Fast Focus: 'What should we do about the farm labor shortage?' Pay higher wages

February 17, 2013 

To address the farm labor "shortage," we must first admit that there is no "shortage," since at some higher wage, the labor would be enticed from other pursuits to the fields. The talk of "shortage" comes from those who do not want to pay the market price.

There is a market, and the farmers offer a price, and if no one shows up, then they need to raise the price (wage) until labor is supplied. We cannot rant about how we love free markets, and then complain when we are offered too little for our produce, or when the market demands higher wages than we want to pay. There is no "shortage of labor problem," but there is a "low wage labor supply problem" for those who want to pay low wages.

I weary of people who cluck about their love of free markets, while resisting the information the market provides them.

Turning to policy: Markets do not exist in social vacuums. Society both creates the conditions of employment and suffers the external costs of low wages when the problems of the low wage labor population spill out into social welfare expenses, prison costs, and social degradation, and schools disrupted by foreign-language students who are illiterate in their mother-tongue.

The only solution for the farm labor "shortage" is to mechanize agricultural production.

We may need to raise different fruits and vegetables which are more amenable to mechanical pruning, weeding, and harvest, but that change in consumption patterns will be part of the transition to mechanized agriculture.

A sane government would have announced targeted wage increases (caused by reducing the supply of immigrant labor) back in the 1980's, with the industry knowing wages would rise gradually and certainly, so that inventors and venture capitalists could have planned investment in mechanized agriculture, knowing it would pay off in time, and knowing that the payoff would increase as wages were surely to rise.

That same sane government would have provided assistance in the fundamental research and development to allow industry to produce a slow and gradual replacement of plentiful low wage labor by fewer workers, now highly-paid, operating high-tech equipment.

Instead of this sane approach, the "winking" at illegal immigration that began under Reagan to flood the labor market, in a deliberate ploy to lower wages, removed the incentives to mechanize, and this intermittent flow of cheap labor makes investment unpredictable (albeit mechanization is occurring, fitfully, but not as a deliberate policy). Thus, even now, with labor "shortages" driving mechanization, the transition is haphazard, chaotic, and the economics are uncertain as the political system allows the flow of cheap labor to wax and wane.

We need a sustained, predictable, transition to mechanized agriculture, with temporary assistance and regulation to protect the predictability of profits for farmers as they follow this route.

Government and industry will also need to team up to introduce to the public the fruits and vegetables that can be mechanically grown and harvested, with good nutrition and good flavor.

In mechanized agriculture, each worker produces much more -- just as a man with a bulldozer can be much more highly-paid than can be a thousand men with shovels. Then, the high wages give management even more incentives to replace men with machines, and the remaining workers can bargain for higher wages, because they are even more productive per capita.

This is the "virtuous circle" of the high-productivity pathway to high wages, and away from "labor shortages."

In sum, it has been obvious for 30 years that agriculture must mechanize. The flood of cheap labor destroys the economic incentives to mechanize (at some point in lowering wages, a thousand men with shovels become cheaper than one man with a bulldozer).

We have had enough intermittent influxes of "cheap" labor (who are subsidized by the rest of us with social service and criminal justice taxes) that farmers have only haphazardly moved toward mechanization.

We need a steady, reliable, governmental policy to provide predictable economic incentives, and to provide the research, manufacturing, and crop research infrastructure, such that the transition to mechanized agriculture occurs smoothly and certainly.

This pathway will produce fewer, but higher wage, jobs in agriculture, and it will end the subsidy that the low-wage employers have forced upon the rest of us as we must ultimately subsidize the workers whom they pay so lowly, with our taxes for social services outlays, criminal justice costs, and often crushing education expenses.

Mechanization is the only alternative to the pathology of relying on low-wage farm labor.

-- Craig Mason

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