Meat industry: Sizing up how labor affects meat prices

[Omaha Steve]

http://www.desmoinesregister.com/article/20081129/NEWS/81129010/1001/NEWS

TONY LEYS • [e-mail] • November 29, 2008

How much more would consumers have to pay for meat if the United States deported all illegal immigrants and clamped down on the flow of legal immigrants?

Probably a few percentage points, experts say.

Immigration critics have called for a crackdown, and they've expressed frustration when federal agents arrest illegal workers at meat plants. They've said that without immigrant labor, meatpackers would have to raise wages to attract enough U.S. citizens. That inevitably would increase food prices, but not as much as consumers might fear.

Marv Hayenga, a retired economics professor at Iowa State University, said meatpackers generally keep a tight grip on cost information. But he pointed to a federal study done several years ago, in which packers agreed to participate if they weren't identified. That study found that manufacturing costs, which include meatpacking labor, were estimated at 11 percent of the wholesale price.

Hayenga, who studied the industry for years, noted that grocery stores routinely add about 20 percent to the wholesale price before putting their wares in the cooler. Keeping that in mind, he said, it's safe to conclude that packing-plant labor accounts for less than 10 percent of what consumers pay for their meat.

In other words, if meatpackers suddenly had to double their wages, a pound of ground beef that had sold for $3 might increase to roughly $3.30.

FULL story at link.

[jwirr]

1. My brother worked in a pack before he was replaced with immigrant

labor. He made a good living. As to the cost I think the workers now make about as much as he did. One reason why it is hard to find workers for packs is that it is one of the most dangerous jobs around. My brother donated his back, knees and a couple of fingers to the cause.

This is one industry that would probably be helped by a national health care plan. Their cost would go down.