Automation answer to artificially high wages

NZ First wants a minimum wage of $20 an hour. The party also wants less immigration.

A higher minimum wage and fewer migrants are being promoted by other parties on the left too.

The dangers of that can be seen in the UK where British farms are preparing to work with fewer seasonal workers after Brexit:

The production of strawberries, raspberries and other berries has increased from some 60,000 tonnes a year to over 140,000 tonnes, and these are picked almost entirely by migrant workers from the EU. In 2015 about 85,000 seasonal agricultural workers came to Britain, 30,000 or so of them to pick fruit. As a recent report by Andersons Farm Business Consultants concludes, without EU labour the sector’s recent growth “would not have been possible”.

As Britain prepares to leave the EU and probably end the free movement of workers from the continent, farmers are scrambling to find farm hands. But they are also exploring more rigorously the alternatives to a bountiful supply of cheap labour, such as using more automation and increasing existing workers’ productivity. . .

There is no doubt that farmers are struggling to find workers. There are some Brexit-related reasons for this: the pound has fallen precipitately against the euro; and Britain is now often perceived to be “a xenophobic and unfriendly country”, says John Hardman, a director of one recruiting agency, HOPS Labour Solutions.

But the shortfalls also reflect structural shifts in the EU economy, in particular the rising prosperity, and higher wages, of those countries such as Poland and Romania that have historically supplied workers to Britain. . . 

Alison Capper, who chairs the horticultural board of the National Farmers Union, a lobby group, says that some British farmers are now having to make decisions “as to what to pick and what to leave”. But for now there is unlikely to be a lot of fruit left rotting in the fields. And to forestall such an eventuality, many in the industry have been heeding the government’s advice, to recruit more British workers, automate, or become more efficient—but with very mixed results.

Trying to recruit more British workers has, in the words of Mr Hardman, been a “staggering disaster”. He has managed to get only a handful of Britons out of 12,000 recruits sent to 225 farms. Money is not the main problem. Many farms pay above the minimum wage of £7.50 ($9.65) an hour, and fast pickers can earn up to £12 on piecework. But most Britons seem not to want to move to where the farms are, nor to take up jobs that only last for the season and involve getting up at 5am to work outdoors.

This is not confined to the UK. New Zealand horticulturists have the same problems, though ironically some of the migrants who will do the work here are from the UK.

Robots, on the other hand, are perfectly happy with such conditions, and are getting ever more dexterous at picking hard fruit, if not the squishier sort. Machines to pick strawberries and apples are already in use. They can pick at only about one-third the rate of a human, and farmers reckon that they miss about 15% of the crop. But they can make up for that by working 24 hours a day. They are expensive, though: one of the most popular strawberry-pickers costs about $250,000. Most farmers estimate that their large-scale deployment could still be a decade off.

As more businesses use robots and technology improves the cost will come down.

In the interim, farms have been trying to wring more productivity out of their existing operations. Many have invested in metal tabletops to grow strawberries so that workers can pick them more quickly. Farmers now grow particular strains that produce more fruit over a longer season, such as ever-bearing strawberries. Others are spending more time on training their pickers. One farmer, Harry Hall, says that he has been able to improve his workers’ picking speeds by about 15% this year. Valya, a Bulgarian university student working on his farm in Twyford, 50km west of London, says that whereas she started out picking raspberries at 9kg per hour, after training she can pluck 11kg. . . 

Increased productivity is better for workers, businesses and the wider economy.

But artificially boosting wages through an increase in the minimum wage would add costs to businesses which would be passed on to consumers.

And if immigration is cut the problem will not be how much each worker can do, but how to get the workers who are willing and able to do the work.

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