So crops rot. The price goes up. Now they can make more money selling crops. So they can pay people more. What I am missing here?
In a first approximation: You can't sell crops that did rot. And the next harvest is next year.
Then there's of course the fact that almost nobody (with citizenship) actually wants to pick crops, no matter what you pay them, because it's back-breaking labor. Yes, there'd be a price at which they would, but that's not a price the public would pay for your crops.
Of course, if you don't give a shit about people and treat the world solely as an economics textbook, sure, this is perfectly normal and the market is working.
Maybe the public needs to get used to paying premium prices for premium work instead of outsourcing slavery to other countries or importing cheap slave-wage laborers illegally.
But I'm sure those "slaves" will thank you.
This is complete bullshit and needs to quit being touted. Americans are not afraid of hard, back-breaking labor. I grew up in the Midwest surrounded by corn and soy beans (and not too many illegal or legal immigrants). Tons of my white, middle class friends went out into the field to pollinate corn in the summers or went down to strawberry fields to pick when they came in season.
What a sheltered life you must lead if you've never met an American that does manual labor or works in a field...
I've seen it myself. Some of it's cultural -- manual farm work is seen as "beneath" people -- but most of it's economics. Nice that you grew up in a time and place where a citizen could afford to work in the fields, but those days are long gone. If you're not single and sharing the rent for your three bedroom house with 10 amigos, you're not going to make ends meet on farm labor wages and hours.
[1]: http://www.cbsnews.com/news/despite-economy-americans-dont-w...
This is not true. There is absolutely a pay rate, and set of labour conditions in which Americans will do those jobs.
There are tons of innovation in labour: grabber/chopper rods so that people don't have to bend over all day - for example, could be one such innovation. But maybe it cuts down productivity by 30% - so in a 'cheap labour' world it would never be conceived of.
But if labour costs are high, and farm workers have to actually pay Americans - then guess what - those types of innovations definitely happen.
Do you realize how many 'really crap' jobs there are out there?
How about dealing with screaming customers all day on the phone, trying to 'upsell' them?
Some people prefer not dealing with issues, and doing something repetitive.
Also - the hypocrisy of employers not paying for social services, healthcare, taxes - etc. etc. - but the government giving them social services and 'access to emergency healthcare' and drivers licences?
Basically, farmers are externalizing the social costs of their labour onto you and I, in an inefficient way.
This is totally wrong.
Farmers - and others - are pushed to use 'illegal labour' because if 'the farmer next door' is doing it, and the 'farmer down the street is' - then they have no choice to.
The best thing is to make sure that everyone is paying minimum wage, taxes, basic healthcare, respecting workplace regulations etc. - and even hiring authorized workers.
This means that prices will rise for some things - and you and I will pay more for them in the store - but it's a far more responsible form of capitalism - and prices more accurately reflect cost to society.
Some things won't be able to be done in the US - that's fine. Move that to other places. Let Mexico and Africa have a cut of the business.
Finally - one way to accommodate a tight labour market in a legal and 'above bar' manner would be to allow for 'pink cards' - i.e. foreign workers can apply for 'pink cards' for specific intervals, they 'check in' and 'check out' of the country given that pink card. That card comes with a 'temp SID' which they can use to pay their taxes, and claim benefits associated with the term.
Unregulated black market economies are good for nobody in the long run, they lead to all sorts of problems and growing inequality.
Enforce immigration and workers laws, provide some ability to help with a tightened labour force (i.e. pink cards) and facilitate good trade flow (i.e. customs unions and free trade) for items which cannot be produced in the US.
"you don't give a shit about people and treat the world solely as an economics textbook"
Trust me - migrant workers 'don't get given a shit about' by anyone, because if they are 'off the books' they have absolutely no protections - nothing.
Put the economy 'above bar'.
There would be no war over migration if we just had some basic but intelligent rules that were responsibly enforced.
But maybe not one at which the jobs would still exist; increasing price decreases market clearing quantity, ceteris paribus. You can either have poor wages and working conditions in farm labor, more direct government subsidies for agriculture, or less agriculture getting done in the US, because if you increase wages and thereby prices, you aren't going to move as much goods. Various treaties (and domestic politics) interfere with the second option, and there is overwhelming domestic political resistance to the last option, so we get the first even though it's frequently a source of complaints (and rests on the back of illegal immigration, which is itself unpopular).
Not endorsing any aspect of the state of affairs, but that's just the way it is.
> Some things won't be able to be done in the US - that's fine. Move that to other places. Let Mexico and Africa have a cut of the business.
Mexico has sizable food exports, as does pretty much every place with the arable land and political stability to grow export crops. Decreasing US production by increasing labor costs in the US for ag labor may make some additional production elsewhere economical that isn't already, but the main impact would be lower global production of food and higher global prices. Arable land isn't, unlike industrial capital, something that is readily movable to wherever labor and other conditions are most favorable to production.
The whole idea of inflation reducing the value of debts seems silly. "We'll trick those bankers with this well known, mostly predictable, small decrease in the value of money! They'll never see it coming!"
Now, you could argue that the expectation of future inflation is built into the mortgage interest rate at the time you obtain the mortgage. And you'd be correct. But once you have the mortgage, then inflation helps you. Or rather, it helps you when your wages rise in response to inflation.
Add to this that wages are relatively stagnant for most people outside of tech since the 80s in some countries and you have a problem. It can get even worse where wages are kept stagnant by government intervention and inflation goes up faster than 5%.
Mortgage loans, student loans, car loans, credit card debt, taxes paid in service to national debt, ...
> I don't know any workers with long-term debts which aren't inflation adjusted (even if indirectly).
Interest rates are somewhat inversely correlated with inflation.
Typically the only time you see high inflation and high interest rates together is when the economy is booming and people are willing to borrow despite the high interest rates. Then that borrowing, since banks create the money they loan you (they don't actually have all of it they just credit your account), causes inflation.
When inflation is caused by the government creating money, it causes interest rates to go down. Because the supply of money goes up so by supply and demand the price of money goes down. The price of money is the interest rate, therefore lower interest rates.
You would think banks wouldn't loan money if the interest rate is less than the rate of inflation, but remember again that they don't actually have all the money you borrow, they just credit your account and collect interest. Even if they had the money, it does them no good sitting in a vault depreciating -- 1% interest against 10% inflation is still more than the 0% they get by not loaning it to anyone.
The main problem is that the lower interest rates cause people to borrow more money, so the key is to combine the inflation with policies that would otherwise be deflationary. Increase the housing supply, eliminate mortgage and student loan interest subsidies for new debt, etc. Discourage new debt in general -- even tax loan interest on new debts. That allows the market to correct against historical bad policies without causing disastrous deflation.