Let’s look at some different forms of labor and how they affect the millions of Americans who buy food every day.
Best: Full automation. GPS guided tractors and similar tech bring labor costs per unit close to zero. That drives food prices down, making it affordable hundreds of millions of Americans.
Good: Cheap migrant labor. Labor costs are higher than automation but still relatively low. When automation isn’t feasible, cheap migrant labor helps keep food prices reasonable.
Bad: Domestic labor at high wages. While Americans can do farm work, most aren’t willing to do it for low wages. When employers must pay significantly more, the cost per unit rises sharply. This can raise food prices to the point where many low-income consumers struggle to feed their families, forcing them to sacrifice other essentials just to eat.
Worst: Unionized labor monopolies. When unions control the labor supply, they can and will demand inflated wages and benefits. In industries with tight margins like agriculture, that means soaring labor costs and a major spike in consumer prices. The result? Food would become unaffordable for hundreds of millions of Americans.
Of course, not every increase in labor cost results in a one to one increase in consumer prices. The degree to which costs are passed on depends on price elasticity - how sensitive food demand is to price changes. But for something essential like food, where demand is relatively inelastic, higher input costs will hit consumers very hard.
This pattern doesn’t just apply to agriculture - it’s a general rule across all industries. When labor costs are artificially inflated, prices rise, and consumers lose.
And remember, we are all consumers.
Best: Full automation. GPS guided tractors and similar tech bring labor costs per unit close to zero. That drives food prices down, making it affordable hundreds of millions of Americans.
Good: Cheap migrant labor. Labor costs are higher than automation but still relatively low. When automation isn’t feasible, cheap migrant labor helps keep food prices reasonable.
Bad: Domestic labor at high wages. While Americans can do farm work, most aren’t willing to do it for low wages. When employers must pay significantly more, the cost per unit rises sharply. This can raise food prices to the point where many low-income consumers struggle to feed their families, forcing them to sacrifice other essentials just to eat.
Worst: Unionized labor monopolies. When unions control the labor supply, they can and will demand inflated wages and benefits. In industries with tight margins like agriculture, that means soaring labor costs and a major spike in consumer prices. The result? Food would become unaffordable for hundreds of millions of Americans.
Of course, not every increase in labor cost results in a one to one increase in consumer prices. The degree to which costs are passed on depends on price elasticity - how sensitive food demand is to price changes. But for something essential like food, where demand is relatively inelastic, higher input costs will hit consumers very hard.
This pattern doesn’t just apply to agriculture - it’s a general rule across all industries. When labor costs are artificially inflated, prices rise, and consumers lose.
And remember, we are all consumers.