The High Cost of Cheap Labor - Illegal Immigration and the Federal Budget

Center for Immigration Studies ^ | August, 2004 | CIS

[AuntB]

I heard someone say that if a head of lettuce cost 1 dollar the labor cost was 4 cents. That’s all. So if wokers got double pay the cost fo lettuce would only be an additional 4 cents. Can anyone valdate this?

Here ya go.

[snips]$5.00 per head lettuce is a lie! "Many people fear the first part of such a response, claiming that prices for fruits and vegetables would skyrocket, fueling inflation. But since all unskilled labor — from Americans and foreigners, in all industries — accounts for such a small part of our economy, perhaps four percent of GDP, we can tighten the labor market without any fear of sparking meaningful inflation. Agricultural economist Philip Martin has pointed out that labor accounts for only about ten percent of the retail price of a head of lettuce, for instance, so even doubling the wages of pickers would have little noticeable effect on consumers." http://www.nationalreview.com/comment/krikorian200401070923.asp AND

"According to the University of California, the cost is about 22 cents to grow and harvest a head of lettuce. Of that, about 15 cents goes for farm labor. If we doubled the wages of farm workers, the cost of a head of lettuce would increase by 15 cents - even less if labor-saving machines are justified.....For labor costs to force lettuce to $5 per head, farmers would have to pay field workers $280 an hour".....Glenn Spencer...

http://towncriernews.blogspot.com/2006/04/news-you-missed-immigration.html

[NVDave]

Exactly, Auntie B. FYI everyone, if you want to know representative costs in ag production, do a google (or other) web search like this: "enterprise budget" And then start noodling around. The various land-grant universities have ag economics departments that do these "enterprise budgets" that give you representative budgets of inputs and revenue outputs for various crop and animal production. NB that these budgets aren't exactly applicable to every operation; they're a sort-of average that the ag economics extension achieves by asking representative producers what their costs/revenues are. Many of these budgets will show a negative net return on investment, and then y'all will start to cop a clue what it is like to be an ag producer: you're often eating your depreciation. In the case of table fruits and vegetables, they are one of the few ag products where they have some pricing power; ie, the ability to raise prices and pass the cost increases on to consumers. Other ag commodities (eg, corn, wheat, etc) - their prices are set on the futures markets, and if the futures speculators suddenly sell off or short the market going into harvest, a whole lot of farmers take it in the shorts for reasons that have *nothing* to do with supply and demand. Most folks out there who are sitting at desk jobs are not operating in markets where some speculator at a hedge fund can shaft them out of their once-per-year profits. Such is the lot of the modern farmer.