Minimum Wage Increase will have a Maximum Impact

Minimum wage is an artificially increased cost of operations. That cost will promote inflation in the cost of goods and services throughout the produce industry.

An entry-level job is not designed to support a family. An entry level worker is not expected to bring an “A list” of skill sets to the workplace. The requisite skills needed to pack produce in a carton do not include an engineering degree based on corrugated manufacturing or a PhD in plant pathology to recognize the postharvest handling conditions of the produce. The market should be allowed to set the wage and benefits necessary to attract and retain qualified employees for each job, within each industry, at each geographic location.

The ripple effect of artificially increasing a $7.50 per hour wage to $9.50 per hour includes increasing the $9.50 per hour wage to $11.00 per hour as well as the $11.00 wage to $12.50 and the $12.50 wage to $13.50 and the $13.50 to $14.50 and $14.50 to $15.00.  When looking at a production operation where efficiencies are tracked and refined through lean processes, there is nowhere to absorb this overall 20% increase in direct labor expense.

The three cents per minute of average wage increase sounds minute, but amounts to $3,744 per employee on average multiplied by the thousands of employees in our operational sector – you can see were inflation will come into play.

Just like with the Mexican tomato agreement, the more artificial pressure put on our industry the less likely we are to sell our products.