The State of Minimum Wage

The New York Times’ States Take Lead in Push to Raise Minimum Wages details (as the headline implies) how the US federal government is behind individual states in increasing minimum wages. The federal minimum wage currently stands at $5.15 an hour, raised in 1997 from $4.75. Here in New York state, the minimum wage just increased to $6.75, and will increase again on January 1, 2007 to $7.15. Washington state enforces the nation’s highest minimum wage at $7.35 per hour (plus the “rate [is] adjusted for inflation”).

Despite the Times’ optimism*, the wage figures really aren’t that sunny. 26 states have a minimum wage that match the federal minimum, 2 states have a minimum wage that are below the federal standard, and 6 states have no minimum wage law at all -– meaning that only 16 states exceed the Federal standards.

Even worse (and now I’m really bursting this “positive left blog” mission) are the minimum wages in "American territories." The Department of Labor states that:

Minimum wage rates in American Samoa are set by a special industry committee [read: corporate lobbyists] appointed by the U.S. Department of Labor, as required by [The Fair Labor Standards Act]. The rates are set for particular industries, not for an employee's particular occupation. The rates are minimum rates; an employer may choose to pay an employee at a rate higher than the rate(s) for its industry [but why would they?].

Wages in American Samoa range from $2.57 per hour to $4.09, depending on the industry. Goods manufactured there can be legally marketed as “Made in the USA” -- it is, after all, a US territory. Similarly, the American Commonwealth of the Northern Mariana Islands (CNMI) has a minimum hourly wage of $3.05.** (Puerto Rico and Guam match the federal minimum wage, while the US Virgin Island fall below it, although the DOL says they match the federal minimum "in practice.")

Now, if you were a money hungry, mega-corporation interested in keeping shareholders while appearing patriotic to the public, would you manufacture your t-shirts in Washington state ($7.35) or American Samoa ($2.68)?

Remember, you’re a corporation and therefore have no soul.

OK, maybe that's a bit harsh. But I’ll wrap things up by quoting the Times' article (emphasis mine):

Opinion polls show wide public support for an increase in the federal minimum wage, which falls far short of the income needed to place a family at the federal poverty level. Even the chairman of Wal-Mart has endorsed an increase, saying that a worker earning the minimum wage cannot afford to shop at his stores. ***

---
*Following Jayson Blair and Judy Miller, optimism is the one of the few things going for them.

** Or, $3.15, depending on the source. More on working conditions in CNMI .
Additionally, here's an excerpt from the the cover piece in Islands Business, "The Pacific islands region’s leading current affairs and business magazine published monthly":

Partially independent from the United States, but ultimately completely
dependent on it, the Northern Marianas is an unhappy country. The locals are outnumbered by foreign “guest workers” and suspect Asian businessmen. The garment industry has collapsed and tourism figures dived when Japan Air Lines ended flights to it from Japan, the key tourism market, a few months ago.

The ineffective government is broke and in December could not buy the fuel needed for power stations. Saipan, the main island, was being hit by constant blackouts as power stations were shut down. The government is sueing for US$100 million it claims it is owed by the United States government. The outlook for Northern Marianas? Bleak.

***The chairman further noted that Wal-Mart is running a blue light special on irony.