Meat industry: Sizing up how labor affects meat prices
Saturday, November 29, 2008
Meat industry: Sizing up how labor affects meat prices
TONY LEYS
Posted at 15:50 on 11/29/2008
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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.
Working conditions and pay vary dramatically from plant to plant, said Mark Lauritsen, a vice president for the United Food and Commercial Workers union.
Meatpacking is dominated by a handful of large companies, and most sell their products under a variety of labels, said Lauritsen, whose union is the largest in the industry.
The picture is muddied even more by the fact that many grocery stores repackage meat without including labels from the original processor. "If you really want to be an informed consumer, you'd have to ask the butcher," he said.
Generally, Lauritsen said, unionized plants tend to pay more, have better working conditions and give better health insurance and other benefits. He said a little more than half of workers in beef and pork plants are unionized; about a quarter of chicken-processing workers are unionized.
Union workers can expect to make at least $12.50 to $16 per hour in beef and pork-processing plants, he said. Agriprocessors, the nonunion Postville plant that has drawn attention and criticism, raised its starting wage for most workers to about $10 per hour after it was raided.
Even with a union and relatively high wages, packing plants tend to rely on immigrant labor, Lauritsen said. That has always been true, except for a brief period during the 1960s and '70s, when unions and wages were at their zenith, he said.
Lauritsen said he believes that most immigrant packing-plant workers are in the country legally. But a union presence does not preclude problems. For instance, his union represents workers at the Swift plant in Marshalltown, where federal agents arrested 90 workers in 2006 and accused them of being in the country illegally.
Janet Riley, a vice president of the American Meat Institute, acknowledged that her industry relies heavily on immigrant labor. She said that's partly because most meatpacking plants are in rural areas, where American-born workers tend to be scarce. "Foreign-born workers are eager for labor, and they're willing to move to rural areas," she said.
Decades ago, most meatpackers were in cities. Even then, Riley said, many of their workers were immigrants looking for a place to start. She disputed many labor activists' contention that the plants moved to the countryside to avoid unions. "They moved out because it made more sense to go out to where the livestock are," she said. She estimated that 60 percent of meatpacking workers are now unionized, a much higher level than most other industries. She said wages are good, considering that many workers lack a high school diploma.
Riley said the packers who belong to the American Meat Institute process 90 percent of the U.S. market's meat. However, she said, Agriprocessors is not a member.
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