More Evils of the Minimum Wage

This story came across my Twitter feed today:

Sen. Johnny Isakson, R-Ga., led the Georgia delegation’s efforts to boost the $4.76 hourly wage in the tiny Pacific island territory. That’s because two tuna-processing plants there compete with Chicken of the Sea International’s plant in Lyons, Ga.

“The artificially lower wages in American Samoa provide employers there with a competitive advantage over Georgia job creators,” he said. “This puts jobs for Georgians employed at the Chicken of the Sea tuna cannery in Lyons at risk and could potentially hamper growth in this industry.”

I praise Sen. Isakson for his knowledge of economics, but I am distraught he decided to use it for evil rather than good.  He is right that raising the wage in American Samoa would make the Georgia processing plants relatively less expensive (because the alternatives  are now relatively more expensive), but this is a key example of how minimum wage harms the poor, not helps them.  American Samoaians (who are considerably poorer than Georgians) are facing job losses and reduced economic activity in order to protect the cannery jobs in Georgia.

Sen. Isakson’s tactic hearkens back to the original reason for the minimum wage: to protect white laborers from “unfair competition” from cheap black labor in the South.

The minimum wage isn’t about helping the poor.  It’s about protecting special interests.

HT: Mark Perry

One thought on “More Evils of the Minimum Wage

  1. From the article: “Hourly wages average $1.25 in Thailand, the largest competitor for American tuna production.”

    The sensible solution, then, would be for Congress to raise the min wage in Thailand instead of American Samoa.

    This isn’t the first time raising the min wage in American Samoa has destroyed employment opportunities there. It’s obvious that no one actually represents the best interests of those folks.

    If raising the min wage in A.S. is bad, why is it a good thing anywhere else?

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