Farm worker advocates think that American farmers just need to charge more for the food they produce so they can pay farm workers more. Sounds simple, right?
In an “All Things Considered” NPR story aired November 16 farmworker advocates claim that “if farmworker pay went up by 40%, an average American household would pay only an extra $25 for an entire year’s supply of fruits and vegetables.”
Of course, who wouldn’t pay more to enable hard working farm employees to earn more? Except it doesn’t work that way. Almost all farmers have no control over the prices because food production is a global business. Prices are set for them based on what prices farmers around the world are willing to sell their crops. The few smallish farmers that sell direct to consumers can charge what the market will bear and research shows overall farmers market consumers pay about 18% more than grocery stores.
Imagine this. You own a coffee stand in a city that is divided by a state border, like Kansas City. You are close to the border in the Kansas part of town and a block or two away you have competitors in the Missouri part of town. Kansas state government says you have to pay your workers $240 per hour. Your competitors are paying $12 per hour. Besides getting a flood of applicants from a few blocks away, you find you have to jack up the price of your latte to $60 per cup. Customers drift away. You are out of business.
The good part of the NPR story is that it explained that the 200,000 or so legal guest workers who come to work on American farms for a season would earn $7 per day working on Mexican farms. Per day. Note, per day. Washington’s 20,000 or so guest workers earned a minimum wage of $15.83 per hour––note, per hour. That’s before incentive pay which enables most to earn close to $20 per hour.
The story about one coffee stand having to pay 20 times more for labor costs on one side of the border than the other is no fiction. For farmers it is very real.
American farmers are losing out every day to foreign competitors. The farmworker advocates say American consumers would pay $25 more per year for fruits and vegetables if farmworkers got a 40% pay raise. However, today American consumers are already buying mostly foreign fresh fruits and vegetables. We’ve gone well past 50% of fresh fruits and approaching that for fresh vegetables.
Is that a good thing? Not if you care about pesticide residues in your food and more food borne illnesses. The FDA reports that imported food is five times more likely to have pesticide residues above the limit than American produced food. And the CDC says that foodborne illnesses, particularly from produce and seafood, are rising at the same rate as the rise in imported food.
Farmers would love to pay their highly valued employees much more. It certainly helps to attract the best workers in a time when fewer and fewer workers are available or willing to do the hard work. Because they can’t charge more for their crops, they face going out of business. And that is what is happening to all but the most efficient.
Let’s go back to the coffee stand. You are the owner and now face paying your employees $200 per hour––20 times your nearby competitor. But, wait. You have an idea. What if you got a robot barista? You research it and find yes, you can get one from Japan. It will cost you $20,000 but you’ve got some well-heeled friends who sense an opportunity. Soon you are selling your lattes for less than even your competitors in Missouri. With all the other coffee stands in the Kansas side of town shut down due to the new law, you buy up their locations cheap. Now you are rolling in it and start buying up the ones in Missouri, too.
The coffee stand employees led by union activists who pushed through the destructive Kansas legislation are not happy. And they have a right to be angry at those who convinced them that getting paid a whole lot more than the market could bear would be a good idea.
Washington state has a healthy farm economy producing about 160,000 direct jobs each year and many many more indirect jobs. Apples and dairy products are the two main farm products. But, right now the future for family farms in Washington state is looking very dismal. The Washington State Supreme Court ruled that farmers must pay their workers overtime and possibly pay three years retroactive. For dairy farmers alone, one estimate has it that an average farm would owe $400,000. Large farms, much more. If this is applied statewide, farming will no longer be viable in this beautiful and very productive state.
A few farms will survive but will have to be very large and be able to invest in all the most advanced labor saving technologies. Fortunately for those in a position to make that investment, a lot of very inexpensive farms will be available. And a lot of 3rd and 4th generation legacies will be lost.
That’s what farmworker advocates got wrong in the NPR story. What about NPR? The story itself provides very important facts about what Mexican workers can earn in their home country compared to coming to work on American farms. We noted that Washington farmworker pay is the highest in the nation with a $15.83 minimum wage.
What NPR got horribly wrong was the headline. It says farmworkers say the government is cutting their pay. First, if the reporter talked to any it was at the behest of the unions who have been making that claim. All the USDA did is changed the way pay increases are calculated. The previous method resulted in very large pay increases year after year with the resulting loss of farms and farm worker jobs (as explained above). The new way does not roll back wages, in fact it protects the already high wages being paid for the next two seasons. But future pay increases are based on increases in cost of living rather than a method that would ensure the loss of farms and jobs.
Do farm workers want to keep their jobs? Or would they rather stay in Mexico and work for $7 per day. Note, per day. Maybe a reporter or headline writer should have talked to some real farm workers.