Posted on 12/16/2003 11:48:42 AM PST by Willie Green
For education and discussion only. Not for commercial use.
FAIRVIEW -- Townsend Farms laid off a 40-person shift of workers last week and will decide within three years whether to move its re-packing operations to Mexico.
Mike Townsend said the region's largest berry packer lost two large customers this fall. He attributes the problem to higher costs due to the higher Oregon minimum wage narrowly approved by state voters in November 2002. The wage makes the farm less competitive in the world market, he said.
On Jan. 1, the Oregon minimum wage rose 40 cents to $6.90 an hour, with future annual increases pegged to the Consumer Price Index, a federal cost-of-living measurement. The wage will rise in January to $7.05 an hour. The federal minimum wage is $5.15 an hour.
"A $1.10 an hour difference to us is $700,000" a year, Townsend said. "We have to increase our prices because of our whereabouts. . . .The bottom line is you can't keep going forever under these wage increases."
Townsend Farms packs blueberries, marionberries, black raspberries, raspberries and strawberries at its plant in Fairview. The processor is also a grower, farming about 1,200 acres in the region from Battleground, Wash., to Grants Pass.
In the summertime, Townsend Farms employs up to 2,000 people; in the winter, about 240. The layoff brought that number to 200.
In Mexico, the processor would only have to pay workers about $2 an hour, Townsend said. If the farm moves the repacking plant to Mexico, more than 175 year-round jobs would go with it. About 20 jobs would remain here.
Although the company would have to truck frozen berries from Oregon to the repacking site in Mexico, a Mexican plant might be closer to the berries' ultimate destinations in California, Texas, Florida and the Midwest, Townsend said.
Higher minimum wages are among several issues affecting Oregon's food processors, said Oregon Department of Agriculture Director Katy Coba, who will meet with Townsend and other processors in a brainstorming session on Friday. Others include escalating water and wastewater costs in Oregon and increasing competition from foreign countries where labor and other costs are low, she said.
"There are a number of food processing facilities that have shut down, particularly in the Willamette Valley," Coba said. "That's one of the reasons we're pulling the industry together (Friday). We don't want that to happen. We don't want Mike Townsend to move his repack to Mexico."
At this point, Townsend said, he would support legislation that would limit the effect of the Consumer Price Index on the minimum wage. It also is possible that food processors, restaurant owners and nursery people could campaign together to repeal the new wage, he said.
"If they don't, they're going to continue to see a reduction in their manufacturing base in Oregon," he said.
I picked strawberries during the summer for several years. We got $1.00 per flat. It’s not particularly hard work either. It’s tedious, and your hands will still be stained red a week after the season is over, but there’s nothing difficult about it.
FMCDH
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