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Comment by CodeGlitch | Hacker News Reader

Lorry drivers getting 40% higher pay:

https://www.bbc.co.uk/news/uk-england-coventry-warwickshire-...

In fact I can see this happening across many industries, and if you are one of those people working minimum wage can only be a good thing? The import of cheap labour does push down the wages of the working class - so the middle/upper classes get to buy cheaper fruit...

I believe farmers will have to work with this new "normal", and it'll take a few years for them to figure out how to cope.

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It's not like the working class doesn't have to eat. In fact, they will be hit hardest by increasing food prices.

> Indication of some degree of food insecurity was reported by 14.2% of the sample and tended to be higher amongst younger age groups, those on lower incomes, and home renters (as opposed to owners).

https://academic.oup.com/jpubhealth/advance-article/doi/10.1...

I somewhat doubt that we're talking about upper/middle classes here.

"It's not like the working class doesn't have to eat. In fact, they will be hit hardest by increasing food prices."

But they are the ones getting the higher wages, so it doesn't matter.

It's those people not getting wage increases that end up taking the loss - which is the middle class and the public sector.

True - but other aspects of your running costs (electricity, gas, rent, etc) will not increase, as I don't believe they depend on cheap labour.

Interestingly (can't find the reference right now), I've read that the high cost of labour in the UK contributed to the push for mechanisation of farming, which resulted in the industrial revolution (something we have all benefited from). In China, labour costs were (are?) so low that there was no reason to invent a farming machine, when you could pay a peasant to do the job for less.

So if this runs long term, we will see further automation of farming?

Or just better distribution. It’s not hard for an Apple picker to pick a few dollars worth of apples per minute at harvest time, but that’s the supermarket price, not what the farmer can sell them off for per bushel.

I know picking isn’t the only cost, but it seems like the cost of picking doubling or trebling should have minute effect on profitability.

Farmers need to get better at capturing the price that consumers are willing to pay.

Somehow, farmers markets have become the place to pay premium prices instead of lower prices.

Or convince consumers that a bit of scab on an apple is fine to eat and doesn’t need to be destined to make sauce or juice.

The UK will need to adopt the approaches in farming taken by the Dutch amongst others.

The crops planted will be the ones more amenable to automation.

Not if their wages grow in line with the increases.

Yes, "if". The problem is that companies don't move in lockstep with the broader economy, so it might take a year or two of food and goods increasing in price 12% before your company has managed to give you a 5% raise, which in turn requires them to raise the prices of their goods. And hopefully _their_ customers don't balk at the increased price because _they_ haven't yet been able to absorb their own set of wage increases.

The context of this post is that companies are having difficulty hiring and are having to increase wages. Which is what is being hypothesised to lead to price increases. Which would suggest that wage increases would come first in this instance.

Yes, but they're hesitant to do that because of the impact the wage increases (which then get passed on to consumers) will have on sales. There's this notion that companies could simply double or triple wages with a negligible impact on the bottom line or consumer prices but are just being dicks. Which is not really the case. Margins are just razor-thin. So you get in a sort of Mexican standoff situation. Who's going to blink first, raise wages, and lose sales?

If they can't find staff then the companies don't have much choice but to raise wages. They'll lose more sales if they have to close their business due to lack of staff.

A guy driving a truck might enable 10,000 burger sales in an hour. A cashier might enable 100. It's easier to raise the truck driver's wage.

Raising wages and prices can be done, of course. But if you're planning to export those goods to other countries, you've just made your products more expensive. If your goods are fungible, you may not be able to raise the price at all. Higher wages might simply make your business not viable in the context of international trade.

Wonder if it will cause high inflation, and if that’ll force up interest rates

It certainly feels that way. Businesses can’t find workers, so wages increase, costs are passed on to consumers, prices inflate…

It will. And they will avoid at all costs to raise it, for higher interest rates will default everyone over leveraged, which is everything and everyone at this point outside of the preppers and Libertarian types which have been yelling about this for a long time now.

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