The Corner

How Much Is That Peach in the Window?

It wasn’t clear whether Andrew Sullivan agreed, but he quoted a reader who’d met some California farmers:

One held up a fancy white peach to me and said: “Today, you can buy this for about 35 cents in the Safeway. If I were paying my fieldworkers a regular minimum wage and benefits to care for and harvest that peach, it would cost you about $1.50. These people ought to think about that before they start raging against the immigration bill.”

This is a widespread mistake; even Rod was taken in, though he made the appropriate crunchy objection:

Do we really want to support a system that guarantees us cheap produce but does so at the expense of exploiting these workers, driving down US wages, and causing all kinds of social disruption?

But in fact, mass immigration — illegal or legal, “temporary” or permanent — doesn’t really have much impact on prices. Firstly, all unskilled labor (immigrants and natives) contributes only about 4 percent to GDP, which is natural, since unskilled workers are so unproductive. Specifically with regard to fruits and vegetables, farmers get only a small share of the retail price of produce, and farmworkers get only a small share of that. As agricultural economist Phil Martin wrote a few years ago:

If a 40 percent farm-worker wage increase were fully passed on to consumers, and if there were no farm productivity improvements in response to higher farm wages, the 5-6 cent farm labor cost of a pound of apples or a head of lettuce would rise to 7-8 cents, and the retail price would rise from $1 to $1.02-$1.03.

So we’re doing all this to save three cents on a head of lettuce.