Brent P wrote:
In article .com, wrote:
Brent P wrote:
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.
Has nothing to do with being stupid. It's about long term vs. short term
thinking. The busniess environment in the USA is overwhelmingly short
term thinking.
Yes, it does. You think ag companies are too stupid to realize that
they could make MORE money by using more machines as you claim can be
done, instead of using cheap labor. And apparently you think a
tractor or a large processing facility is a disposable short term item.
They buy and finance tractors and processing plants, don;'t they?
And even if they wouldn't buy a machine to replace humans to make more
money, they can lease it. Straightforward. Instead of paying x
numbers of workers, pay a monthly lease payment. It ain't rocket
science. The reason it isn't done is they make more profit by using
humans and machines in the mix of applications that they are doing now.
You apparently think you know more about agriculture production than
those in the business.
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.
Again, long term vs. short term thinking. Businesses often neglect the
long term because they need to have profit now.
See leasing comments above. Also, capital investment and profit are
two very different things. You don't expense a new machine, you
capitalize it and depreciate it over it's service life.
Another issue is cash flow... Cash flow says they cannot buy automation
this year, so they do cheap labor. Rinse and repeat.
See leasing.
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.
Most businesses are not operating at long term ideals.
Again, you think you know more than those in the business.
You are looking at the whole thing from a sensible long term approach
that is rarely done in practice.
Also the bigger the business, the stupider it is... (ie Dilbert's world)
See, you do think they are stupid. How arrogant. I guess companies
like Microsoft and Intel must be among the most stupid then. Funny how
they are thriving in this world economy.
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.
It's also states that haven't been penetrated as much by illegal alien
labor... hmm....
Oh yeah, and where would that be Mr Expert? We have plenty of them
here in NJ doing everything from picking crops, to mowing lawns, to
working in kitchens of all the restaurants. I've travelled widely in
the US and I see them everywhere.
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.
I can economize what I consume. I am forced by the barrel of a gun to
pay taxes. So can everyone else.
When we pay the costs as taxes it short circuits the economic system.
Prices have to go down because people are paying large segments of their
income as taxes so they drive down labor costs which puts more people out
of work and more with work needing social services which drives up taxes
and it's a nasty feedback loop.
You really should take an economics class. Increased taxes don't drive
prices down, they increase prices, because taxes are just another
expense that business passes on to the consumer. And if this nasty
little feedback thing was causing higher prices and more unemployment
as you claim, why is it that employement is near historic lows and
inflation is low as well.
If we just pay for the costs in the products, we buy what we can afford
to buy, more people are employed at a decent wage, leading to a larger
market and producers find other ways to lower prices in the competition
of the free market.
The first few years out of the feedback loop might hurt, but we get out
of it or we crash completely.
And now we are about to crash? Oh, my!