Good. These are some of the worst paying jobs in the country.. because they have used migrants to solve their labor problem, removing the need for them to compete for workers.
They need to raise their wages, pay what it really costs for labor.
And as a bonus, the increased costs will provide an incentive for future automation.
I don't entirely disagree but I also suspect that many Americans would be shocked by the cost of food if workers were paid higher wages (especially if it was done for everyone who touches your food as it travels from the farm to the table) and that most farmers would prefer a phased approach to reform so that crops aren't rotting in the fields.
Last time I did this (estimating only the price on the actual farm labor though), I figured out that paying cabbage or lettuce-pickers $20 per hour would result in the farmer paying less than 5 cents more per head, on something that retails in the grocery store for $2.50 or more.
Even if you multiply the cost by 5 to cover markup as it goes through the chain (of distribution), you have... $2.50 going to $2.75, or ten percent more at retail. Not shocking.
How in the world did you get your numbers? Can I see some math please?
For full disclosure: I've worked about 15 years in hospitality industry and have quite a few work acquaintances in supply chain, as well as chefs and restauranteurs.
Most folks that are commenting here are living in la-la land with some of the absolutely absurd math and opinion that do not tie into reality.
Lets get some baselines going before I unpack the horse shit being said here.
1. Which agricultural concentration has the most migrant/day laborers? Citrus[0] and other labor intensive crops (sugar cane, corn, cotton, etc.) hire the majority of migrant labor. Majority (78%)[1] of seasonal agricultural jobs are performed by folks who are not from the Unite States.
2. What is the average profit margin, per acre, for agricultural farms (that sells for human consumption)? It's shit [2] - like most freaking farms are barely making it...Farms that have a GCFI (Gross Cash Farm Income) of 5,000,000+ should be doing well, however, about 25% of them are in the critical zone of going out of business. Farms with a GCFI less then 500,000. But hey, maybe that government agency has their head up their ass and don't know shit. Lets take a look at studies by Purdue University and Department of Agriculture and Consumer Economics University of Illinois[4]. To make life easier, heres a summary: according to Purdue estimates, on average, farmland has $114 to $227 return per acre. University of Illinois project returns from $200 to $100 per acre.
3. What is the general wage for Migrant Worker? From [5] this study on an orange farm,workeers can expect $16.92/hr that operate machinery and $13.75/hr for general purpose.
4. What percent of overhead is labor? [5] Page 9. Labor accounts for 41% of overhead for an orange farm. This is a industry standard for all labor intensive agriculture production [6], which are listed as: fruits, vegetables, and nursery products.
Great, now that we have some baselines. Lets dig into some math.
According to a previously mentioned study [5], an orange farm that has been established for 10+ years can expect 550 packed cartons of oranges, that weight 37.5 pounds. This represents 80% of the annual crop. The rest of the crop is used for juices and fillers. That 20% accounts for an astronomic $0 return. In most cases, breaking even is considered a win.
Focusing on the 80% of the crop that does bring in money, what are the economics? (this is taken from Ref Doc #5, page 22) It's shit! How shit? well, if the average cost of a carton of oranges is $12 and you gather 700 cartons per acre, your NET RETURN PER ACRO ABOVE TOTAL COST is -1,156...huh? Wait, you just lost money...
How about if we take that number up a notch and sell our beautiful oranges at $15/carton? Well, on 700 cartons gathered per acre you have now achieved profitability of 944 per acre.
But how does this affect the consumer? Well, my curious conversant, a 5lb bag of Navel Oranges is currently selling for $6.48 at Walmart[7]. For comparison, a store in Illinois is selling 4lb bags of oranges for $3/per[8].
So a carton of oranges is being sold, at the highest range of the study [5] is $15/carton. A carton is 37.5 pounds, which means I can get a bit more then 9 bags of 4lb orange bags, that I will sell for $3/per. Which means I will generate a gross of $27/carton.
After reading this, please, do tell me again, how raising wages to $20/hr is going to cause lettuce to go from 2.50 to 2.75?
Worst case scenario: each head is handled total for about 15 seconds, from cutting or pulling it off its stalk on the ground, quickly removing loose leaves, placing in bag, then sealing the bag and putting into boxes placed on skids.
Thus we have (rounding up, allowing for breaks, turns etc.) 20 seconds per head, 3 per minute, 180 per hour.
$8 / 180 = 4.4 cents of labor per head.
$20 / 180 = 11.11
OK, I am off in what I remember ... about 7 extra cents per head of lettuce vs. my remembered 5 cents.
A ten percent increase across an entire grocery bill might be more noticeable though. Likewise with the cost of eating at a restaurant if all workers are paid more (i.e. the $15/hour movement).
Personally I am not opposed to paying the actual costs instead using immigration and government subsidies of crops like soybeans and corn to lower the costs for some farmers.
most farmers would prefer a phased approach to reform so that crops aren't rotting in the fields.
I think everyone would prefer that.. but this is a problem the farmers created themselves. They've been using migrants for so long, that they've created a substantial difference in pay between themselves and the rest of the labor market. And with a sudden change in the supply of migrants, they're now trying to figure out what that difference is--what the true cost of labor is for their industry.
If they never relied on migrants, they would already know the answer to this question.
> many Americans would be shocked by the cost of food if workers were paid higher wages
How do you explain why its so much cheaper to buy quality food in European countries?
When I am in France or Austria, quality butter, eggs, fresh egg pasta, salami, and milk are all very inexpensive. Quality cultured butter in the US is especially expensive. (Mache in the US is also extremely expensive compared to France but that's a demand thing afaik. I don't remember the price diff of spinach.) Even Switzerland had better prices than the US when I was there for quality animal products.
In 2014 the US was spending ~ 6.5% of household expenditure on food, on the lower end compared to the listed European nations (Germany, France, Italy, and Greece in particular).
There are many other links with a similar premise.
My own travels have taken me to Spain, Denmark, France, Germany, England, Australia, New Zealand, Vietnam, and Canada - other than Vietnam I've always found prices to be comparable or greater than in the US. Obviously the cost is influenced by what you are buying, what is in season, and where you are a shopping. YMMV though!
I looked up cultured butter to see what it is. Eeew. Cultured butter is butter that has a strep infection.
If you buy products that normal Americans do not wish to buy, they will of course be expensive. I think your definition of "quality" is something like "as sold in Europe" or possibly "organic".
Stores seek to offer both affordable products and aspirational products. If there is no legitimate way to offer a better product than the standard one, some nonsense will be created. You'll get a fancy wrapper, arbitrary restrictions on how the product is made, and so on.
For this reason, you can get specially marked non-GMO salt. It's salt. Of course it doesn't contain genetically modified organisms! You are still welcome to pay extra for it.
> I once read it would add 2 cents to the cost of a box of cereal to pay farm workers better.
Well, clearly you can pay them better with an even smaller increase, it's just a question of how much better; without quantifying that, commenting about how much the cost increase would be to achieve it is meaningless.
Of course, in any case, farm workers aren't the whole cost of labor in the farm-to-shelf pipeline, either.
Other than being pedantic, do you have a concrete point? Are you generally agreeing or disagreeing that we could pay them better without seeing some huge spike in food prices?
I agree with this from a perspective that we've depressed the industry for so long with artificially low rates. This has exacerbated the problem and now we have a much more expensive problem than what we would have had. (We've also have been suffering the consequences culturally, economically, and on a QOL basis of this. [There are people that should have been getting skilled in this.. but we don't have the time and experience from doing that])
That being said, due to the currency leveraging, many central American economies, cultures, and peoples have suffered from the illegal immigration as well.
Exactly. If the Koreans and Japanese can farm their farms and feed their pops. despite tight labor markets, depop of rural areas and expensive labor, we can do it too.
In addition, higher prices might make us less wasteful. What is it, 30% of food ends up in the rubbish bin?
Worth pointing out that rapidly rising food prices are often drivers of civil unrest and inflation-combating monetary policy.
Slow rises are fine, the economy will adjust, fast rises, say from eliminating a large portion of the workforce at once, will cause much more disturbances in the economy.
That's a good point. In this case i don't see the prices rising much above the price of organics. In addition, the slice of people's income taken by food is small relative to places where price increases lead to unrest.
I'm wondering if higher wages would end up happening in practice. It's entirely possible that if labor costs go up here, it will make produce farmed elsewhere (Mexico, Central America, even overseas) more price competitive. I think trade is more likely to occur before automation. Harvesting many things is quite difficult from a robotics standpoint, every fruit/vegetable is slightly different and requires rather fine grained feedback systems to ensure you don't bruise the thing. Not impossible, but not easy/cheap.
It's also hard to recruit workers to a gig that's temporary and seasonal. That can maybe be made up for in wages though.
I'm also curious about where the labor is required. Corn/wheat is mostly a machine based harvest, I assume there are few migrant workers there but I don't know. Is there analysis on where migrants end up on the value chain of farm products?
Also, while there's some talk of undocumented immigrants, I think there's also a legal seasonal-labor system in the US. Trump famously uses it to staff Mar-a-lago. How many migrant farm workers are under that system?
A portion of those migrants will start a farm back home and start exporting it back. This will just drive up exports and do nothing to increase wages.
Depending on another country for food puts more risk on national security.
Increased labor costs provide an incentive to reduce labor costs. When labor costs are higher than automation costs, there's an incentive to automate.
If you consider the existence of human labor undesirable then automation is always good.
If you consider jobs the end-goal of human existence then automation is always bad.
In all likelihood you're somewhere in between those, and whether automation is good or not depends on external factors. GP seems to lean more towards the "human labor is bad" side.
GP seems to lean more towards the "human labor is bad" side.
Actually no. But farmers have created a special problem for themselves:
In a normal industry, wages increase and over a period of time, technology and techniques are developed to reduce the use of labor.. increasing labor productivity and controlling costs. This increased productivity is what allows firms to pay high wages.
In the farm industry, this hasn't occurred. Instead of increasing wages (and stimulating demand for new technology in their industry), they would simply hire more migrants to do the work instead. And so farmworkers are now almost entirely migrants. They've been doing this so long, that they've lost decades of small increases in labor productivity that would have normally occurred (and has occurred in virtually every other industry.. which they are competing with for labor).
So while part of the answer is to increase wages to attract US workers... increasing labor productivity is also required. I think farms would find it quite difficult to compete in the US labor market, while depending on practices that have not been modernized.
We know farm productivity can be increased.. where there's a real cost (the farmers themselves), plenty of tools have been created. But in the specific area of picking, migrants have been used instead.
They can try to soak up the shrinking pool of human laborers as new entrants avoid entering the field, because they don't want to compete with robots.
Or they can start building the robots.
If they don't seek productivity gains, a well-capitalized startup can eat their lunch by shoving productivity gains from other industries down the throats of agribusinesses. We already have robots that can differentiate between weeds and crops in a flat in the lab and kill the weeds by pounding them into the dirt.
It's going to start with rail-bound robots tending to niche specialty vegetables and pharmaceutical feedstock plants in hydroponic containers. It's going to end with cereal crop farmers committing suicide as the capital requirements for operating a competitive farm rise beyond their means.
maybe to those poor the current system was the best available way of making money? if it wasn't, surely they would find something better. have you asked them whether they were actually exploited or did you just assume?
Find something better? Are you one of those people who wonder why the oppressed don't "just do something about it"? I suppose we could organise a revolution. You go first.
'we'? wow, yet somehow you're free to broadcast your beliefs for all world to see.
it's funny you talk about a revolutiuon, since all revolutions ever did was take things that don't belong to revolutionaries and distribute them among them. are you sure you're oppressed and not just envious? maybe the more moral thing is to invest in self-improvement and find a better job?
For what it's worth, migrant harvest workers have always followed the harvest, in North American moving from north to south in the fall as the frost line moves southward with the season. "Migrant worker" often implies "foreign national", but not necessarily.
It's an inconvenient truth of the scaled up agriculture that produces food for us city folk.
Many European countries have formal guest-worker programs. A big consequence of the EU is easier guest-worker access and better working conditions.
The reason the USA immigration hassle never gets solved by congresscritters is this: it's convenient economically to have an underclass of workers with few rights and no recourse for mistreatment. Congresscritters have to say they're TRYING to solve the problem or they appear to be amoral. But they can't actually solve the problem without antagonizing the 1% who pay their re-election campaign bills. So the issue is a perennial theme of chin music. Both major US parties do this.
As painful as the current political environment is, some of these informal patronage relationships may be upset by Trump's inability to be cool about anything except his own industry (real estate). He'll happily throw the farming industry under the bus if it means a tax break for real estate investors and a few political points for being tough on "illegals".
Automation can fix this moving forward but ultimately the lost crops are a result of a bad business decision by the farmers to rely on an an undocumented underpaid labor force without thinking there would ever be any repercussions.
So let's hurt our own citizens for the benefit of other nationalities who are willing to demonstrate their disrespect for our laws, for the benefit of greedy business owners?
"Most americans are unwilling to work on farms..."
at the wages offered by farm owners!!! This is very similar to arguments trotted out in support of shitty H1B jobs. You want workers for your jobs? Increase the wages. Increased wages will make you raise the prices for your customers? Do so, or find the efficiencies in your business. Increased wages might drive consumers to produce grown in foreign countries? Have appropriate trade agreements protecting vital industries like agriculture, similar to what we have for defense (and after all, trade agreements are not a suicide pact (TM)).
> ultimately the lost crops are a result of a bad business decision by the farmers to rely on an an undocumented underpaid labor force without thinking there would ever be any repercussions.
Possibly, but it may also depend on how much the current political climate could have been foreseen. The reality is that it's been the status quo for decades, and there's been clemency for illegal immigrants that grants citizenship in the past.
Ultimately while it ended up being a bad decision, it might have been one that was considered an extremely safe one until everything changed. Sort of like buying a car with the assumption you'll still have a job next year. If you needed a car then it might have been good decision until all of a sudden it really wasn't.
How are you as a farmer going to be competitive when your fellow farmers are getting much cheaper labor?
This is an area for regulation (no one raised an eye when they got cheap labor) and economic incentives (NAFTA f'd over Central American economies, commodities market manipulation causes prices to skyrocket in developing markets - both causing mass migrations).
In two recent conversations I was told that the coyete[1] rates are $10,000 from El Salvador and $8,000 from Mexico. The Mexican fellow told me he wouldn't return to the US not only because the rates were high too but the smugglers now seem more menacing. The fellow used to perform home construction in the Bay Area. Incidentally, a recent report in the area cited labor shortages as the #2 road block in the SF builder industry.
The US administration seems to believe that our economic growth was cash constrained, hence the massive corporate tax cut. But for many industries growth is labor constrained.
[1] Colloquial phrase for Central American human traffickers.
> The US administration seems to believe that our economic growth was cash constrained
I'm not going to point fingers at anyone, but corporate cash levels were already hitting records before the tax cuts passed and money was already available at record-low interest rates. Anyone who thought our companies were cash-constrained was intentionally not paying attention.
Reminds of what happened in Alabama. Vice did a documentary on it. It was definitely eye opening. The only thing that scares me for this type of labor is the sheer amount of automation being done in farming.( They have these crazy lettuce cutting machines as well as sorting machines.)
>Alabama’s Failed Anti-Immigration Law
The state's experiment in "self-deportation" reveals what might happen if the US sent 11 million undocumented workers home.
Lettuce be honest. The end of slavery in the South was immediately replaced by slavery-like exploitation of second-class workers without enforceable rights. When a massive nationwide movement for equal civil rights finally made that non-viable a hundred years later, the farmers just did a global search-and-replace in their business plans from "black" to "foreign" and continued as usual.
Having zero abusable second-class workers would be more destructive. 150 years of dragging ass on modernizing their farming operations will come back and bite them all at once. But they probably won't learn their lesson and just use robots. They will beg and squeal for prisoner labor first. And then the cops will be ginning up bogus traffic offenses right before harvest time, so the people who can't pay the fines will have to pick vegetables instead.
> Vice did a documentary on it. It was definitely eye opening.
Come on. Vice documentaries are entertainment at best. I've enjoyed a couple of them myself but I would never use them to prop up my political arguments.
If you’re wondering what would happen if farm worker wages were raised, this article in The NY Times from 2011 might shed some light:
”For a typical household, a 40 percent increase in farm labor costs translates into a 3.6 percent increase in retail prices. If farm wages rose 40 percent, and this wage increase were passed on to consumers, average spending on fresh fruits and vegetables would rise about $15 a year, the cost of two movie tickets. However, for a typical seasonal farm worker, a 40 percent wage increase could raise earnings from $10,000 for 1,000 hours of work to $14,000 — lifting the wage above the federal poverty line.”
EU. People from Turkey, Greece, and other less-industrialized parts of the EU work as migrant harvest workers (and in other laborer jobs) in the more industrialzied parts. The northern EU countries have organized guest-worker programs.
America produces twice than it consumes. Will the farms suffer perhaps, will Americans starve? no. Should the farms adapt, Yes!
Hey I am not going to feel bad, that McDonald does not have a Dollar Menu any more. May be the market forces are the right medicine for the "obesity" problems America is facing.
Hmm, well let's analyze it. So from your link in 2011:
In Kathy Lohr's report, she spoke to R.T. Stanley Jr., a farmer who says he can't hire locals to do the job:
Stanley says experienced workers can earn as much as $200 a day. He says he's tried to hire locals to do the job — working in the fields eight hours or more clipping, bending and lifting in the oppressive Georgia heat.
"They just don't want to do this hard work. And they'll tell you right quick," he says. "I have 'em to come out and work for two hours and they said, 'I'm not doing this. It's too hard.' "
For Stanley, finding workers is already tough enough and he says the new restrictions are likely to make it worse.
"I got my livelihood on the line," he says. "If I don't harvest these onions, I'll lose my farm."
So first of all let's be honest about that $200 a day figure, they're being paid by how much they harvest. $200 a day is basically never going to happen, it's a dream figure, no onion farmer in america is paying $200/day to pick onions.
In fact at Stanley's Farm you're going to be making a whole lot less than that, from 2013:
The plaintiffs say Stanley Farms paid them less than minimum wage over the last three years and illegally cut their wages. The plaintiffs said they also worked alongside pickers who had work permits and who were paid more money than what American workers received
“We see this repeatedly,” said plaintiff’s attorney Dawson Morton. “Farms complain that no local workers are available. But when they do hire local workers, they don’t pay them fairly and don’t offer them the same pay as their foreign workers. It’s illegal and discourages American workers from continuing in agriculture.”
The suit claims the workers were paid 40 cents for each 5-gallon bucket of onions picked, while foreign workers received more than $9 a hour. Workers also had to purchase work tools from the company, the suit says.
$0.40 for a 5-gallon bucket, so to get to that $200 figure you only need to pick... 2,500 lbs of onions! Every day! Easy!
And then later in 2014:
A judge on Monday approved the agreement. The Atlanta Journal-Constitution states that Stanley Farms agreed to pay $92,500, with $82,500 going to back wages and damages and $10,000 going to attorney’s fees and costs. The company also agreed to follow specific hiring and employment practices that were outlined in the agreement.
“We’re pleased with the resolution reached, and we’re pleased that the farm is agreeing to pay U.S. and foreign workers the same amount, which we don’t believe they were doing,” said Dawson Morton, a lawyer for the workers. “That should reduce the exclusion of U.S. workers from Vidalia onion work and we hope assure equal treatment and equal pay.”
The American workers and their former co-workers filed a lawsuit last year that claimed that American farmworkers were paid less than the minimum wage of $7.25 an hour while foreign guest workers were paid between $9.11 and $9.38 an hour.
That same articles states that they now follow certain guidelines like making sure there are enough seats for workers on transportation, that the transportation is properly inspected and insured, that workers can't go into fields until at least 24 hours after application of certain chemicals and that they'll provide tools.
So what kind of farm was Stanley actually running when that article was written? Well it's obvious he was paying less than minimum wage to americans and more to illegal immigrants so that he could have an all immigrant workforce so that he could skimp on labor protections. And after doing this for years and years he settles for less than $100,000. This is the problem with american farming. If Mr. Staley had ever actually tried paying americans $200/day and had provided a safe work environment I'm sure workers would have been lined up. It's a pervasive lie that americans won't do farm work for good wages.
There may not be a shortage but people would buy less of that produce, prices would go up to cover the higher wages. Unless you subsidize aggressively. Tricky market since people need food to survive.
Cheaper CoL, that's why importing cheap goods from cheap countries and focusing on technology is the bet one should place. That way you have time and resources to spent developing the technology for automating everything. It's like a business, the butcher is not out in the field with the cows he just butchers, separation of concerns.
I personally do not care. Selecting migrants based of their value for the agriculture industry is about the worst thing a nation can do itself. Let's hope that constraints breed creativity and industry invests in automation. I think the government should do more to support farmer automation... especially when it's been proven to be effective like for dairy.
(I come from a family of farmers... going up my family tree there are been nothing but farmers)
Since the job doesn't require any specialization (which could take years to master and thus might cause a shortage), it should be easy to fill such positions from the large unemployment pool if employers started paying more to compensate for the missing Mexicans.
But it's only a shortage of people willing to do the work at shitty prices.
Almost the same thing happened in UK after Brexit. The atmosphere was so poisonous against them, that the EE workers did not return in the normal amount, so that all farms that rely on them for cheap picking are suffering.
If only there were some sort of market mechanism that would incentivize legal US citizens to perform these jobs, in order to spare these suffering crops.
I think the problem in the UK is that this kind of work has become monopolised by gang-masters who have an interest in recruiting workers from the poorest areas of the EU.
I'm not so sure there is any great shortage of willing workers at the moment but it may be a problem in the future once free-movement comes to an end?
As has been mentioned about the US above, there is this myth, propagated by the media, that natives aren't interested, are too lazy and so on...
Truth is that farmers have gotten away with exploiting cheap labour and they don't want it to end. You try getting a job today, as a UK native, picking vegetables and you'll likely face a brick wall.
We didn't have any problems before when people could do casual seasonal work for a fair days pay. When the source of cheap labour dries up we'll likely go back to not having problems. Just a few fat farmers will be slightly miffed about it.
Crops are not capable of suffering. Another publication that spreads the idea that inanimate things can suffer, while the true suffering is experienced by workers.
This only shows that the practice is widespread, not that I should go around saying that things suffer, when in fact they cannot do that. This is especially insensitive in a context when there is real human suffering.
It is just the hn title that is terrible. The article has the following title "California Crops Rot as Immigration Crackdown Creates Farmworker Shortage".
Somehow the hn title manages to put the blame with the Mexicans.
They need to raise their wages, pay what it really costs for labor.
And as a bonus, the increased costs will provide an incentive for future automation.