Blumneconomics I

That pinata of the St. Petersburg Times, editorial columnist Robyn Blumer, comes in from left field as far as the edge of the infield dirt this week.

Blumner's column advocates a wage increase for agricultural laborers, specifically those who pick tomatoes.
Would you pay an extra penny per pound of tomatoes if you knew it meant farmworkers who make an average $10,000 to $12,500 a year would nearly double their wages?

Anyone who said "no" to that question need not bother with the rest of the column. You can just return to whatever else you were doing, stiffing the waiter, kicking the dog, making that payday loan, whatever.

(St. Petersburg Times)

What starts out looking like populism turns out to have a basis in the free market. A worker's group went to big corporations such as McDonald's an basically threatened them with public embarrassment if they wouldn't underwrite the wage increase.

But it probably isn't that simple.

First, the corporations involved probably don't intend to pay for everyone's tomatoes at an extra penny per pound--just their own. Some tomato pickers seem likely to benefit far more than others. And what happens then? Raise the wages across the board? That is an inflationary strategy, one that will impact the prices of everything made with tomatoes ... except tomatoes from places that don't pay the higher wage (such as Mexico).

Mexican tomatoes will compete more effectively in the market because of lower pricing--perhaps the market for U.S. tomatoes shrinks as a result. Maybe a few tomato farmers go out of business, maybe a few agricultural jobs are lost.

Or maybe Blumner addresses that concern and arranges for a protectionist strategy. Keep those foreign tomatoes out! Smaller demand for Mexican tomatoes, maybe a few Mexican farmers go out of business, maybe fewer jobs as tomato pickers in Mexico.

Meanwhile, there's no skin off Ronald McDonald's crimson nose. He passes the costs on to his customers--mostly lower-middle class people. A private regressive tax is levied to artificially elevate the market price for the labor involved in picking tomatoes.

And down the road? Blumner claims the pay increase will nearly double the pay of a tomato picker. For tomato farmers, that will make the tomato picking machine look more and more like an economical investment.

After the workers have been replaced by machines, perhaps Blumner will track them to their new jobs and figure out how to artificially inflate their wages again. Wanna bet the next time it won't be a free market solution?

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