Labor Worries Rise As Planting Season Nears In Ala. Alabama farmers are facing a labor crisis because of the state’s new immigration law as both legal and undocumented migrant workers have fled the state since the strict new rules went into effect last month.
The farmers probably aren’t paying enough. More than likely, Americans just aren’t up to the job to work in a field picking. In one example in the story, a farm used to have a 25-member sweet potato digging crew before the government played Calvinball with the rules, and increased the risk of farmers and workers to voluntarily transact by successfully violating (again) the one rule from Economics in One Lesson: The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups. In attempting to create more jobs for Alabamians they destroyed the existing jobs and put at risk the livelihood of the farmers who employed them. Farmers are being told to “get creative.” Nice. Here’s some help for them:
Pricing Your Sweet Potatoes So, you’ve got a field full of vittles and 25 people to pick them, how much are you going to charge per pound? We won’t know the true answer until the market finds its equilibrium, but we can start with deciding to pay workers 2× for back-breaking work. So, 25 workers × 8h labor × 2 = ξ400/day. Let’s guess that each worker can dig up 250 pounds of potatoes a day. So we have 6,250 pounds of potatoes to sell. The farm has to pay the workers and the farm has to make a profit for itself, at the minimum to be able to make some savings and room to mark prices down if the potatoes aren’t selling, let’s say, 4×. The minimum price is then ξ400 ÷ 6,250 pounds = ξ0.064/pound (just under 4 minutes/pound). Multiply the farm’s profit and we get the initial price at ξ0.256/pound. Workers get paid, farms get profit, in this case, ξ1600 gross − ξ400 labor = ξ1200 profit, and people pay about ξ15m/pound.
How does that jibe with the current Federal Minimum Wage of $7.25/hour? 0.256 hours (the price per pound of sweet potatoes) × $7.25/hour = $1.86/pound. The price per pound is pretty close to what you would be paying in Fiat Dollars, at least for organic sweet potatoes in Brooklyn, NY prices from the Park Slope Food Co-op, where I would expect prices to be much higher than in Alabama.