We all know that most farm workers live in a state of abject poverty. Having said this, just how much more would we have to pay for agricultural products, such as lettuce, if farm workers were paid a decent living wage? That's the sixty four thousand dollar question. Economists at the University of California Davis have studied this issue at some length, I believe the results of their research will surprise you.
Presently, a head of lettuce costs $2.99 at WalMart. Only six percent, or 17.94 cents of what consumers pay for the lettuce goes to the farm workers who raised it. Ninety four percent, or $2.81 of the cost of that head of lettuce goes to the farmer, truckers, middle men and retailers. At present the migrant workers who cultivate and pick the lettuce are paid a mean annual wage of around $13,500. The vast majority of these workers are illegal aliens from Mexico because Americans refuse to perform stoop labor for a meager $6.50 an hour, and rightly so I might add.
Now back to the question I originally asked. What would the head of lettuce cost at WalMart if farm workers were paid a decent wage? Let's say $26.00 an hour or approximately $54,000 a year? The cost paid the farmers, trucks, middle men and retails would remain unchanged at $ $2.81 but the farm labors share of the pie would increase four times to 71.76 cents a head; thus, the cost of a head of lettuce, that originally cost $2.99 when produced by wages approaching slave labor, would cost a whopping $3.53 if produced by workers who were paid a decent wage. How many people, do you think, would stop buying lettuce if they had to pay $3.52 a head for it rather than the $2.99 it now costs when Mexican illegal's produce it? More importantly, do you think Americans would be willing to work in fields if they were paid $54,000 a year to do so? I think the answer to both of these hypothetical questions is obvious, don't you.
What would it cost if all illegal aliens were kicked out and farm labor was performed by the millions of welfare parasites, in exchange for their "benefits"?
Let me answer your question in this way because you bring up many points in the rest of the post.
First, one needs to understand that produce is not a permanent product. It begins to deteriorate as soon as it is picked. Meaning it is perishable.
Secondly, produce as well as the labor is subject to the Law of Supply and Demand. Meaning the price that grower receives depends upon the shortness or abundance of supply. In that the more abundant the supply is, the less the grower will receive per unit. The converse is true as well.
This holds true for the laborer as well. If labor is short in supply, then the individual laborer can charge more for his skills and he does. Again, the converse is true as well.
Then there is this little kicker that is not taken into consideration. If production exceeds supply, and the grower can see no way of breaking even with his land cost, planting costs, his growing costs, and the labor cost, then he will plow the crop under into the soil. At that point the grower looses, but he has reduced his loss and the laborer doesn't get paid because he can't work.
As far as the price at retail is concerned, the retailers know, approximately, how much volume will be sold at a particular price. They then allow the appropriate amount of shelf space to accommodate that volume of sales.
If they charge a higher price they know that the sales volume will be less, so they will reduce the amount of shelf space to accommodate that volume of sales.
The consumer bases her purchases on value for the dollar spent. Retailers have studies on this just like the insurance industry has studied and produced the actuarial tables.
Finally, I have given tours of the facilities that I have operated at the request of college professors. I have found that they have the same misconception of the produce industry and the workers in it that the economists you mention have. And, they impart this misconception to their students. Why? Because they haven't worked for a living and produced any wealth. They have spent their entire lives in the educational industry without any practical, hands on experience. It is easy to theorize, but any theory is a simplification of reality.
Calvin Cooledge, when asked if he followed the advice of economists, said that an economist for a person who observed reality and then tried to find a theory to fit.