Brent P wrote:
In article . com, wrote:
Brent P wrote:
In article , Elmo wrote:
Low wages paid to ag workers are one way to subsidize low food prices.
Think what food would cost if the people who produce, prepare, and serve
it actually got paid living wages.
Low wages prevent the use of automation. Only those crops where
automation has not yet been developed and/or growers simply refuse to
use it because of the cheap labor supply depend on illegal alien
workers. There wouldn't be any increase in price unless the producers
threw a fit and stopped growing the crops. The market price is what is.
Not according to basic economics. If automation was less expensive for
the crops labor is now being used for, the farmers would be using it
already, instead of illegal aliens.
Cheap labor keeps automation out. Automation is a capitial expense,
labor is an operating expense. They can avoid the capitial expense by
paying the operating one. The cheap labor might actually cost more all
said and done, but there is no capitial expense. It's like having a
loan.... You don't have all the money today or can't spend all the money
today so you spend a little each month but more over all.
The above assumes producers are too stupid to figure out what makes
them the most money, which flies in the face of capitalism and
economics. In fact, companies are very good at it. They can do the
math, figure out whether the capital investment is worth it, what the
cost of financing is, how fast it pays back, etc. They have all done
it and that is how we arrived at the mix of human vs automation we have
today. You can argue all you want, but the simple fact is
farmers/producers in the business know what their actual costs are and
are behaving rationally. If they could save money by using more
automation, they would.
When you raise all producers
costs, the supply curve shifts, resulting in a higher market price.
And no matter how much automation you have, there are still many tasks,
like inspection/grading, that have to be done by humans.
Actually automation does that in some farming applications already.
Yes, because it's possible and economical in some select cases. And
guess what? Just like you would expect, where it saves money, it is
used.
Now, does that mean it would result in prices so high people could no
longer afford food? No, but it most certainly would have the effect
of increasing price.
The same situation we have right now where many people can't afford the
taxes. I'd rather have slightly more expensive food than this huge tax
burden to pay for the health care, crime, infastructure, etc that we have
to pay for illegal aliens. Not to mention things like increased insurance
rates.
I tend to agree. I'm not so sure the effects on prices would be slight
though. There are many services, throughout the economy, where you'd
have to more than double wages and even then, it would be hard to find
employees willing to do that work. But I don;t agree with those
predicting it would be the end of the world either. The economy has
survived other major shocks, like the recent run up in oil prices,
without falling apart.