Apple picking: a case study in capitalism

Tuesday night driving home I heard a story about apple picking on NPR, a station I listen too more frequently now that I don’t have to worry about hearing Juan Williams. Set in Washington state, the 4 minute radio piece (which is available to read and listen to HERE) included interviews with the orchard owner and the migrants from Mexico who pick the apples. This one story could serve as a case study in the complexity of the issues facing the US economy. Consider this:

I assume the Mexicans in the piece were here legally otherwise granting a radio interview would seem risky behavior. The apple-growers don’t always use legal workers, however. Last year, the Feds checked out a neighboring orchard and ended up deporting 500 illegal immigrant workers. The farmer interviewed for this piece all but admitted that he has to use illegal immigrants to pick his apples since the method of obtaining immigrant workers legally – a visa system – “is too expensive, and the other alternative — hiring Americans — is a fantasy.”

Why is it a fantasy? Because the wages are so low. A worker gets paid $15 per “bin” but a bin equals one thousand pounds of apples. Under the laws of capitalism, with a labor shortage (caused by a crackdown on illegal immigrants), the employer should raise the rates he pays to attract the needed employees. To cover the higher labor costs, the employer would have to raise the price he demands for his product. But the grower claims that if he raises the price for his crop, apples from Chile and New Zealand will be cheaper and he won’t be able to sell any of his which means he’d be out of business.

From the grower’s perspective, the US government is sticking it to him by regulating his ability to hire cheap immigrant labor. He’s probably extra incensed that he’ll soon have to pay for health insurance for these workers, as well, under health care reform. I don’t have a lot of sympathy for him. He’s unwilling to pay employees a living wage and he’s content to have the rest of us pay for the health care of his employees when they show up at the emergency room, sick and uninsured. He’s willing to apply the cold cruel rules of capitalism to those he wants to hire but not apply them to himself.

3 Responses to Apple picking: a case study in capitalism

  1. JoeS says:

    You understand the conundrum he faces, but have no sympathy with his plight. And as a case study in current US capitalism, it is a microcosm of the conditions that are stiffling our economy. We must change the model of our economy in a way that we lessen the economic burdens being applied to US workers.

    Yes, education and innovation can keep us ahead of the curve to a degree, but the current economic model is a much more powerful force in moving jobs to developing economies. In just waiting for those economies to rise to our standard of living we are starting to realize that part of that response is lowering our standard to match theirs. That is why we are so angry, whether or not we realize it.

    So how do we change the economic model? We could start by unburdening work with the costs of the employer social security/Medicare match and the cost of health care. And we could ensure that the costs associated with protecting people and the environment are borne by the makers of the products that we consume (we are now spending a lot of resources on mail incoming from Yemen, and it is the general budget of the US bearing those costs – as it has been for so many questionable and defective goods brougt into this country). We need an alternate tax system to replace these internal revenues and to apply the costs associated with incoming goods where they belong.

    A hybrid system with a progressive consumption tax and a high standard exemption, progressive income tax could provide the replacement revenues, although it may require extending single-payer Medicare to all health care (which wouldn’t be a bad thing) Unfortunately, change is hard to come by, as the President is well aware.

  2. DickH says:

    I have sympathy for his plight; I have no sympathy for his attitude which is to bend everyone and everything to meet his own particular needs. As you rightly point out, our problems are hugely complex and have no easy solutions. Too bad more people don’t recognize that because until they do, the attraction of simple sounding solutions is too enticing.

    This story also raises issues about our food supply. Corporate America has transformed our diet into a steady stream of processed food that’s inexpensive but high in calories and low in nutrition. I want to buy locally grown food but it’s hard to do.

    A childhood fall ritual was a Sunday drive to Drew’s Farm in Westford for bags of freshly picked apples. Drew’s is now a subdivision. Twenty years ago, I preferred Red Delicious apples, but our system of food supply began breeding them for uniformity of color and size and they bred the taste right out of them. I switched to Gala apples but a few years ago when McDonalds rolled out its apple-walnut salad, guess what variety they chose? Gala. And now McDonalds is the largest purchaser of Gala apples in America and all that’s left for the consumer is the corporate rejects.

    The guy featured in this story grows Gala apples so I assume he’s a supplier for McDonalds. He’s being squeezed not because you or I are unwilling to pay more for a decent apple, but because he’s selling to McDonalds and he has no bargaining power with such a corporate behemoth. So now he’s being put out of business because he can’t grow is crop cheaply enough to satisfy his corporate master, and we’re left with lousy apples.

  3. C R Krieger says:

    As Keynes would say, in the long run we are all dead.

    In the short run we can force this chap out of business and buy from New Zealand or China.  That said, how does New Zealand produce cheap apples and ship them here?  That would be an interesting question, given that the New Zealand standard of living is probably a lot higher than that of the PRC.

    NZ GDP per capita of $28,722, HDI of 0.950 (20th)
    PRC GDP per capita of $7,518, HDI of 0.722 (92nd)
    USA GDP per capita of $47,701, HDI of 0.956 (13th)
    (Human Development Index)

    I guess I am with NPR’s Nina Totenburg on this one.  I am very afraid; but in my case, not of the electorate, but rather of the economists and the politicians.

    Regards  —  Cliff