This Week's Wisdom

This Week's Wisdom

Approximately 2000 seasonal workers in Washington have learned what the real minimum wage is – zero. For years Washington’s legislature and governors have functioned under the cartoonish fantasy that the great and powerful can suspend the laws of economics. This naïveté prompted those innocent bleeding hearts that formulate Washington’s laws to impose an artificially high minimum wage upon agricultural employers. And it is that artificially high minimum wage that contributed to the loss of 2000 asparagus processing jobs in eastern Washington.

Del Monte Foods announced last week that it intended to close its Toppenish plant. Seneca Foods had previously announced that it would no longer process asparagus at its Walla Walla facility. The Washington Asparagus Commission reports that both companies cited foreign competition, primarily from Peru, and Washington’s extravagantly high minimum wage of $7.01 per hour as reasons that they could no longer compete.

This comes on the heels of Washington’s surprisingly wise decision to lift Boeing’s tax and unemployment insurance burdens so that it remains economically feasible for the company to build commercial airliners within the state. Unfortunately, the very same people who just came to the realization that onerous government burdens might yet cost the state Boeing jobs, have yet to realize that similar mandates are destroying jobs in less charismatic fields. Sadly, the asparagus processing industry does not possess the visibility of Boeing, or the money to hire expensive lobbyists, because they need relief just as much as Boeing does.

The economic meddling of the Washington state legislature guaranteed the decline of the asparagus industry. The legislature can and does force up the cost of doing business, but the free market sets the value of any agricultural product. The legislature cannot force the consumer to pay more for locally grown asparagus.

I often elect not to purchase produce when I judge the price too high. As much as I like artichokes and avocadoes, I won’t pay $3.00 apiece for them. The same goes for off-season asparagus that can sell for $4.00/pound. The grocer knows that I am not unusual in this regard and searches for quality vegetables at the lowest possible price. A grocer understands that, should he elect to offer his customers significantly more expensive Washington asparagus, the customer will buy Peruvian asparagus from his competitor down the street.

The free market has decided that asparagus cannot be processed within the state of Washington because the producer cannot recover the costs of his labor from the sale of his product. When one forces a cost upon a job that exceeds the value of the product that job produces, that job will cease to exist. This is as immutable as the law of gravity. In some jobs, the market can be jiggled a bit. Forcing McDonald’s to pay hamburger flippers more won’t send Pullman commuters to drive through windows in Mexico. But, every little increment of labor cost will be reflected in the price of a Big Mac and will discourage sales. The consumer can choose to eat at home.

Caesar Chavez is hailed as a saint for unionizing migrant agricultural workers, but in doing so, he cost many of them their jobs. By forcing up the cost of labor, and through strikes, that made that labor unreliable, Chavez forced growers to automate their harvests. Caesar Chavez drove the cost of labor above the value of the product that the labor produced.

Many of the most impoverished nations around the world have tried manipulating markets from legislative halls or dictator’s desks.

Minimum wage laws really are just about the flabbiest exercise of compassion possible. It’s very easy for sanctimonious lawgivers to sit back and order someone else to be generous. And afterward they can boast about how courageous and compassionate they were in passing such a law.

Their courage and compassion has now yielded one of the highest unemployment rates in the country. Considering all that Washington has to attract business to the state, a well educated populace, a mild climate, natural beauty, it’s a wonder that 7.7% of the labor pool cannot find work.

These phony compassionistas claim that it is in the interest of our neediest and most vulnerable citizens that they inflict such laws on employers. Well, we now have 2000 people who are even needier as a consequence of that compassion.

Congratulations.