will be surprised to discover that it is mostly students. Raise the minimum wage and those students will become unemployed as companies must pay other fees instead of just wages. It is time to repeal this bad labor law
What can I say? As congress is pressing for tax increases for the population due to their passage and inept enforcement of the laws, rules, and regulations governing our country it seems they should share in the economic downturn just like all of us are doing!
As most retirement plans have decreases on average of 50% it seems only fair that congress and the remaining federal government reduce their salaries, expenses and staff (total government employees) 50% also!
Something has to be done and it is up to the public to start the ball rolling for fiscal reforms to government employee benefits and salaries.
Why should we pay this President and congress to make these types of mistakes?
So stop complaining and get the ball rolling! Contact your local churches, clubs, meetings, town halls, and especially your state congressmen and tell them you want to pass laws cutting back congressional salaries, staff members, allotments and expenses! Be sure to discuss this at your next tea party!
Please pass this to all of your e-mail contacts and post on as many political news agencies on the net as often as possible until changes are made!
If you are faint of heart, I would appreciate your moral support!
what it does show is the greed that corporations have. it is unfair not to have a liveable wage. i also feel, any tax credit or breaks these companies are receiving should be removed.
enough is enough.
It's always amazing how someone can make comments on minimum wage packages yet they can be considered as someone in the high income group.
See if she will survice on such a package before advising others to do so. In my opinion she is insulting Obama's intelligence and goodwill and should instead of filing such comments walk the talk.
OK so a community that has grown with low wage jobs is going to move on. They have had 30 years to aspire to higher wage more skilled employment.
You might suggest that there is a need for companies to be able to hire at below minimum wage if those affected approve the lower wages by a secret ballot.
We obviously need to understand what we expect as a society. Is minimum wage a living wage or why not have both. Even then what is minimum wage?
Your blather about a cannery moving to exploit some other low wage location. Try Haiti. Have you ever been to a cannery? Disgustingly unskilled.
I do believe we should address low skilled and no skilled segments of our population. Something NOT nothing.
I have just deduced the reasoning behind your article, you have mercury poisoning because you are a tuna fish glutton and you want prices to be CHEAP so you can have MORE.
Another incompetent from the Bush administration trying to justify slave labor.
The reason people are losing their jobs is because corrupt politicians and failed economic policies enabled the top 1% of the country to grab 20% of nation's income and 40% of the nation's wealth. That hasn't happened since 1929.
The current federal minimum wage is only 57% of the living wage–the wage needed to bring a family of four up to the poverty threshold.
Those who supported union-busting, deregulation, privatization, corporate welfare, tax breaks for the wealthy, and offshoring for the past 30 years are at fault, NOT wage-earners. When the dollar finally collapses (it has already lost 94% of its value between 1920-2009; most of which has been lost since the 70s), I suppose that unions and greedy wage-earners will be blamed for that, too.
Grasping at straws(or should I say gasping) is apt for this
I cannot believe that this woman continues to write stuff
like this….just how many times do we have to continue to
read that lower wages are "the answer" to solving the
world's economic ills?
American Samoa yet!!!
How about here on the US mainland? Has national catastrophe befallen us with our new minimum wage rules?
No? Hmmmmmm, I wonder why not?
A token conservative economist with an old refrain that
still doesn't work after all these years.
Can you write a little about "trickle-down" theory?
Or maybe another old classic like "tax breaks for large
corporations and upper income individuals which will
result in job creation"…
Reading the comments posted here makes it obvious that many do not understand what it was that built the business empires of the USA over the last two hundred years. As a result of those business empires, our economy flourished. Even low-skilled labor could make a living. So the idea that a rising tide lifts all boats (thanks JFK) does have a proven record.
So what was it that built those empires? It was greed, plain and simple.
In order to be the biggest or best, it required investment (meaning $$) going into the business. That investment purchased more equipment and hired more people. That, in turn, created growth in supporting industries, which, in turn, created more oppotunity for others.
Therefore, greed is not a bad thing. In a roundabout way, that greed employed the masses.
However, because the rich have been made to feel guilty for the wealth they have earned (wealth is earned – not distributed), they are reluctant to build empires anymore. That translates into less reinvestment, which translates into less growth, which translates into less job opportunity for the average Joe.
Do you want to see the US economy return in more robust fashion? Stop vilifying wealth and greed! And implore the wealthy to start building business empires – again.
Oh, and one more thing. The middle class in the US has shrunk from what they were 30-40 years ago while the lower class has remained about the same (percentage-wise). So, the question is this: Where did they go?
Let's also slash the wages of all the moronic corporate execs who put us in our current predicament.
You can disagree with the ladies line of thinking but you can't with the fact that the tuna plant is gone. What would the liberal propose here, a law that says factories can never leave? If so start working on the next problem..the factories never came. Think about all those oceans out there and you're looking at cans of tuna. One costs 50% more and they both taste the same. What happens most of the time?
I have read many comments here I am struck by the lack of logic and reason. Many here lack any understanding of business and economics. It is all about emotion and feeling. "Oh, these greedy companies! They don't want to pay anyone!" A business is not a social service. They are in it for profit because the shareholders demand that a company be profitable in order to justify its investing in that company. A company is there only to increase shareholder value. That is business 101, folks.
Living in American Samoa is not like living in New York or Boston. The people there do fine on $3.50 an hour because the cost of living is low. The author is COMPLETELY RIGHT. American Samoa should have the right to set its own minimum wage because Washington doesn't know the hell what is going on there. Each state should be able to set its own minimum wage. Say if California wanted to raise theirs to $12 an hour, they should be ready to hear the sucking sounds of jobs going to neighboring. So be it. They would have made their choice. Too bad for the people because the Democrats in that state may be beholden to labor which comprises a minute part of the population.
I lived in eastern Europe. Because of different reasons like high taxes, welfarism, and such, wages in western Europe were high, but so was unemployment and this was before the recession. Many eastern European countries like the Czech Republic and Slovakia had lower wages and lower taxes. They were able to take jobs from western Europe, making matters worse for themselves. The western Europeans only had themselves to blame. A Slovak didn't really need to make as much as a Frenchman. A Slovak making half that of a Frenchman could live comfortably in Slovakia. This is because the cost of living is lower in Slovakia. This is the same thing that is going on in American Samoa. American Samoa is like Slovakia and western Europe is like New York.
Yes, there is poverty in the world. But there is not the dire poverty of Africa or southern Asia in American Samoa. Because of liberal policies, the Samoans are doomed to the fate of Africans.
Thank you liberalism and empty-headedness. (WHICH ARE ONE AND THE SAME.)
You are right Diana:
You do not care the fact that those minimum wages are not even living wages, and even if those poor workers can have minimum of what they need stil you do not care! how about you trying to live with such small amount?? sure that is not happening, but for others to be in such condition it is ok.
Ms Diana Furchtgott-Roth, take a year away from your cushy six-figure job and live, I mean live with those minimum wages. I bet you couldn't make it a week. . .
The basic thing that is missed by most or all of the commenters is this one "Is this the best that I can get"
I worked for minimum wage for a long time, but I dont do that job, ot that kind of work anymore I am a Systems administrator now and i do better than the minimim wage. However the process is similar at higher levels of pay I serve in an IT position for the US Govt I perform IT duties that are the same or more so than others in IT, but my Job code is "computer clerk and assistant" not IT specalist if my job were correctly coded then My 3 other colleagues and I would get the Bonus that comes from being in an IT position about 6000 more per year… Now those were the wages and I did sign on the dotted line, but when a position opens where i can actually get credit for my education, training, and experience like most of the people in DOD do I will cast my ballot with my feet and I am so gone. Im not stuck staying there, as the idea is to move to a better position. this is not a one size fits all solution, but it does work for a large percentage of people.
I dont think McDonalds indended to people to work for them for life… with the comming increases in EVERYTHING Busniesses will be in a position to choose between keeping the doors open or closing down shop… If i were one of these So called Greedy men I would Close the doors cash out my busniess and put everyone out of work.
as a side note if some one came to unionize my workers, and if I was paying higher wages and benefits then the competetion I'd close the doors and take my dough and cash out of the system let the government take care of them…
If you dig how hard enough Diana, I'm sure you can find some "spin" that Medical Care can be hazardous to the people also.
Cherry picking info can debate "pro and con" for ANY ISSUE OR SUBJECT !!
American Samoa should be an independent nation.
The reason StarKist is leaving the area is not due to wage increases but the fact that the Communist Chinese fishing fleet has nearly eradicated the tuna schools in the area.
You had to go pretty far afield to get this little morsel.
I spend nearly 25% of my year overseas on China working on the design and manufacture of products consumed in the US. Why?!? Because labor is cheaper over here, and when the customer is choosing between my product and my competitor's product on the shelf at the retail store, they don't look at where the product is manufactured, they simply evaluate the styling and the price (perhaps this is not true for all products, but for the product line and price point at which I develop product, this is a _completely_ true statement).
I'd also like to point out that while the wages in China are roughly 3% of the wages in the US, this is not a "slave" wage. The quality of life that the workers enjoy at $.50/hr here in China is very good. Interestingly enough, in 2008 when China enacted the new Labor Contract Law that set out to improve worker's wages and other conditions, the results were devastating. In the area in which I work, nearly 9,000 factories shut their doors within the first 10 months of 2008 (http://online.wsj.com/article/SB1232150 43508192065.html). I wonder whether the now unemployed workers feel that these labor laws improved their quality of life?
Everybody who is bashing the author must HONESTLY ask themselves, "would you be willing to pay 20%, 50% or 80% more for all of your consumer goods?" I doubt it, so while in theory everyone would LOVE to make a higher wage, are you also willing to pay more money for all products you consume? It ends up being a zero sum game. In the end, the intelligent producer won't pay for higher labor, and instead will find innovative ways to produce a lower cost good (move to an area w/more affordable labor) and to take market share from their competitors. We're seeing it happen in China, where they are losing manufacturing jobs to lower cost producers in other southeastern Asian countries. As we continue to raise our wages in the US, we are forcing our US manufacturers to consider moving operations elsewhere so that they can continue to offer competitively priced products. This issue should not be decided by emotion, but by sound economic and business judgment. "Greed" bears no relevance on this discussion.
How must it feel to live without a heart?
I suggest you try living on minimum wage before opposing any increase in same.
When working people have more money, they spend more money and thus raise the level of the economy.
All you have to do is look at California to see just how costly "cheap labor" really is.
Employers are paying illegals under the table in cash.
As a result revenues are down for that state.
That leads to cuts in basic services and increased taxes for those still playing by the rules. It has taken 30 years of such behavior, however California is now knocking on the door of third world type poverty.
Social unrest is a real possibility.
Don't forget Diana that the buffer between your ilk and social unrest has always been a solid middle class. Take that away and gues what? No buffer anymore.
You sure you want to go down that path?
Why not make the minimum wage $20 an hour? Why not $50 an hour? Surely that would help the economy much more than $9.50 an hour! Just imagine what $1000 an hour would do!!
It's very sad that most of the uneducated people are allowed to vote and they do so with their emotions instead of actually understanding economic impact. All I hear is "I need more benefits because I'm too incompetent to earn them on my own." This article is well written and shows what will happen here if we go down this path. Unfortunately there are more of the "uneducated masses" that are controlled by government and are allowed to "vote". Why don't you get some economic education and spend some time in a socialist country and then tell me what your opinion is.
John Rogers – "How must it feel to live without a heart?" Are you kidding? You need to look those 2000+ people who just lost their jobs and tell them this is for their own good. That should make their life much easier.
Whose fault is it that a person must rely on an entry level wage? It's that person's fault – not society's.
And you sound like a good Marxist when you mention "revenues are down" when people are paid cash "under the table". All you need to add is that all wealth belongs to the state, and the government will decide what each person needs.
Arizona voted in an increase of minimum wage and people are losing jobs and benefits are decreasing because of it. See below:
http://news.prnewswire.com/ViewContent.a spx?ACCT=109&STORY=/www/story/12-30-2008 /0004947720&EDATE=
it gives an example of why a $2.10 increase of minimum wages cause businesses to close and loss of jobs and benefits.
Here is a more recent article on local restaurants. http://www.azcentral.com/news/articles/2 009/04/15/20090415politics-wages0415.htm l?source=nletter-news
A restaurant close to us called On the Border closed a couple of locations and most lost jobs but some were put at other locations if a position was available. They also significantly cut benefits to employees.
http://www.tucsoncitizen.com/ss/fromtope mails/114426.php
I can tell most of the commenters here telling Diana to live on minimum wage for a while have never actually done it themselves.
I worked 2 part time minimum wage jobs for a year after I finished college (2 years ago). In that time, I lived alone, ate 3 good meals a day, never missed a bill payment, and was even able to save money.
Anyone who says minimum wage isn't enough to live on hasn't tried.
All the talk about raising the minimum wage "to help poor people" is a smoke screen. Many union contracts are written so that their pay rate is a multiple of the minimum wage, so what Democrats aren't telling you is that every time they increase the minimum wage, they're giving unions a big pay raise. That's the real motivation: they're paying off their supporters. They don't care if more people are unemployed as a result.
I have had minimum wage jobs throughout my life, and it is not easy to live on them. However, it can be done, provided you don't live the American dream and run up a ton of debt for crap you don't need.
I don't plan on being here forever, but I am doing OK on my wage and tips now. If the minimum wage is raised $2 more tho, I will be screwed. Everytime they raise the wage, people who work for tips suffer most because customers don't realize how little they make, and are tightening their moneybelts when they go out. But tip earners still have to claim tips at least up to minimum wage, whether they earn that money or not, and they get taxed on it.
And it's true- companies who pay minimum wage, such as McDonald's or the grocery store or whatever, don't expect those people to work for them for life. And if they do, they usually promote them to some form of manager with a healthier salary compensation and benefits. It's ridiculous to pay unskilled workers and high school kids high wages for go-between jobs.
On the other hand, if you are so concerned about how they fare, maybe just being nicer and showing a small amount of respect or friendliness to the individual would be helpful. They still don't make enough (whether it's $7.25/hr or $9.05/hr or even $900/hr) to take a customer's crap just because they are behind the counter.
Try to remember that nobody is their job, and everyone is a fellow sentient being (for the hippy love revelers).
Minimum wage is not susposed to be a wage to live on but to enter the workforce. You are a fool if you think so. In fact, most people on minumim wage stay there only a short time and proceed upward in compensation.
Have you heart? In fact, John, you must not have a heart given you seem to not feel for all those in Samona who will be losing their jobs. Wouldn't they say that making $3.50 an hour is better than not having a job? I would think so. But you are so busy having a heart. All that does is make YOU feel good. It's not helping the jobless.
If you really cared, you would support policies that employeed more people and did not take their jobs away.
Rasing the minimum wage hurts worst back and hispanic males, and others on the lower ladder of job skills. Apparently, you care little for those folks. Don't you want them to have jobs? When working people have NO money because the do not have a job, that really hurts the economy.
Middle class folks start at minimum wage then rise up. I did it when I was 16. Guess what, I am making a bit more now that I am in my 40's. Funny how that happens.
Really, I want to people to be employed and learn the discipline of working for someone, coming in on time, serving a customer or boss. All these are very valuble lessons. And I know more people will learn that if they are employee. And I know more people will be employeed if the minimum wage is lower. I guess it makes me heartless that I want people to have job.
Really, I don't care if you think I am heartless because my concern is not me it's the guy or gal would would be working but is not because a rising minumum wage has caused a company to elimate a position.
You go on feeling good about yourself and be full or care and heart. I am sure that will not help someone get employeed.
This article is so obviously slanted. Moving the company to Georgia had absolutely nothing to do with the minimum wage whatsoever! It was simply a business decision that the author of this article is skew so far out of proportion to fit her "ideology". A new cannery was built for 20 million in Georgia to be closer to consumers and reduce the cost of shipping product across 1000's of miles. Also, since the cannery is brand new, and I'm guessing built with state of the art equipment, the work force is being reduced from just over 2000 employees to 200, an 1800 difference. Lets do the math for wages 3.50 x 2000 = $7000 an hour in Somoa. 200 x 6.55 = $1310 an hour in Georgia. The moved to an area with a higher minimum wage to save money for the company, as well as saving money for shipping. This whole article is just blowing smoke and I am disgusted with Reuters for allowing such a biased piece into their website. Didn't an editor do the math? Fact check?
I'm amazed that so many (via their comments) would choose no income to a minimum wage they don't like. $3.76 per hour is a lot better than $0.00 per hour.
Brian you have misunderstood. I am not suggesting that New Deal policies will work today either. I think it is time to correct some of your factual errors.
Bank failures, soil erosion and depressed crop prices led to food shortages. Have you not heard of the dust bowl? We did not import all that much of anything in the 1920s and 1930s. Tariffs levied by the U.S. government simply caused other nations to do the same. World trade contracted and worsened the situation.
I was not talking about the panic of 1929. I was talking about the Great Depression and banking collapses. Only the economic collapse following Andrew Jackson's decision to let the Federal Bank of Americas charter expire was worse. 95% of all factories closed. The nation was then far more rural and industry counted for far less of economic output. This occurred at the birth of the industrial age. It is impossible to know with absolute certainty how the world will fair as this current situation unfolds.
The economy did not recover during the thirties based on New Deal policies. Congress approved huge spending programs for the Lend Lease Act in 1939. Truly heavy spending necessitated by the war lead to increased GDP and reduced unemployment.
To say greed existed much more in the 1800s is to suggest human nature has fundamentally changed. It probably has not in 10,000years. Greed is the motivating factor of all free market economies and business activity. Perhaps you should read Stiglitz, Krugman and Posner as well.
Clearly you sound angry and that is why you insult me. That neither makes up for your misinformation or enables you to truly understand the crisis at hand. As in the 1930s environment played a pivotal role along with greed and and a lack of coherent regulation before the crisis. To take such actions afterwords fixes nothing and only protects future generations should recovery occur. The effect war time spending had on economic recovery should be scrutinized. Perhaps similar dynamics can be employed with out having to fight a war.
I lived alone on minimum wage for years back when it was $3.50/hr. Later I and my fiancee lived together, both of us making near minimum wage (~$5.50/hr at the time). We did fine. We had electronics (including early cell phones) and cars and went out to eat regularly. We managed our finances responsibly and when we overspent we did without to make up for it. Those of you who think you CAN'T live on minimum must also believe that you are entitled to spend lavishly or have a right to expensive luxuries. By being responsible we lived in a solidly middle-class apartment and maintained a relatively decent standard of living. For those who believe that "keeping up with the Jones\'" is a priority, go learn skills that make you more valuable as an employee or start your own business.
Guess the thought of actually EARNING a living wage never crossed anyone's minds. Desire a higher wage, aquire a valuable skill. Of course, it is probably much easier to whine than apply oneself.
I'm French, and here the minimum wage is 8.87 € by hour, which makes for 12$.
And it doesn't seem too much for me. In fact, a lot of people are in favor of raising it. I did economic specialisation to have the equivalent of your A-Level (baccaulérat) and I'm currently at Sciences Po Paris: I am definetly able to talk about these issues since I am studying them, and a lot of the comments I heard are unfounded.
In france, according to the national radio, the sum of all the benefits are shared like this:
about 50% for the shareowners, 43% redistributed in the business company, 7% to the employees.
See? In fact, if the company you're working for was paying you more, it could afford it… and it would be better for your economy in fact: since low wages cannot enable you to save a lot of money, you end up consuming more than rich people (Keynes, money is lost by rich people). It is not the investment the basis of the economy but the consumption, if people were buying more companies would make more profit: to enable growth then, your government should decide to focus on the people rather than a few rich people who tend to pay fewer taxes, priviledging the exportations.
I tend to agree with a previous comment. The wage hike is a government scam because it's only the government that benefits from the hike (more taxes from a higher wage!)
Ok! So they got a bump in their hourly wage. What the hell do you think every business that pays minimum wage workers going to do to compensate for the increase in wages and taxes (remember, businesses have to match Social Security Taxes withdrawn from wages,higher wages – – higher taxes) associated with the hike???? INCREASE THE PRICES OF ITEMS SOLD. Now that bump is absorbed by those higher prices, however the Government still gets their higher taxes regardless! Truly a scam!
Good 1 Dan! You are right on the money!
If you don't want to sacrifice to enhance your hireability.. then don't whine about what you get!!!!
What is the thinking re elimination of minimum wage?
Looks like more and more of our food will be coming from China.
I think both side of this argument are correct. Businesses have to compete, and people have to live. There are two sides to every story and the truth lies somewhere in-between.
The pains of globalization are great. Business can't continue to use third world and developing nations labor rates as leverage, nor can labor demand high wages or they will drive away business. Labor unions in their current incarnations would destroy business. The pain will continue until the playing field becomes level.
"I have read many comments here I am struck by the lack of logic and reason. Many here lack any understanding of business and economics. It is all about emotion and feeling. "Oh, these greedy companies! They don't want to pay anyone!" A business is not a social service. They are in it for profit because the shareholders demand that a company be profitable in order to justify its investing in that company. A company is there only to increase shareholder value. That is business 101, folks."
Your arguments support the need for government to regulate business so that they do not indulge in speculative frenzies that bankrupt the nation. Neither do the American people exist to provide slaves to finance capital.
Let's see…for the last half of the 20th century the peoples in American Samoa (and the rest of the Samoas too) had to deal with overbearing military presence of all kinds.
Their ancestral homes have been the playground of the superpowers: They've had to put up with nuclear and chemical weapons testing and have been displaced for generations to come all throughout the Pacific.
American Samoa is full of American Citizens who don't have the right to vote in national elections because they're unincorporated and yet they provide cannon fodder for the american military as their young see no other choice left to them. At least they should be provided with the means to make a decent living at home in exchange. Anybody who has lived in remote regions of the country, like some Alaskan small town, knows the costs of importing everything because, guess what, there is very limited production of basic necessity items and the ones available are expensive.
While the mentality of the likes of Mrs. Roth continues to determine what Samoans must earn, how they must live, who they must work for, nothing will ever change.
The Samoans and their representatives have bent over backwards over the years trying to please the companies that employ them and the foreign fishing companies that supply them but obviously it's not enough. They must keep getting screwed over and over again. The situation of the Samoans is not unlike the situation of Native American Indians in the mainland in many respects, including being exposed to nuclear testing radiation and having to put up with nuclear waste garbage.
Bismarck in a can for you!
If you had said, capitalism's too big to keep failing to pay workers enough to live, as well as too good in theory to keep destroying defenseless nations in practice – I might have agreed.
If you had said, the abysmal cesspit of what passes for capitalism in Modern America ought to be judged by the results of its concerted action instead of by the flimsiness of its excuses, I might have recommended you for a raise.
If you had said, sooner of later the corporate rapists of the sea are going to run out of ports of call to infest as well as tuna to extinguish, I'd have said, mind your language, but you go, Girl.
If you'd mentioned that Samoans whom God preserve etc. are very likely to want to get even with and possibly render extinct the corporate fish-heads responsible this escapade, I would defend to the death your right to say so.
But clearly, Milady, that's not what you did.
You began by making excuses for the cavalier operations of an obviously fishy corporation in a faraway tuna republic. Then you went right on making a meal out of the same old excuses for a whole slew of other rather raw-tin corporations in this Great American kettle of fish, over paragraph after tendentious paragraph. The upshot appears to be that no excuse is too fetid for corporate managers to want to trot it out, rather than pay the people who slaved to make them rich, whatever their line of trade – one sordid little example of rampant feudalism in Samoa serving as the foundation of this whole card-house argument.
Its chief ingredient being a load of chowder long past its shelf life, the above article represents a recipe for disaster, gurgling under its screw-on cap one dreadful case of journalistic botulism. Hopefully it never gets into the hands of terrorists.
Google "chicken of the sea legal" for a lengthy list of reasons why this feudal corporation should never be taken as a shining example of anything – paying their workers decent wages never having been among their virtues, if any.
Ask yourself how truthful and impartial can possibly be a spokesperson for any corporation can be, whose very name begins with elementary deception.
And please ask yourself this before citing them or any of those in bed with them as authorities on the economics of human resource.
Minimum wage or no, that's the sort of elementary diligence any reader is entitled to expect. Those who can't provide their readers with it shouldn't be tossing around red herrings. There's a lesson for the fishy chook in there too.
As the U.S. ramped up production for war goods and equipment the federal government did some unusual things in 1941. Military contractors were required to pay wages that were three times or more than the prevailing wage. There was rationing and some products such as automobiles could not be purchased at all. The government also put in place wage and price controls. The net effect was workers had more income than they could spend. The American worker did two things with this extra income. They bought war bonds and saved.
War bonds accounted for more revenue for the war than taxes or capital raised on Wall Street. Most people thought that when the war was over that the economy would go back to the way it was through most of the 1930s. That didn't happen. The demand for autos and other durable goods provided the incentive for manufacturing to produce peace time goods right when the demand for military hardware plummeting. Not only was all that money in savings burning a hole in the pockets of some, it was also the source of capital required by business for short term borrowing and capital investment.
High wages built a middle class in this nation out of the ashes of war. Now far be it for me to suggest that what we need is another war. On the contrary we need to employ similar if not the same tactics so as to achieve a high savings rate in this nation. We now rely on foreign depositors for this essential component of capitalism.
Next we must begin a drastic reduction in consuming oil and other fossil fuels that we import. We are no longer an oil exporter like we were in the 1930s. This type of dependency puts inflationary pressures on the dollar and drags us into the affairs of oil producers.
Thirdly, if we are to raise wages we should do so to move the work force into areas where they are needed the most. I would suggest geothermal energy plants, solar power cells, wind turbines, power grid upgrading and refurbishing people's homes and business' to generate power off the grid. Conservation maesures should also be developed.
Fourth, we need to develop rail and other forms of public transportation. This could be used to connect people through corridors that until now could only rely on air or highway travel. Both of which are very inefficient in the use of fossil fuels. Conservation baby.
And finally we must take a hard look at how we produce food. Our health care in this country is twice as expensive as other industrialized nations. We do not fair very well in life expectancy, morbidity and infant mortality as other nations who spend less. Perhaps it is not just that their health care system is so much better but that the foods they eat offer far better nutrition. This might well be the reason why so many nations have a healthier population than our own.
If we are going to print and borrow gazillions of dollars, let's spend it on something that will pay dividends in the future for generations to come. It will take that long to pay back that debt. In the bargain we will clean the planet up somewhat. We will probably rebuild the middle class and just maybe become an independent nation once again.
Do people know that the minimum wage was started to keep minorities out of the work place. Low skilled workers the ex-slave had the ability to under cut the wages of the white folks. The white power people knew if you had to pay a minimum wage above the average black mans wage companies would higher the more skilled white workers. Without the price advantage blacks became much less of an option to companies.
Boortz had a great thing on the back of his book. Middle class people cannot afford a luxury boat on a middle class wage. Solution dont buy a boat until you make enough money. For poor people, dont have children until you can afford them! If you are earning minimum wage you have not earned the right to raise a family yet. If you cant afford it dont reach into others pockets to have what you cannot afford.
Posted by joe
Ms Diana Furchtgott-Roth, take a year away from your cushy six-figure job and live, I mean live with those minimum wages. I bet you couldn't make it a week. . .
I bet sometime in her life she has worked for minimum wage. So now we should fault her for moving up and bettering herself? I remember when people in American used to want to improve themselves, now they just wait for the government to "improve" their lives. And yes, i have worked for minimium wage, when I had minimum wage type skills. I guess I am evil to because I paid my way through college by working three jobs and put myself in a situation where I can make a lot better salary. Oh how evil I am. If your plan is for the government to take care of every aspect of your life, you have no plan.
I hear from republicans that people need to be "Responsible" for their actions and people need to be more civic minded towards their friends and neighbors in this tough economic time. I absolutely agree, but why do I not hear the same GOP demanding Business(who are only made up of American Citizens) be more civic minded towards the country in which they are able to make the most amount of money in and at the same time, the owners of these businesses enjoy more personal freedoms in America than any other country in the world. Where is the loyalty to country? Where is the loyalty to fellow Americans?
A minimum wage was introduced because Capital(businesses) have always, always tried to pay the least amount possible for all wages and services while trying to charge the most for products and services to maximize profits. Simply put they (ALL BUSINESSES) wish to lower overhead(Cost of doing business) and raise prices as high as the market will bare. Sound business strategy and to this end, Capital(business) will always, always try and use Labor(Poor and Middle Class) and squeeze as much productivity as they can while giving as little as possible back. Why do you think so many jobs were sent overseas? It's good business for Capital, who don't care who makes their products as long as they are made as cheaply as possible- notice the prices never fell, even though these companies were saving money on labor, the saving never came to the consumer because Capital pocketed the profits.
The cannery could have been built in Somoa and still be run for less overhead with the higher minimum wage. 2000 x 3.5 = 7000$ an hour; the new factory would employ 200 so 200 x 7.55 = 1450$ an hour. SAVING almost $5500 dollars an hour!! Where is the sense of Civic responsibility! Somoas have been working for this "Business" for decades and depend on it. The "Business" could have saved money by building the new factory next to the old, but they could save even more on shipping costs by moving the Cannery "Business" to Georgia. The move has absolutely nothing to do with "Minimum Wage" and every thing to do with making as much money as possible while paying as little as possible back to the people who do all the work.
Not surprising that the first comment is from someone bashing corporations for wanting to be successful. A corporation can be likened to a living creature, first and foremost it needs to be concerned about its own survival. A wolf caught in trap, will gnaw its leg off to survive, so must corporations be willing to gnaw off their own leg if caught in a government trap. A three legged wolf is not a healthy animal, but its chances of surviving are better than if it remains in place waiting for the hunter. Lunacy is waiting in place thinking the hunter will bring it table scraps. If you are trying to raise a family on minimum wages then you are allocating yourself to position of the later wolf hoping for table scraps. I have never worked a minimum wage job. I chose to take an Electronics Shop Elective in my freshman and sophomore years of High School. At the age of 16 I started working part time after school and full time in the summer as an electronics technician. While my friends made $1.65 selling movie tickets I was making $8.25 an hour.
The stupidity of thinking that raising minimum wages will some how miraculously improve a poor persons life is in complete denial that minimum wage dictates the cost of living. Couple of reasons that professional politicians keep driving the minimum wage upwards are:
1) it raises tax revenue by moving people into higher tax brackets
2) Most unions negotiate their contracts based on the cost of living. Union members make more money, their dues go up, the Union bosses who finance Democrat candidates and some Republican candidates give themselves nice big pay raises.
In the meantime small non-unionized non-subsides companies fail.
Businesses are in business to make money, not be civic minded, not pay a "living-wage", not be green, not give people jobs, etc. No one is entitled to employment, we earn it every day that we show up and work hard.
I have a degree in engineering and I am paid well. I suggest all of the whiners out there shut-up and get a degree in a field that earns a decent living.
A maid should not be paid what an engineer makes. I've done both.
It seems so simple to me. Birth control. Planned families. Supply and demand, applied to labor. Don't have more kids than there will be good jobs for. We'd all like to earn a lot of money, and I'd love to see human beings honored with skilled jobs in a more automated world, rather than doing what a stupid, simple robot will be doing in a decade anyway, but without reproductive continence, this means some people don't get jobs.
As a reply to dale, post dated May 16th, 2009,
"I bet sometime in her life she has worked for minimum wage. So now we should fault her for moving up and bettering herself? I remember when people in American used to want to improve themselves, now they just wait for the government to "improve" their lives. And yes, i have worked for minimium wage, when I had minimum wage type skills. I guess I am evil to because I paid my way through college by working three jobs and put myself in a situation where I can make a lot better salary. Oh how evil I am. If your plan is for the government to take care of every aspect of your life, you have no plan."
Not wishing to put you down but here is my take on what you said:
The people in American Samoa DON'T have the opportunity and luxury to hold 3 jobs because the job market there is highly limited. You had the chance to hold 3 minimum wage jobs because you were in an area where you could, there were that many jobs available to you.
What you say is to those people on an archipelago in the middle of the Pacific is to get a job, get skills, earn more – when the social reality is that you can't get one job because THERE AREN'T ANY, let alone three. DOH!
To give you an idea, we're talking about a bunch of islands many nautical miles away from the mainland USA, inhabited by about 60,000 people and only one community college. To commute many people take a boat. If the hurricane season allows.
Again, I'm not trying to put you down but how you are saying what you are saying is highly unrealistic. The fact that the author may or may have not taken a minimum wage job sometime in the distant past is irrelevant since it's obvious she hasn't gone through the same situation people in American Samoa are going through today. What gets me is the absolutely distasteful way in which she has twisted the words and the facts to outright lies.
It doesn't take a genius to do a little search online and come across with the real facts, derived from the same people she used as sources for her "calumn".
There is no English teacher that wouldn't flunk her due to her poor skills in quoting her sources and lying to her readers.
A job held doesn't necessarily reflect real skills since necessity will always take precedence over choice in the real world.
I see the author and the replies of some as a symptom of a disease that has nothing to do with minimum wage arguments: Generalization based on Prejudice. I mean, what holds true for Samoa holds true for the United States, right?
I don't get it why is it such a game to bash a whole people online. Who is Mrs. Roth trying to get a reaction from?
In reply to May 15th, 2009 4:49 pm GMT – Posted by Russ
"I think both side of this argument are correct. Businesses have to compete, and people have to live. There are two sides to every story and the truth lies somewhere in-between.
The pains of globalization are great. Business can't continue to use third world and developing nations labor rates as leverage, nor can labor demand high wages or they will drive away business. Labor unions in their current incarnations would destroy business. The pain will continue until the playing field becomes level."
http://www.dol.gov/esa/minwage/americanS amoa/ASminwagePoster.pdf
What high wages? Labor unions were never allowed to set foot in American Samoa.
Thanks to the Friedman scheme of economics disasters, once again the shock of looseing the workers grip on a decent wage is frontally attacked. I am sure that chicken of the sea & many others of that ilk, will only be satisfied when the daily wage is reduced to the equivilant of 1 loaf of bread.
What's true for American Samoa holds equally true for the United States?
Bah. You say Samoa, I say Somalia. Not to mention Chechnya, Kosovo, Chiapas, Haiti, Guatemala, Indonesia, Tanzania, The Philippines, Bolivia…
It's not labor unions holding entire countries to ransom, no matter how they may be portrayed in the corporate media. It's not labor unions absconding with the working man's pension funds, not that I wouldn't have put it past some of them in the past.
And it's not minimum wage that makes any corporation's products, their excuses for products – and their excuses for the misery their products and business model(s) inflict – so utterly insufferable.
I mean, have any of you ever tasted Chicken[sic] Of The Sea? Anybody here likely to purchase another GM clunker? Anybody liable to shop at Wal*Mart?
Thanks to Ms Furchtgott I know I never will again.
Maybe workers can find other things to do, other countries to work in. Maybe they'll find justice and maybe they won't. But they can't be faulted for looking for it wherever they are.
Judging by her pitiful excuse for an article here, it can't get much worse for working people than where they are now, in the god-awful peonage system to which she among others evidently subscribes.
So wherever they may go, tell 'em Ms Furchtgott sent them, to eat cake.
Jobs don't get lost because of minimum wage. They are lost when companies try to hold on to their profit margins. That is to say, that rather than pay you more for the work you do, many companies would simply rather not hire you and take their "work" where someone who is desperate enough, will do it. In the Samoas people are loosing their jobs not because of the minimum wage, but because the canneries had become too comfortable with this level of exploitation. If they have to pay the Samoan worker more money, the owners won't be able to afford as many of the luxuries they've become accustom to.
It's all about the money. Working in a cannery can't be easy or pleasant. And inflation has gone way past a $3+/hr standard of living. So in truth, these people have lost their jobs because government has said that companies must compensate all Americans at no less than an acceptable minimum level, and the canneries either don't want to do it, or can't survive if they do.
So here we see with glaring clarity, a financial arrangement that requires that certain Americans be forced to accept substandard compensation for the sake of profit. Profit mind you, that the factory worker does not directly, let alone equally, share in.
Is the government wrong for mandating a minimum acceptable level of income so that citizens can keep up with inflation?
Do companies have a right to give you less than you deserve in exchange for the best of your ability?
Q: Why does Chicken[sic] Of The Sea lick workers into total submission?
A: Because they can
"..May 16th, 2009 8:50 pm GMT – Posted by Benny Acosta
Jobs don't get lost because of minimum wage. They are lost when companies try to hold on to their profit margins. That is to say, that rather than pay you more for the work you do, many companies would simply rather not hire you and take their "work" where someone who is desperate enough, will do it. In the Samoas people are loosing their jobs not because of the minimum wage, but because the canneries had become too comfortable with this level of exploitation. If they have to pay the Samoan worker more money, the owners won't be able to afford as many of the luxuries they've become accustom to…".
Yeah, just like you shop around for a car until you find the seller 'who is desperate enough' to sell it to you at the lowest price (profit margin)
Your statement is typical of one lacking in understanding business and economics, which generally equates to a starry eyed socialist.
It's OK for 'you' to shop for the best deal in order for 'you' to keep as much money as you can, but when a business does it………bad capitalists.
Socialists are bad enough, but a socialist hypocrite……they're the worst.
This minimum wage issue brings back another issue that really frustrated my ability to understand. When the government gave out the consumer stimulus checks. Big business raised a stink because we weren't spending the money. Instead most households paid down debt and put money in savings.
Some people made the argument that this would be a bad thing. So the government turned around and GAVE over 700 BILLION DOLLARS to the banks in order to "buy bad assets", "monetize debt", and such.
Now correct me if I'm just too dim to figure this one out. But if people were saving their stimulus checks and paying down debt, then doesn't the increase in savings amount to a capital injection directly from the consumer base which is supposed to be the "back bone of the American economy"?. Doesn't paying down consumer debt help clean a good amount of total debt off of bank balance sheets?
And no one has ever explained with any REAL CLARITY just how giving the banks all of that money while at the same time allowing all of that consumer debt remain on the books a good idea?
How is it a good idea that you get taxed to bail these wealthy, greedy, incompetents, out, while still holding the American consumer accountable for their debt regardless of the cause?
So as working people we are supposed to support the financial bailout of the wealthiest of the population, while the working/poor are held to account for their debt to the point of being evicted from their homes and having their community roots ripped out?
Is there some kind of trickle down benefit? With bankers and corporate insiders in such high positions of authority, I don't think it's "benefits" I feel trickling down.
In 2005 dollars, the Federal "real" minimum wage was at a high in 1968 and even then, it was 90% of poverty level for a family of four. In 2006, the real value was at the lowest level in 50 years amounting to $10,700 annually – nearly $6,000 less than the federal poverty line for a family of three.
Obviously, it hasn't been the minimum wage that's been responsible for the dying U.S. economy and we can reduce it to zero (that's $0.00 per hour) and still not save the economy of this country. Meanwhile, the wealthy have been increasing their share of the total economy.
There's a message here and it's not to reduce or merely maintain the nearly worthless Federal minimum wage as a means of saving this country's economy. To say otherwise is insane propaganda meant to make the wealth distribution skewed even more to the benefit of the few and the disaster of many.
We might as well open the borders to anyone in the world who wants to come here and work for nothing while Americans starve to death. As a matter of fact, that's exactly what has been gradually happening except that those foreign workers don't have to pony up transportation.
Should we assume the author writes her columns for minimum wage, and is therefore an expert on the survivability of earning not enough to pay bills while being forced to compete with 3rd worlders who think $100 a month is big money?
Let's toss in the "common wisdom" that folks in those countries are "frugal"…when you have no electricity, running water and eat rats bought at a local market, you don't have money to spend. That's not "frugal"…that's destitute.
Let's see somebody who only knows of hardship through 3rd parties try to survive under the conditions they've created. I give them odd of about a googleplex to one…against.
Hey Joe, You can call me what ever you want. That doesn't change the fact that people can't live on the money they earn. If calling me a "starry eyed socialist" and telling me I lack understanding is the best you've got, then it's easy to see why we have so many homeless in the streets while so many homes go unoccupied
The problem I've identified is real. Your response provided nothing in the way of a solution or an explanation that makes the lot of the Samoan people any better.
Our financial system prioritizes money over people. This is a fatal systemic flaw that will ultimately result in massive human suffering (as it already has) and eventual failure.
Posted by Joe3
"It's OK for 'you' to shop for the best deal in order for 'you' to keep as much money as you can, but when a business does it………bad capitalists."
A shopper is not a business owner. When you shop you're looking to make a purchase.
A business is supposed to provide a "valuable" service or commodity. These things cannot be produced by one individual and so requires the efforts of many. If as a business owner, you require the labor of many others, then by what logic do you consider it OK to rob American workers of their well deserved compensation and equate that to a person shopping for a good deal?
You shop for THINGS. People are not things to bought and sold. So what am I failing to understand that makes this "arrangement" so good?
The problem here is Government interefrence. The relationship between an employer and an employee is a private one that should be free of Gov't intervention. It doesn't matter if you feel I'm not making enough money at my job, it's not up to you to determine how much money I make. It's not up to you to elect officials to help me with my wages. You see the blighted, disadvantaged, less-fortunate Samoans and think "The Bad Companies are taking advantage of them! Something must be done!" Aren't you insulting the Samoans by inferring they can't take care of themselves? I'm sure before the tuna plants were even even built a wage structure that fit the local economy was put in place. If the Samoans accept their minimum wage, who are you to tell them they're wrong? You sit thousands of miles away, across an ocean, and proclaim that YOU know best what these people need? You actually proclaim your own view of these free people: as backward savages, who, without your enlightened progressive policies to protect them, will be perpetually downtrodden by their own inability to deal with reality. Mr. Langkilde, who actually lives there, declares that the relation established between the people of Samoa and the tuna companies was a mutually beneficial one, until meddlers like yourself feel "something ought to be done." Now look at the ruin you and those who think like you have brought upon the Samoans.
I'll close with a quote:
"As soon as A observes something which seems to him to be wrong, from which X is suffering, A talks it over with B, and A and B then propose to get a law passed to remedy the evil and help X. Their law always proposes to determine….what A, B and C shall do for X." But what about C? There was nothing wrong with A and B helping X. What was wrong was the law, and the indenturing of C to the cause. C was the forgotten man, the man who paid, "the man who never is thought of." "He is the victim of the reformer, social speculator and philanthropist…" – William Graham Sumner as adapted by Amity Shlaes in her book, The Forgotten Man.
So Alex,
It seems that you are saying, that if person X enters into an agreement to work for person Y, and person Y knowingly offers terms that benefit himself while at the same time exploiting person X, this is acceptable as long as person X doesn't know there's a better option. Is this correct?
It also seems that you're saying that if one person sees another person suffering and attempts to help in some way, then they are wrong. And in the sense that passing blanket laws tend to cause more problems than they solve, I am in agreement with you.
The Samoans are entitled to a higher minimum wage by virtue of their American citizenship. We are by virtue of our constitution, created equal. And the Samoans are no less equal than you, me, or anyone else.
You make the argument that people who want to help the Samoans from here have no right to do so because we are insulting them.
That's like saying that a woman being raped shouldn't be saved from her attacker because you would be insulting her. If she can't fight for herself then she deserves it.
The people of Samoa are being financially raped and all you've got to say is pretty much along the lines of "Mind your own business, if they can't or won't stand for themselves then who are you to speak up?"
God forbid the Samoans have the same level of financial freedom as any other hard working American group. And if one analyzes the arguments presented, it all goes back to the money.
How about the tuna company doing business in non-profit status? That would certainly solve the problem wouldn't it? Give the Samoans ownership of the canneries, and allow them to keep the profits from the sales. Would that go over very well? Of course not!!
Business doesn't want those people to control their own lives. They only want the Samoans to think they do. Paid slaves are still slaves. Only in this century, your masters don't give you the lash. They simply deny you the cash. And leave you starve or fend for yourself as best you can. The fact that their thousands of miles away is the very reason they're getting screwed. Out of sight, out of the collective mind.
So let me get this straight. In Samoa where the cost of living is considerably lower. Companies are exploiting people. While no one in the mainland of the US could live on only 4 bucks under the previously stated minimum wage, (Yes, I know it was less than $4. I rounded cause I can't remember the exact change.) it doesn't equate to exploitation. At my current salary of roughly 20 dollars an hour I am able to afford a fairly nice ranch house in the Atlanta metro area. Whereas, when I lived in Southern California that would barely have gotten me an apartment. Was I exploited while working in Southern Cali or is it just a difference in cost of living expenses? The same rule applies here with Samoa. Also if you only make minimum wage and have a family of 4. You are a loser! There is no reason in the world why one person who is the sole bread winner is working for minimum wage. Anyone with half a brain and even the slightest work ethic should be making well more than minimum wage after six months of combined work experiance in their lives. If they can't then they obviously aren't worth more than minimum wage. Go ahead, call me a hate monger, corporate puppet, or whatever you wish. You know I am right!
Benny, I gotta tell you, you've obviously never run a business. You see, business don't exist "to provide a service." Businesses exist to "to provide a service FOR PROFIT." It's not easy to manage a business, and corporations don't do it for charity. They do it in order to survive. You don't work for free, do you? No, you work because you feel your time and effort are worth the paycheck that you receive. If you make $30,000 a year, you better bet that your efforts are worth more than $30,000 a year to your employer. If I can't make a profit by hiring you, I WON'T HIRE YOU. Business leaders understand this, which is why 2,041 Samoans will now be out of a job. If you don't think you're getting paid enough, do more to earn more for your company. As you increase the price of labor, you make it more competitive to replace people with machines. The machines cost more upfront, but they don't go on strike, or lobby for a higher minimum wage. Unfair? To you, maybe, but it's reality, and it's what's fair to the business owner.
And by the way, PEOPLE are not things, but LABOR is. It's a service you provide to your employer. And, in a free market, you are free to negotiate that price with your employer. Not making enough money? Convince your boss that you're worth more, or quit. If that new car you want is too expensive, you can try to talk the dealer down, or walk away. He can't force you to take delivery of the car at any arbitrary price he wants you to pay. Likewise, you can't force an employer to pay his employees any arbitrary wage you want them to pay. Like the buyer at the car dealership, if the price is too high, they'll walk away.
I don't doubt your sincere interest in the welfare of your fellow man, but you must be able to understand second- and third-order effects of well-meant but poorly thought-out policies. Increasing the minimum wage simply drives low-skilled labor into unemployment.
And by the way, if you gave the cannery to the locals and let them keep "all the money" they made there, they'd probably be operating at a loss from day one and would bankrupt the cannery inside a year. If it was EASY to profitably run a business, more people would do it.
The new cannery could have been built right next to the old one in American Somoa and could have been profitable – even at the mandated minimum wage. $3.5 x 200 = $7000 an hour in wages at the old. The new factory employees 200 so 200 x 7.55 = $1450 an hour, over $5500 in savings an hour. Government is needed to intervene on the peoples behalf, or else Capital(Business) would be allowed to turn the masses into serfs, commoners, and slaves – again! Businessmen are in business to make money, the most amount possible for the least amount paid out- they have to, it is the nature of businesses who are responsible to shareholders, stockholders, and board members. Of course Business is going to argue against any sort of Minimum wage – it cuts into their profits. If Business had more Patriotism, more loyalty to Nation and Citizens we wouldn't be in this mess now would we? Why do we hold people to country loyalty,but then allow those same people (Who are citizens of America) to act so disloyal to our country and its constitution since the constitution starts with "We the people" not we busninessmen, lawyers, bankers, investors, lobbyists, or politicians. Wheres the loyalty to their fellow Americans?
Excellent post, Mr. Acosta!
Some conservatives should cut to the chase and announce that they prefer doing away with government entirely to revert to the "law of the jungle." After all, if the most rapacious predators are good enough for nature and we're a part of nature, then government insults nature. The ultimate libertarian philosophy!
Thank you for your post. This is exactly what I'm talking about. The central problem is that we think that earning your living revolves around money. We live in a society in which PROFIT is the ONLY ACCEPTABLE MOTIVATOR. This is the main issue I'm trying to bring to light.
Profit is the wrong motivator. Money is nothing more than a medium of exchange. However business and resource owners use money as a medium of control. People should not be forced to work for money.
And given the fact that the only value our money really has is the "good faith and credit of the United States Government", it's pretty easy to see that our money is actually worthless.
I have been advocating the automation of the US treasury and federal reserve. We have built wonderful tools specifically for the crunching of numbers.
The treasury and federal reserve have the job of producing our currency and then balancing the amount of it flowing in the system in order to maintain its value.
By nature money is supposed to be a limited resource which we used for the exchange of "stuff". Profit is the act of accumulating this virtual resource. The idea being that the more you accumulate the more freedom you have to get what you want an need.
However, if money is supposed to be a limited resource and businesses are sucking this resource out of our collective system to the tune of billions every day, then how is the system supposed to be sustained? Simple, all of those that have accumulated the lions share of this virtual resource simply uses it as a medium of control. Then human beings stop being human beings and become nothing more than labor.
Profit as a motive is exactly what is wrong with the system. An automated treasury and reserve system that prioritizes all citizens as being equal, can distribute this resource equally while still maintaining the value of the dollar. (Free of political/personal financial concerns)
When all citizens have equal buying power, we are free as individuals to develop our own talents and abilities for the good of our communities and ourselves.
I'm not saying that we need to get rid of money. Only that the profit motive turns money into a means of control that can be exerted on other human beings. This is fine if you have the cash. But it's unacceptable if you're the one having to do all the crap work because you "need the money" meanwhile the business owner gets to do what they want. And why? Because they own.
What I am suggesting doesn't devalue the dollar. All it does in decentralize human control and puts it in the hands of each citizen individually.
Human beings were not mean to live out their lives chasing money. You don't have to run a business to know that human beings are not commodities. And it's sad to see that there are people out there who still don't get it. We have the ability to give every citizen a truly level playing field. With everyone sharing an income from our collective prosperity, YOU DON'T HAVE TO HIRE ME. Because I wouldn't need your money. And you would have to pay me.
And now that this kind of thing is being talked about the "conditioned workers" and the money lovers try desperately to justify the subjugation of their fellows by saying that that's just the way the system works. And somehow that statement is supposed to make it all OK.
And thank you Ray :-)
This author never ceases to amaze me. This mind set has really turned me back into a democrat … which is too bad because for a while there i was all about conservative values of self-reliance and responsibility. However, now that i know democrats aren't oppose to those values … I kinda just see right-wing rhetoric as 'if your not rich its your own damn fault' and 'God helps those who help themselves'.
So 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. Welcome aboard! But, if you are poor and you just want to be not quite as poor … they hate you because they feel you are gaming the system at their expense. That 50 cent raise came out of their pockets. How dare you want more! If you want it then to pick yourself up by your own boot straps (like all of us did (they think they call came from poverty too)! 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.
Well i recant some of my views on her. I actually agree with her in letting states determine minimum wage. Diana, we are in total agreement there. And we also share the common view that Mississippi and New York falling under the same minimum-wage standard is ridiculous.
But thats where are agreements stop? Because unlike you Diana, I don't think exploitation is a win-win. How about an honest days wage for an honest days work? And that wage can be geo dependent … but it should put shoes on the kids feet no matter where it is. What about an economic system whose goal it is to serve humanity through innovation and incentives rather then serve its few oligarch masters through the creation and protection of astronomical wealth? What if the wealthiest most compensated people where those who created new companies and innovations rather then those who managed money.
What if the premium was on economic value and not on wealth but value?
Last point … Diana … when are you going to write an article about executive compensation? When all these big fortune 500 companies where in there hay-day, 50years ago for many of them, the average CEO compensation was between 20x and 40x that of the average worker. In 2008 (a bad year) according to Forbes the average CEO compensation of the S&P 500 was 10.8 million thats 250x the salary of the average American making (40k per year). I wonder if the maximum-wage also has an adverse economic effect?
"This author never ceases to amaze me."
And the ignorance of liberals never ceases to amaze me.
"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
"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.
"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.
"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.
"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.
The problem with the profit motive is two-fold. First, it forces all companies to be as dishonest as the most dishonest in their area. If your tuna competitor is hiring cheap labor in a foreign country, then you, too, have to hire cheap labor in a foreign country, or they'll sell their product for less than you and get more sales, and then their stock will go up higher, too, and more people will invest in them because they do better.
Second, it creates a positive feedback loop, where some profit can be used to exploit the government and manipulate legislation to favor certain companies by providing subsidies. Only the largest companies could possibly afford to buy these subsidies, raising the barrier to entry for your average business.
When an Honest Businessman can't make a living without cheating someone, there must be something terribly wrong. Of course the Honest Businessman would like to pay his employees enough wages for them to buy a house, own a car, put their kids through college. Of course he wants to provide the best health insurance, company picnics, and the like. But he's small business owner, and he doesn't get corporate tax cuts and subsidies like his competitors. He can't afford to offshore his labor costs. And so he is provided with a terrible choice – cheat and prosper, or struggle while maintaining your integrity.
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.
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.
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.
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.
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.
http://americansamoa.gov/news08/Letter-t o-US-Senator-Inouye.pdf
Another interesting reading and no talk of minimum wage here.
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.)
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.
Michael sorry about misspelling your name in the last post.
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.
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
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?
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.
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?
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.
"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.
"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???
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.
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…
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.
Or perhaps Dale, a system like the one in which we live helps your kind hide their weaknesses. If it weren't for the money you make you'd probably have no idea what to do with your life. I suppose I shouldn't take it the wrong way that a conditioned slave, would mock any attempt to achieve true freedom.
"it has NEVER been done. There have only been attempts."
You are arguing semantics. It has never been fully achieved because the attempts to get there have failed at every turn. I have no doubt that you and the leaders who have tried these types of governments in the past had good intentions, but as they say, the road to hell is paved with good intentions.
"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?"
Sigh… this is what I am talking about. The politicians and their liberal media mouthpieces have done an excellent job of brainwashing you sheep into believing that the current crisis is the result of the free market. They certainly aren't going to admit the truth, that it was entirely the government's fault that we are in this mess today, because that would potentially erode their power base instead of expanding it. We have not been in a completely free market system, we only have SOME elements of it. And everything that is going wrong in the economy can be traced back to areas that we have not allowed the free market to operate (see above article for one).
"And people like you who support the current financial system are the first to complain when things don't go your way."
I do not support the current financial system. I favor a true free market, not just some parts of one with massive gov't intervention screwing things up all the time, based primarily on collecting votes to increase their power.
"you would consider the idea of another person being truly equal to you a fantasy."
Where on earth are you getting that idea? I have said nothing of the sort. The "fantasy" is that you can devise and actually implement a gov't/economy that is based on equal distribution of wealth (for each according to his needs, from each according to his ability) and actually expect that it will work. Numerous variations of this fanciful scheme have been tried and they only lead to mass poverty and misery. It simply is not in sync with human nature for the vast majority of people. Why do you think it will suddenly start working now? Have you ever heard what Einstein called the definition of insanity? If every single person on earth were like Mother Teresa, it might be a different story.
Well then Dale,
This seems to be the point of contention. I do not in ANY way advocate a government financial system. Our financial system is simply a market place where people can exchange goods and services for an agreed upon price. Governments only role is supposed to be a regulatory one.
What I suggest is that the federal reserve and treasury be automated so as to fulfill their function of maintaining consistent level/value of money without political or commercial influence. If the system then distributed that money to each citizen equally enterprise and creativity can occur free of centralized control. For example what if everyone had access to easily portable non polluting energy generators to which they could connect their homes. Such a thing would be a great advantage to everyone and serve to save a great deal of money on central energy production.
Money is a resource just like energy. And if every one has it then efficiency and productivity increase.
But the profit motive actually FORCES dishonesty. Suppose you are an honest businessman and I am a dishonest one. And suppose I compete with you using less than honorable practices and gain market share over you.
If profit is the ONLY acceptable motivator then you are faced with two choices. Beat me at my own game and develop practices of your own to take market share from me (along the same dishonest lines), or play by the "rules" and go out of business.
The fact that has never actually been done is not merely semantics. It has never actually been done because the technology to implement such an efficient system simply didn't exist before now.
But computer technology already handles the processing of money so well that all I'm suggesting is that we take it to the next logical level and remove the human element from the management of this universally needed resource.
"the system then distributed that money to each citizen equally enterprise and creativity can occur free of centralized control."
Now you are just talking nonsense. If you did that, then who would do all the nasty, dirty, stressful, dangerous, and/or difficult jobs? Why would people subject themselves to anything unpleasant if their income would be the same no matter what? Why would anyone work long hours for no added benefit for themselves? Productivity would plummet to practically nothing.
"what if everyone had access to easily portable non polluting energy generators to which they could connect their homes."
There you are living in fantasyland again. While we are speculating, what if we all had magic genies in a lamp that would grant all our wishes?
"But the profit motive actually FORCES dishonesty."
No it doesn't. Among other benefits, it forces efficiency, quality, hard work, dedication, productivity, and most importantly- innovation.
"Suppose you are an honest businessman and I am a dishonest one. And suppose I compete with you using less than honorable practices and gain market share over you."
Stopping that is one of the very few roles for which we actually need government- law enforcement, protection of private property (from force and fraud), as well as a court system to resolve disputes. Without government in this role, we would end up like 3rd world countries.
"If profit is the ONLY acceptable motivator then you are faced with two choices. Beat me at my own game and develop practices of your own to take market share from me (along the same dishonest lines), or play by the "rules" and go out of business."
Are you trying to imply that every company that has been successful has only gotten that way by being dishonest??? None of them got there by being more efficient, providing better quality, and/or being more innovative than their competitors?
Dale, In reply to your post.
"Now you are just talking nonsense. If you did that, then who would do all the nasty, dirty, stressful, dangerous, and/or difficult jobs? Why would people subject themselves to anything unpleasant if their income would be the same no matter what? Why would anyone work long hours for no added benefit for themselves?"
This argument is exactly what I'm talking about. You're absolutely correct that no one would want to do the crap jobs. And isn't it nice that our educational system stresses the sciences and mathematics so that we can automate more and more of those jobs?
Your argument also states it clearly. No one would WANT to do these things. So why do we FORCE people to do them now. Do you think that housekeeping and building maintenance workers are rolling in cash? I'm sure they didn't take those jobs because they felt a spiritual calling to do so.
I stated to you:
"But the profit motive actually FORCES dishonesty."
And your reply was:
"No it doesn't. Among other benefits, it forces efficiency, quality, hard work, dedication, productivity, and most importantly- innovation. "
If the profit motive doesn't force dishonesty. Then why do we need regulators in a free market?
And what makes you think that productivity, efficiency, dedication, and innovation need to be forced?
Innovation comes by way of inspiration, which cannot be forced. Dedication comes from the knowledge that there is value in your efforts. Efficiency and quality come from the desire for excellence, and productivity comes from enthusiasm.
But your statement is telling in one important way. It illustrates your idea of money as means to control human behavior. It shows your acceptance of such use. As far as I can tell, you regard money as the magic carrot which motivates everyone to the greatest excellence.
But if that were true, then we wouldn't be in the financial mess we're in now, now would we?
And you can say that it's government interference. You can say it's corporate fraud, you can call it what ever you want. But the one thing you can't get away from is the fact that money in this society is not used solely as a medium of exchange as intended. It is used to control the poor and the working class.
"Are you trying to imply that every company that has been successful has only gotten that way by being dishonest??? None of them got there by being more efficient, providing better quality, and/or being more innovative than their competitors?"
Is it honest to pay someone to help you make something, and then sell the thing they helped make back to them at two to four times what it cost to make?
If I help you cook a lavish meal and you paid me five dollars, and you then charged me fifty dollars to eat it, is that fair? Or honest? Or just? But this is exactly how our economy works. We pay workers a small amount per hour to do a job and help in the overall production of what we as a society use. But then we sell that stuff to the same people who helped make it at ridiculously increased prices. This is called profit.
If you define innovation as improvements in advertising then yes there is a great deal of innovation going on.
If on the other hand you're talking about actual productive innovation, then the market place is full of examples in which the better products were squeezed out of the markets by companies with inferior products but superior financing.
Ultimately it doesn't matter if you like my idea or not. The root cause of every financial problem we have is the result of money being used to control rather than exchange. And as long as the ability to exchange remains in equal, those who have will always seek to exert control over those who don't. And like you they will always seek to justify their position in terms of merit on the part of the person.
So in your mind money will always be more important to you than your fellow man. And this is where we fundamentally disagree.
"If the profit motive doesn't force dishonesty. Then why do we need regulators in a free market?"
Profit motive may be the reason that people try to cheat/steal, but it doesn't FORCE it. There are many other options to make profit, which I posted below, which are also simultaneously beneficial for all of society. We need (limited) government law enforcement/regulators to try to prevent and deter the dishonest attempts.
With the system you are promoting, even with gov't stopping the dishonest activity, there is still no incentive for anyone to work harder, be more efficient, or try to be innovative, other than perhaps self-motivation. And people who are driven entirely by that are in the minority. This is why that system ultimately fails every single time. What would you do in your system with the lazy people who simply refuse to do any work whatsoever?
"And what makes you think that productivity, efficiency, dedication, and innovation need to be forced?"
Because it makes life better for everyone in society.
"you regard money as the magic carrot which motivates everyone to the greatest excellence."
That is because empirical evidence proves without a doubt that this is correct.
"But if that were true, then we wouldn't be in the financial mess we're in now, now would we?"
How are you getting that absurd conclusion? We are in this mess because of gov't interference for political gain. What does that have to do with profit motive?
"Innovation comes by way of inspiration, which cannot be forced."
It certainly can. Have you ever heard the term R&D? Companies spend billions on it, so that they can get an advantage over their competitors. If there were no profit motive, they would have no reason to spend this money.
"is it honest to pay someone to help you make something, and then sell the thing they helped make back to them at two to four times what it cost to make?"
Sure, as long as the person agrees to the deal and knows what he is getting into. If the price of the finished product isn't fair, then a competing company will undercut the 1st company and put them out of business. If the pay for the work isn't fair, then a competing company will steal their employees.
"If I help you cook a lavish meal and you paid me five dollars, and you then charged me fifty dollars to eat it, is that fair? Or honest? Or just?"
Sure, as long as I didn't put a gun to your head and force you to do the work. You are free to say no to doing the work or buying the meal. The key word is freedom.
"we fundamentally disagree."
You can disagree all you want, but actions speak louder than words. While socialism fails everywhere, free-market capitalism (even with the gov't interference holding it back) has made the US one of the most prosperous countries in history. This is despite only being around for a little over 200 yrs while many other countries have been around for thousands of yrs.
You said:
"Profit motive may be the reason that people try to cheat/steal, but it doesn't FORCE it. There are many other options to make profit, which I posted below, which are also simultaneously beneficial for all of society. We need (limited) government law enforcement/regulators to try to prevent and deter the dishonest attempts. "
So first you denied that there was a problem with profit motive. And now you acknowledge that profit does indeed provide incentive for dishonesty.
I said:
"And what makes you think that productivity, efficiency, dedication, and innovation need to be forced?"
And you said:
"Because it makes life better for everyone in society."
And this is the most telling point of your argument. Are you a businesses owner or a worker? You actually believe that FORCING someone to work (slavery) is good for society. And I bet that someone like you already knows just exactly what IS good for society.
No my friend, money and profit, when put above the human being in value, actually force stagnation and the withering of progress in many areas. Money doesn't make a good marriage. It doesn't teach your children the difference between right and wrong. There's a lot it doesn't do. And yet we value it so much more than each other.
Look at open source software if you want a really good example. Microsoft tried for YEARS to squeeze Linux out of the market place. Linux is free, there was no profit motive involved in making it. It is constantly developed by volunteers. It is true that there are paid developers out there but that's because this kind of work takes time and the only way to live here is to have money. If these people didn't need the money. Linux would already be leaps and bounds beyond Microsoft, Apple, Sun, etc… Linux systems are always under development and the markets can exert no real pressure on this side of IT. There are other examples of open collaboration and cooperation that don't include the profit motive.
"you regard money as the magic carrot which motivates everyone to the greatest excellence."
Your response:
"That is because empirical evidence proves without a doubt that this is correct."
If your statement is correct then why do we still have poor? They get paid to work just like anyone else right? If it has been empirically proven that money drives people to excellence then we should have no more poor.
The Madoffs and Stanfords of the world came about because of greed. Profit was the motivator for their crimes. Where is your empirical evidence of their excellence? Did profit motive make them more "excellent" criminals? And if they were so excellent then how did they get caught?You try to justify "free markets" but there is no such thing. That's why regulators must be in place. Because "free markets" breed corruption.
The reason you're wrong about free markets is because you have yet to reveal just how any system that requires a human subclass to function, is in any way good.
A fair day's pay for a fair day's work. I here that a lot. But this never happens. If it did, the house keeper would be making much more. So would the janitor. We live in a system where the people who do the important, necessary, and unpleasant tasks in society get the least respect and lowest pay. And yet the rest of society can't function without them.
You believe human beings should be forced to do what needs to be done. You believe that it's acceptable to apply control via money. You believe that it is acceptable for a human being to be denied health care, education, a home, or anything that helps make life easier, if they don't have the money.
You believe that people who don't value money as you do, do not deserve to live with respect and equal status in this country. And your remarks prove it.
This is why we disagree.
And I almost forgot
"But if that were true, then we wouldn't be in the financial mess we're in now, now would we?"
"How are you getting that absurd conclusion? We are in this mess because of gov't interference for political gain. What does that have to do with profit motive?"
Barney Frank is chairman of the house banking comity. You think he's not connected with wall street bankers? How about the energy, defense, agriculture, and various other comities? You don't think these politicians are connected? You don't think that they pass laws that benefit their own interests first? You don't think they're going to help their own stock portfolios first by helping those companies with favorable legislation?
Are you seriously telling me you don't see a connection? And are you seriously telling me that we are in the financial mess we're in because of government interference alone? Wall street had NOTHING to do with this mess? I understand that you think I'm naïve. But common man, please don't insult my intelligence.
"So first you denied that there was a problem with profit motive. And now you acknowledge that profit does indeed provide incentive for dishonesty."
Of course it can. But it is the illegal acts you should be villifying, not the incentive, because profit motive incentivizes much more good than evil. Would you say that "love" is a bad thing? Well, how about that woman that loved her daughter so much she killed another girl to help her daughter make the chearleading squad? Or how about the fan who loves his fav. sports team so much he pays off the ref? It is the acts that are the problem, not the underlying incentive emotion.
"You actually believe that FORCING someone to work (slavery) is good for society."
I never said anything of the sort. I believe in FREEDOM. The more the better (as long as someones behavior does not infringe upon someone elses).
"No my friend, money and profit, when put above the human being in value, actually force stagnation and the withering of progress in many areas."
You could not be more wrong. For 1 good example, google a study called "Rich States, Poor States" and you will see how the states that have the most economic freedom, also have the most prosperity for all its citizens. You can find similar studies on an international level.
"Money doesn't make a good marriage. It doesn't teach your children the difference between right and wrong. There's a lot it doesn't do."
And redistributing income won't help those issues either. These topics have nothing to do with the subject at hand.
"If your statement is correct then why do we still have poor?"
Any able-bodied & able-minded adult in the USA (a.k.a. "the land of opportunity") that is poor is poor because they choose to be. I have no problem with charity going to poor children, elderly, disabled, etc.. (in fact, I contribute to charities for those causes myself). And the "poor" in this country would usually be considered very wealthy in many countries around the world that don't have economic freedom.
"A fair day's pay for a fair day's work."
I don't believe in that nonsense. My belief is "a market-value based day's pay for whatever job is done that day." The value of labor for a certain task is worth whatever someone else is willing to pay for it. Nothing more, nothing less. If A wants to pay B to do a certain job and B agrees, it is none of your business or the government's.
"You believe that it is acceptable for a human being to be denied health care, education, a home, or anything that helps make life easier, if they don't have the money."
Please point out where people have a right to any of those things in the constitution? For someone to have a "right" to a home that they haven't earned, for example, then someone else must be FORCED to give up something they have earned to pay for it. Weren't you against slavery, you hypocrit?
"You believe that people who don't value money as you do, do not deserve to live with respect and equal status in this country."
I don't believe anything of the sort. Where are you getting this garbage?
"Wall street had NOTHING to do with this mess? "
They took what they were given, certainly. But the problem was that the government inteference removed key free-market elements that would have prevented them from gaming the system. In a true free market, it wouldn't have mattered how greedy wall street was. They could not have done what they did without breaking laws, for which they would have risked severe punishment.
And you never answered my earlier question- What would your system do with people who refused to work on ANY job? Personally, I like my job fairly well, and I'm definitely not lazy (I graduated college top of my class with a 4.0 GPA, & I doubt a lazy person could do that). But even I would quit my job and retire to a life of leisure, spending time with family/friends, traveling, etc.. if I won the lottery or something and no longer had any incentive to work. How would that be handled in your la-la fantasy land?
Ms. Pelosi and others were not concerned when unskilled
jobs went from the us to other countries and we are
trying to make all things even.
If 7.25 is basic enough for us then the rest of the
world should be at 7.25 also
Thank you for the post – It is right on point! Most of the people that commented on this have no clue what or where American Samoa is. Someone mentioned a population of 3.2 million? Our population is only 70,000+, and for people's information, our islands are located in the middle of the South Pacific. The ONLY resource that we have are the oceans as we have mountainous volcanic islands – so there is not enough flat lands for agricultural purposes. The ONLY export that we have is canned tuna – IF you take the canned tunas away, our economy is doomed! We don't have anything else to export, and being that we are heavily dependent on imported goods – cost of living will skyrocket as we will need to pay higher shipping/ freight rates since the vessels will not have anything to carry back out of American Samoa. Most if not all American Samoans that live on American Samoa NEVER asked for this increasing minimum wage – this is a classic example of colonialism where such mandate will devastate the American Samoa economy and we can't do anything about it as it is dictated by the federal government!
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[…] This articledetails of how American Samoa's economy (a US territory) actually reacted to what is generally considered abstract economic theory. The minimum wage there in 2007 was $3.76 but legislation was passed raising it to $7.25 by July 2009. Many people (2,041 or 12%) are employed by Chicken of the Sea (CotS) canning tuna while another 2,700 are employed by Starkist (CotS' competitor). […]
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