House Speaker Nancy Pelosi yesterday said Democrats will close a loophole in the House-passed minimum wage increase that exempts American Samoa -- an action taken after it was revealed that one of the U.S. territory's main employers is based in her congressional district.
"I have asked the Education and Labor Committee as they go forward with the legislation to make sure that all of the territories have to comply with U.S. law on the minimum wage," Mrs. Pelosi said.
The decision follows criticism over the exemption, reported earlier this week by The Washington Times, to allow tuna canneries in American Samoa to continue paying $3.26 an hour -- nearly $4 less than the $7.25 minimum wage passed by the House Wednesday.
Republicans, after the vote, pointed out that StarKist Tuna, one of two companies that employs about 75 percent of the Samoan work force, is owned by Del Monte, which is headquartered in Mrs. Pelosi's San Francisco district.
"Simply put: It is unethical to provide a special benefit to a company in any member of Congress' hometown," said Rep. John B. Shadegg, Arizona Republican. "For Democrats to act in such a manner so early on in their tenure is hypocritical at best and criminal at worst."
Democrats involved in the legislation say that neither Del Monte nor StarKist has lobbied Mrs. Pelosi or the committee on the matter. And records show that while Del Monte political action committees have given $5,300 in the past five years to Republicans, neither they nor Del Monte executives have given to any Democrats.
The bill, which raises the federal minimum wage $2.10 from $5.15, pointedly extends for the first time the federal minimum wage to the Northern Marianas Islands, another U.S. territory in the Pacific with similarly low wages.
Democrats defended the exemption earlier in the week, saying that the Northern Marianas territory has a long history of work-force abuses that require immediate action. But they also acknowledged that the wages in both places are essentially the same and, they said, need to be raised.
One person who is concerned about enforcing the federal minimum wage in American Samoa is non-voting Rep. Eni Faleomavaega, who echoed the arguments of many conservatives against raising the minimum wage in poorer regions of the U.S. mainland.
A "decrease in production or departure of one or both of the two canneries in American Samoa could devastate the local economy, resulting in massive layoffs and insurmountable financial difficulties," he said in a statement provided to The Times.
"The truth is the global tuna industry is so competitive that it is no longer possible for the federal government to demand mainland minimum wage rates for American Samoa without causing the collapse of our economy and making us welfare wards of the federal government."
Melissa Murphy Brown, vice president for Del Monte, warned in a statement yesterday that applying the minimum wage at the tuna packing plants in American Samoa would "severely cripple the local economy."
"For over 50 years, the Federal Department of Labor has provided that wages in U.S. territories, including American Samoa, be set by a federally appointed wage board, following public hearings," she said in a background statement compiled by StarKist and Chicken of the Sea.
"The wage board takes into accounts several factors including standards of living and recognizes that wages cannot increase to a level that substantially curtails employment."
House Majority Leader Steny H. Hoyer, Maryland Democrat, said on the House floor yesterday that the decision to exempt American Samoa "was not an oversight."
"The minimum wage in America Samoa, unlike the Marianas or Guam, is set by the Department of Labor and Industry Committee so that it is determined in a different way than the others, including our states," he said.
Wages paid in American Samoa are often lower than the $3.05 minimum wage in effect in the Northern Marianas. Wages in American Samoa for manual labor range from $2.70 up to about $3.60, according to the U.S. Department of Labor.