A federal judge has put a temporary stay on a 50% wage hike the Department of Labor had ordered for blueberry pickers.
In arguing against the order and that the hike should go through, the government once again demonstrated a thorough lack of understanding about agriculture and economics.
Zirkle Fruit is a large fruit producer. This season it has 1,900 domestic and H-2A workers. The DOL approved the company’s H-2A applications this year with a wage for blueberry pickers of 50 cents per pound.
On July 24, Zirkle received a DOL notice that the state’s prevailing wage for blueberry harvest had increased from 50 cents to 75 cents per pound based on state Employment Security Department wage surveys.
The company filed suit Aug. 7. It said the wage hike would increase the cost of harvesting the 5 million pounds of berries still in the field by as much as $1.4 million when breaks and added payroll taxes were taken into account.
“Enforcing an unprecedented wage jump rate like this would cause plaintiff to suffer a sudden, unsustainable and financially calamitous increase in labor costs in the middle of harvest,” Zirkle’s complaint said. “This increase will wipe out virtually any and all anticipated profit.”
The government argued that Zirkle’s profit wasn’t relevant in the case. To cover the hike, the government claimed during a hearing last week, Zirkle needed only to increase the price of its blueberries.
The government continues to believe that farmers are price makers instead of price takers. Zirkle’s buyers would go elsewhere if the price went up 25 cents a pound. It’s the nature of the market.
Profit is always relevant. Zirkle doesn’t exist to employ pickers. It’s in business to make a profit and employs pickers to accomplish that goal.
That’s Capitalism 101.
When it becomes cheaper to automate picking, pickers will lose their jobs. Zirkle says that if the wage hike stands, it will switch to mechanical harvesting.
To his credit, Judge Salvador Mendoza Jr. has a better grasp than the government of how business works. “Is Zirkle in this as a hobby?” he asked rhetorically.
Indeed, it is not.
The fruit industry is at odds with the methods used by the state Employment Security Department to determine prevailing wages. There’s no good way to determine average costs because there are so many variables.
Growers who rely on H-2A workers have to hire those employees before the state has determined that prevailing wage.
The DOL signs off on a proposed wage in January, but can raise it in July after the work is already in progress. What better example could there be to demonstrate the government’s lack of understanding?
The wage hike should not stand.