- The Washington Times - Monday, October 18, 2010

Just three years after a Democrat-led Congress imposed the federal minimum wage on two U.S. territories in the Pacific, lawmakers last month halted the program in its tracks, acknowledging the move had sapped thousands of jobs from American Samoa and the commonwealth of the Northern Mariana Islands.

The two-year delay in the case of American Samoa and one-year reprieve for the Northern Mariana Islands was imposed even as both parties have sparred over the effects of the minimum wage in the U.S. during the troubled economy.

“We said this increase would be harmful in 2007, and the Democrats did it anyway,” said Rep. Patrick T. McHenry, North Carolina Republican. “It proves our point that the federal government setting wage rates is destructive to job creation, whether it’s in American Samoa or western North Carolina.”

The story is a complicated study in political pressure, lawmaking and unintended consequences. It began just after Democrats took control of both chambers of Congress in early 2007.

The first order of business was trying to raise the federal minimum wage from $5.15 to $7.25 per hour, and to extend the wage level to include the Northern Mariana Islands to combat reports of labor abuses there.

That would have left American Samoa as the only territory outside the federal minimum-wage rules, and the GOP said Democrats were playing favorites. Under pressure, Democrats included both territories, and the legislation passed as part of an emergency spending bill.

In the three years since, some American Samoan employers have closed shop and shed thousands of jobs, and the wage increase was a factor contributing to job losses in the Northern Mariana Islands, according to the Government Accountability Office. The office, Congress‘ watchdog agency, was charged with reviewing the results of the raised wage.

Mr. McHenry said blame for the job losses rests at the feet of House Speaker Nancy Pelosi, California Democrat. He said Mrs. Pelosi insisted on pushing through the legislation.

Democrats, including Mrs. Pelosi’s lieutenants, instead pointed a finger at Rep. Mark Steven Kirk, the Illinois Republican who forced American Samoa to be included along with the Northern Mariana Islands.

Mr. Kirk’s office didn’t respond to repeated phone calls or a detailed e-mail seeking comment on his role.

In an ironic twist, he is the GOP’s nominee for Mr. Obama’s former Senate seat, and the Democratic Senatorial Campaign Committee has attacked Mr. Kirk for having voted against minimum-wage increases on five other occasions.

It’s one of a series of congressional races in which the minimum wage has become a hot-button campaign issue.

A handful of Republican Senate candidates have questioned whether the federal minimum wage is constitutional, and Democrats have argued that the GOP is showing hostility toward workers.

While Congress approved the wage increase in 2007, it let the raise be phased in over two years, so the final 70-cent jump to $7.25 an hour didn’t happen until July 2009 - just as the economy was ending 18 months of recession.

Some economists blame the minimum wage for costing hundreds of thousands of jobs, while defenders argue that it has created stability for millions of workers.

Story Continues →