Minimum Wage, Part 7
Persistent misreporting about H.R. 2 and the "Samoan tuna" exemption
27 Jan 2007 in Regulatory Economics, Legislation, People & Institutions
Today's Wall Street Journal includes an op-ed alleging a connection between H.R. 2 (the House minimum wage bill), institutionalized corruption within industry and government on American Samoa, and Speaker Nancy Pelosi. As we reported in an earlier post, it has been widely alleged that Pelosi ordered that H.R. 2 be altered to exempt American Samoa from the proposed increase in the federal minimum wage to benefit StarKist and Del Monte, firms that have significant interests in American Samoa but which are headquartered in Pelosi's district.
We also reported that the existence of this "Samoan tuna" exemption is not supported by the text of H.R. 2, nor is it supported by the text of any of the minimum wage bills proposed during the 109th Congress. Neutral Source can't comment authoritatively on Zimmerman's reporting of corruption and slave-trading in American Samoa. However, we can correct the record concerning what H.R. 2 says and doesn't say.
The op-ed by Malia Zimmerman, president of Hawaii Reporter, implies a connection between Speaker Pelosi and civil violations of labor laws and criminal acts to enslave Asian garment workers. This allegation is unsupported by any facts provided by Zimmerman.
Neutral Source previously reported that H.R. 2 is silent with respect to U.S. territories Puerto Rico, American Samoa, and the U.S. Virgin Islands. We also reported that this silence is not unique to H.R. 2. For example, every minimum wage bill proposed during the 109th Congress was silent about these U.S. territories. The text of H.R. 2 is almost identical. Thus, if the absence of provisions affecting American Samoa in H.R. 2 are construed as a "loophole," it is a longstanding one that previously generated no controversy.
H.R. 2 is distinguished because it does make the federal minimum wage apply to the the Commonwealth of the Northern Mariana Islands (CNMI), with a transition period for that adjustment. But this provision is not unique to H.R. 2, either. We counted five bills proposed in the 109th Congress (S. 1062, H.R. 2429, H.R. 3413, and H.R. 5787, and H.R. 5550) that would have made the federal minimum wage applicable to the CNMI after a short transition period.
Under current law, Puerto Rico, American Samoa, and the U.S. Virgin Islands are exempt from the direct application of the federal minimum wage. This exemption is found in 26 U.S.C. 206(a). The Department of Labor sets minimum wages in these territories by regulation. To the extent that U.S. territorial minimum wages are below the federal level, it is the result of decisions made by DOL in these rulemaking procedures.
Nothing in H.R. 2 would change the policy or practice of setting minimum wages in American Samoa or the other listed U.S. territories. Thus, it is false to assert the existence of an exemption for American Samoa based on any published version of the text of H.R. 2 or any of its predecessors.
In her op-ed, Zimmerman says "Nancy Pelosi led the effort in the U.S. House during her first week as speaker to increase the minimum wage," but "[i]n the process she ensured that American Samoa, a U.S. territory, is exempt from the wage hike." It is certainly possible that Pelosi acted behind the scenes to ensure that the statutory status quo was not changed, and it's possible that if she did so it would have been at the behest of or to benefit StarKist or Del Monte. But Zimmerman cannot credibly reach this conclusion from the evidence she cites, because she cites none.
In response to criticism, some of it of a partisan nature, Pelosi vowed "to make sure that all of the territories have to comply with U.S. law on the minimum wage." Zimmerman alleges that despite this promise Pelosi cynically allowed the (nonexistent) American Samoa exemption to be "carried over into the final legislation." This, too, is false. H.R. 2 was passed by the House on January 10. Pelosi issued her promise on January 12.
Most of Zimmerman's column concerns criminal acts committed by a Korean national convicted of civil labor law violations and the crime of holding holding people in involuntary servitude (i.e., slavery) over a two year period. The only connection between this case and Speaker Pelosi appears to be her alleged advocacy of a nonexistent exemption for American Samoa in H.R. 2, and the fact that StarKist and Del Monte are district constituents.
Based on this evidentiary foundation, Zimmerman characterizes Pelosi as "ethically challenged."
