Monday, February 27, 2017

Labor Economics 101

The problem with this kind of simple story is that it removes wages from the equation.

Americans line up to mine coal in the dark underground. They don't do it because they like the dangerous and unhealthy work, but because it pays good union wages.

Americans put hot tar on roofs and pave roads in the desert, not because they like the work, but because they like the wages.

Pay high wages, and Americans show up for work.

If wages go up enough, companies are incentivized to mechanize, either fully, or partially.

Look at these workers. They are carrying their picking trays down a row. If higher wages were paid, a conveyor belt would float over that row, with workers dangling off the side to quick pick. That's a better job, with more mechanization, and better pay.

The argument that these are jobs American won't do is the same one once used to justify slavery: "No free white man will pick cotton."

In fact, when slavery was abolished, mechanized cotton pickers entered the field, driven by free men who were paid better wages.


Jennifer said...

Also worth noting that field labor is NOT unskilled.

A few years back I had a vineyard. Most of the people we hired to prune, thin, and pick grapes spoke Spanish as a first language. As for papers, it was don't ask, don't tell. If you tried to weed out undocumented workers you would get no workers at all.

There was a shortage of field labor for the harvest in 2012, and we tried hiring some of the gringo crew that hang out at the homeless shelter. Their rate of picking was about 1/3 of that of the Latinos, and they did a worse job of sorting. Plus they were ready to quit after six hours, while the Latinos were happily chatting and singing after 10 hours.
The gringo crew were the first to admit that they simply couldn't keep up with the Latinos. All in all, they found the job depressing, and there was no way to get them back to the vineyard for another day.

PBurns said...

Harvesting grapes is not very skilled. It's the kind of skill you learn in a few days, and the kind of work you do for slave wages and crap working conditions (squatter huts and old school buses for sleeping) when you are an unfree foreign laborer. The alternative work pool was homeless alcoholics? Sure. If you don't supply transportation, housing, health care or Social Security, you are going to be feeding off the bottom. That's the point -- unfree foreign labor in Albermarle County, just a few miles from Jefferson's slaves at Monticello.

There is no need for wine grapes to be grown in Virginia and Maryland. These are small fields, with small production, and it has no historical roots or sound economic basis (which is why so many run an entertainment business with hot air balloons and bands every weekend).

In California, Australia, Italy, and France, where better wine is made, the grape harvest is mechanized and if you can't mechanize it, or pay living wages to American workers, you need to grow something else.

For a video of what mechanical grape harvesting for wine looks like, see here >>

See here for a longer post about the economics of fruit and vegetable farms in the U.S> >>