California farming and our food sources
From the New York Times comes this information on the nature of immigration in California.
Mr. Trump’s immigration policies could transform California’s Central Valley, a stretch of lowlands that extends from Sacramento to Bakersfield. Approximately 70 percent of all farm workers here are living in the United States illegally, according to researchers at University of California, Davis. The impact could reverberate throughout the valley’s precarious economy, where agriculture is by far the largest industry. With 6.5 million people living in the valley, the fields in this state bring in $35 billion a year and provide more of the nation’s food than any other state.
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Now he worries that a Trump administration could mandate a Homeland Security Department program called E-verify, which was aimed at stopping the use of fraudulent documents. In all but a few states, the program is voluntary and only a small fraction of businesses use it.
Farmers here have faced a persistent labor shortage for years, in part because of increased policing at the border and the rising prices charged by smugglers who help people sneak across. The once-steady stream of people coming from rural towns in southern Mexico has nearly stopped entirely. The existing field workers are aging, and many of their children find higher-paying jobs outside agriculture.
Many growers here and across the country are hopeful that the new administration will expand and simplify H-2A visas, which allow them to bring in temporary workers from other countries for agricultural jobs. California farmers have increasingly come to rely on the program in the last few years.
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Yet, many of Mr. Trump’s supporters say they are counting on him to follow through on his promises. Dan Stein, president of the Federation for American Immigration Reform, said that limiting the use of foreign labor would push more Americans into jobs that had primarily been performed by immigrants.
“It doesn’t matter if it’s programming computers or picking in fields,” he said, “Any time you’re admitting substitutes for American labor you depress wages and working conditions and deter Americans.”
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Mr. Marchini, the radicchio farmer, said he felt similarly after seeing generations of workers on his family farm send their children to college and join the middle class. Mr. Marchini’s family has farmed in the valley for four generations and he grew up working side by side with Mexican immigrants.
He said that no feasible increase in wages or change in conditions would be enough to draw native-born Americans back into the fields.
UC Davis is working to automate much of the picking including by modifying the crops. Consider that over the last 150 years first we built machines for Wheat, then Corn and Cotton. Sauce tomatos are also machine harvested in Ca (developed 1949). http://bae.engineering.ucdavis.edu/research/machine-systems-engineering/ ” Harvesters for processing tomatoes, wine grapes, cantaloupes, dates, fresh market tomatoes, asparagus, prunes, peaches, and raisins ” have been developed there. Work is going on on mechanical tree fruit machines. (I do wonder if we could use 6 degree of freedom robots, in this area, with originally a human sitting in a cab with tv monitoring and a joystick, until machine vision gets good enough to harvest tree fruit.
“He said that no feasible increase in wages or change in conditions would be enough to draw native-born Americans back into the fields.”
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Street gang members (and their out of work blue collar, rust belt, former manufacturing counterparts) are not interested in the up-to-date kitchen or two mini-vans parked in the garage. They just want a decent life.
A $10 an hour job is not a decent life — a $20 an hour job or jobs is. Most $10 an hour jobs could pay $20. The min wage was $11 when per capita income was half today’s. 45% of today’s workforce takes 10% of overall income — used to be 20%. 2/3 of workforce will always be non-college — only way to $20 is through collective bargaining with the ultimate consumer — able not to show up to work for the 55% if they won’t fork over. Oh, uh, top 1% used to take 10% overall, not 20% — all of which means the money’s there — somewhere.
Labor is sold sort of on reverse-margin. Meaning labor can raise the price of Walmart’s goods for instance only 7% while getting 100% raise for itself. The money’s there.
[snip]
Now if you could make $20 an hour in Walmart, who would want to work in the fields. Going by Chicago’s 100,000 gang bangers out of my guesstimate 200,000 minority, gang age males — American born wont work in the fields for $10 even if there’s nowhere else.
So the reporter leaves out a crucial question of why won’t citizens take the jobs….the implication is they are “lazy”? Or the fact that the “market” as set up won’t pay enough.?
Employers in public tend to justify low wages with the “lazy” argument to distract from the wage/price of labor being too low. Much less the overhead that the term “wages” leaves out which many Americans take for granted. Much less any number being offered in the reporting concerning such estimates.
“[Labor] can raise the price of Walmart’s goods for instance only 7% while getting 100% raise for itself.”
When wage income is 60% of total income, the rest being capital income and rent, how do you get that 7% number?
Warren, you are not making the right comparison.
You need to look at what Walmart pays for labor as compared to all of its other costs.
In retail,as a general rule you start out that about half of their costs are the cost of the goods they purchase from their suppliers. I do not know the correct number for Walmart, but I suspect that some version of this analysis is how they got the 7% number.
Raising wages has solved the garlic farmers labor shortage. Perhaps other farmers should do the same thing instead of exploiting people.
One always faces a shortage for any product or service for which one is unwilling to pay the prevailing price. The argument that they need to rely on illegal workers is no different than insisting they should be allowed to farm on someone else’s land because the land is too expensive for them to buy.
“You need to look at what Walmart pays for labor as compared to all of its other costs.”
No, you need to look at what the cost of labor is for all the things Walmart buys. If it sells a product of which labor is 60% of the cost of production, and that cost doubles, then that product’s price has to go up 60%.
Just to clarify, I mean that the price Walmart pays would go up 60%.
“He said that no feasible increase in wages or change in conditions would be enough to draw native-born Americans back into the fields.”
The operative word is “feasible”.
He’s saying that raising wages would hurt his profit margin, not that no wage or change in conditions could induce Americans back to field work. He has, what they call in Silicon Valley, a flawed business model, like paying $100 a barrel for oil, selling gasoline for 25 cents a gallon, but trying to make up the difference by selling advertising on the line for the pump. Like Uber, the model doesn’t work. In Uber’s case, VC money makes up the difference. Here, it is hiring workers without proper papers and paying them less than market prices and offering them lousy working conditions.
If we actually enforced immigration restrictions, it would drive out marginal producers and those who could not pass on their higher costs. It would increase imports of produce from countries with lower labor costs. It would encourage automation which has been discouraged by cheap labor.
It would also raise the price of food, though not as much as the alarmists claim. If you count calories, things like meat, grains and fats are already highly automated in production. Specialty items might cost more, but that would just encourage automation, perhaps involving urban farming solutions. I don’t think we are as far from the automatic chicken gutter and deboner as we believe.
Kyleberg:
Last time I looked, 50% of US food is imported. Loss of cheaper harvesting will put pressure on the US market. Then too, do we really want all of our food to be imported?
It does seriously depend on what kind of food: For Wheat the answer is no the us is a net exporter, for beef pork and chicken the same. (Because they use Corn the production of which just like Wheat and Soy Beans is heavily mechanized.) If you get to vegatables and fruits in particular the fresh ones, it is partly because of limited seasons some are available fresh. Or because production is already so much cheaper outside the us, pineapples having vanished from Hawaii because of this,
Or to take another example the Texas Rio Grande Valley has some citrus but ever so often a big freeze comes and kills trees, Growing the fruit in the Yucatan means that freezes don’t happen however (some of the same is also true of California)
Note that the potato harvest is local because it is machine harvested, not hand dug.
Sugar Beets are also mechanized in harvest.