Free Exchange: The price of cheap tomatoes
This post is in response to an article in the New York Times by Eric Schlosser about wages paid to migrant tomato pickers in South Florida.
Mr Schlosser mentions that competition comes from Mexican growers—suggesting they, too, pay low wages. If workers come illegally to the US, that strongly suggests even the low wages here are better than the alternative at home. Raising wages here above what the market dictates will only encourage the fast food industry to buy more tomatoes abroad.
Mr Schlosser is at his most populist when he suggests that the private-equity industry and Wall Street CEOs are directly responsible for the increasingly competitive tomato industry. He brings up the large bonuses that Goldman Sachs executives received last year, as if they were a cause of farm-workers' poverty.
But skilled labour does not compete with unskilled. There exists no finite lump of money doled out as wages to workers in the US each year, as critics of income inequality often suggest. An increase in value of skilled labour does not imply a decrease in value of unskilled; the value of each of these is set in the global market. Imposing limits on either will only discourage job and growth for both types of worker.
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