3 ms·
Well, the unemployment rate isn't zero. It's hard to say exactly how elastic the labour market is, but my guess is labour costs wouldn't actually double. They
by Mikeb85 10y ago
Well, the unemployment rate isn't zero. It's hard to say exactly how elastic the labour market is, but my guess is labour costs wouldn't actually double. They'd probably go up by 20-50%, worst case. If the market can't take a 50% price increase, the farmers will either sell for less margin and accept a cut in profits, or they'll find efficiency through automation.
But as I pointed out, nothing happens in a vacuum. Rising 'cost' of labour means rising wages, consumers have more money. What's the better equilibrium?
Keep in mind, in most parts of the world, we pay much, much more for food than Americans. Somehow we survive, and live pretty damn well too.
Edit - I should also add, I buy organic lettuce produced in a greenhouse in Canada. It doesn't cost $20. We're somewhat less tolerant of illegal labour than the US as well.