Friday, September 23, 2016

Did Bill 6 destroy Western Feedlots? Probably not.

One of the bigger Alberta news stories last week was the announcement that Western Feedlots will close by early 2017. At three sites, Western Feeders employs about 80 staff and has the capacity to finish 100,000 cattle. According to the company’s announcement:
Western’s shareholders chose this course of action due to the current high risk/low return environment in cattle ownership, which is inconsistent with shareholder objectives. In addition to strong headwinds in the cattle industry, the poor political and economic environment in Alberta are also contributing factors to this decision.
The major factor that appears to be driving this closure is a significant decline (~30%) in the price of slaughter-weight cattle. A fed steer brought in about $3000 last year and now sells for $2000.

Basically, a shortage of cattle drove up prices over the past two years. Producers responded by increasing the supply and, consequently, the price dropped (there are other factors at play but this is basically micro-economics 101). The lag time involved in finishing cattle means that feedlots are now forced to sell finished cattle at a significant loss (one number I saw was $500-600 per head).

Western Feedlots noted it will be maintaining its equipment. This suggests the operation may re-open when economic circumstances change. Indeed, a temporary closure may be the most sensible option available: as long as prices keep falling, feedlots will keep taking losses.

There has also been significant speculation that Alberta’s recent changes in labour law and its intention to introduce a carbon levy have also contributed to the closure. The company itself as much as said this with its mention of a “poor political and economic environment in Alberta”. The argument goes that the industry has low profitability (averaging $18/head or somewhere around 1%) and thus has limited capacity absorb cost increases.

The Alberta Cattle Feeders Association is estimating the carbon tax will add $6-7 in cost per head. The only certain cost of providing agricultural workers with basic employment rights are WCB premiums. These sit between $2 and $3/$100 of payroll (I can’t estimate the per head cost because there are too many unknown variables). There may be other costs depending upon the government’s decisions around what portions of the Employment Standards Code and which occupational health and safety rules apply to farms, but none of that is clear.

Edit: The Herald published a story Friday night where one operator estimates WCB costs at $2/head and overall profitability at $20-$30/head.

I’m increasingly sympathetic to the cost-price squeeze faced by commodity producers. That said, I’m pretty skeptical that closure is really (or even marginally) due to WCB premiums and a future carbon levy. The driving factor seems to be free-falling commodity prices in a low-margin industry.

For the sake of argument, though, let’s momentarily accept that WCB premiums and the carbon levy are the proverbial straw that broke the camel’s back, making this operation unprofitable. What does this say about Western Feedlots (or, if you accept the canary-in-the-coal-mine argument being advanced online, the entire agricultural industry)?

In short, it says that these businesses are only viable when they can externalize the cost of production onto others. These externalities are borne by employees in the form of uncompensated injuries and poor working conditions, and by society (and the planet) in the form of unsustainable carbon emissions.

I don’t accept the camel and canary arguments, but, if we do, then we should ask if it is in the public interest to have such businesses continue. In a truly free market (which truthfully account for the true cost of production), shouldn’t they go out of business as unprofitable?

I don’t say that to be nasty (I feel quite badly for the 80 workers who will be out of work). But a business that is only viable if it can harm others isn’t one that’s existence is in the public interest.

And, before we accept the “and so it begins!” catastrophizing being bandied about by opponents of Bill 6 (and other government initiatives), it is worthwhile thinking through what is actually happening and ask ourselves if the rhetoric around this closure is accurate.

-- Bob Barnetson









Labour & Pop Culture: Geraldine

This week’s installment of Labour & Pop Culture is “Geraldine” by GlasVegas. You don’t hear a lot of songs about social workers so I initially thought the social worker in this song was simply a metaphor for the care that we all provide to others.

As it turns out, Geraldine is an actual social worker who quit her job to join GlasVegas on the road. According to Wikipedia (which is never wrong…), her official job is selling merchandise. But there is some suggestion she also provides support to one of the band members.

From a labour perspective, this kind of support is often a part of the unpaid duties (normally performed by women) to ensure social reproduction. Certainly these duties can be hired out (hence the professional of social workers) but, more often, they are done informally and without pay.



When your sparkle evades your soul
I'll be at your side to console
When your standing on the window ledge
I'll talk you back, back from the edge
I will turn, I will turn your tide
Be your Sheppard and your guide
When you're lost in the deep and darkest place around
May my words walk you home safe and sound

When you say that I'm no good and you feel like walking
I need to make sure you know that's just the prescription talking
When your feet decide to walk you on the wayward side
Up upon the stairs and down the downward slide
I will turn, I will turn your tide
Do all that I can to heal you inside
I will be the angel on your shoulder
My name is Geraldine, I'm your social worker

-- Bob Barnetson

Tuesday, September 20, 2016

Local food and working conditions

A friend recently passed onto me an interesting article that examines the local food movement and the working conditions of US farm workers. Essentially, the author examines whether there is any benefit to farm workers from the widely accepted proposition that:
…when we buy locally grown food directly from farms, we not only secure fresher, more seasonal produce, but we also create an intimate, trusting relationship with the farmer. This supposed bond reinforces the common understanding that the local food production process is more wholesome than the industrial agricultural system.
Looking at agricultural workers in New York’s Hudson River Valley, the author finds little difference between local farms and so-called factory farms in who the workers are or their working conditions. Many workers were foreign born and working illegally, had limited English-language literacy and often lived on the farm (making the particularly vulnerable to their employer who controls all aspects of their lives).

One of the things this article doesn’t do is consider why farm work is often exploitative. While it is easy to demonize farmers, it is more useful to consider the context farmers operate in. Farmers usually sell undifferentiated products. That is to say, one farmer’s grain or pigs are pretty much the same as the next farmer’s.

Consequently, farmers tend to compete on price. Price competition reflects the profit imperative of capitalism and we see similar dynamics afoot in manufacturing. Basically, the “big box price” grinds its way back up the supply chain to land in producer’s laps as low prices.

There are other commodity-based factors at play, such as risk of spoilage, gluts and shortages, etc. Farmers also have little control over input costs (e.g., seed or stock, machinery, fertilizer or feed). The upshot of this overall dynamic is that farmers have been caught in a long-term cost-price squeeze: the cost of inputs typically rises faster than the value of outputs.

One of the few cost factors farmers can control is labour costs. Some farms manipulate this cost through self-exploitation (farmers work harder and/or off-farm). Other farmers seek to minimize the costs associated with hired labour.

Although some farmers may be able to charge a premium for their products by differentiating them (e.g., selling at urban farmer’s markets or finding some sort of unique niche), most will be unable to do so. Consequently, we shouldn’t be surprised if we find that the working conditions on “local farms” mirror those on the much maligned “factory farms” (as the article author did). This dynamic also suggests that there isn’t likely to be a market-based solution to farm working conditions.

-- Bob Barnetson


Friday, September 16, 2016

Labour & Pop Culture: Superstore

This week’s installment of Labour & Pop Culture is not a song. Instead, I’m going to plump for the sit-com “Superstore” that premiers its second season on Thursday, September 22 on NBC.

Superstore follows the adventures of workers in Cloud 9, a big box store where employees have to say "Have a heavenly day" to customers but otherwise can't discuss religion in the workplace.

There have been lots of shows set in workplaces (e.g., The Office, WKRP). What sets Superstore apart is its very clear commentary on the precarious and crappy employment conditions that its characters face and how they cope with them.

The first season (available on iTunes) starts out a bit uneven, with newcomer Jonah trying to fit in with various veteran workers. The sight gags in the first few episodes are funny. As the characters start to get established, attention shifts to some fairly typical corporate HR practices (e.g., corporate magazine profiles, racist job assignments, internal sales competitions, secret shoppers, anti-union animus). More interesting is how these practices lead to disengagement, cynicism and (strangely) Stockholm-syndrome behaviours.

The season finale (episode 11—short first season) sees the workers accidentally trigger corporate panic over the possibility of a union. The real issue is the workers want maternity leave for one of their coworkers who is otherwise planning on giving birth in the store because she needs the shift. The resulting union avoidance techniques actually catalyzes the workers to strike (and one scab seizes the opportunity to curry favour and advance her career).

Overall, this is pretty sharp (and socially critical) writing for network television and the second season appears to pick up with a strike.

-- Bob Barnetson



Tuesday, September 13, 2016

Research: Farm safety for children in Sweden

I recently ran across an interesting article from Sweden examining the views of farmers about the health and safety risks faced by children. “Parents' Attitudes to Risk and Injury to Children and Young People on Farms” is an open-access publication so you can read the entire thing by clicking on the link.

Sweden has a graduated system of farm employment, which links the jobs children can do to their age. The analysis and conclusions of the study were interesting and, (I would guess) are broadly applicable to Canadian farms as well:
Most parents know the risks on their farm, but are sometimes careless when working under stress or exhaustion. Some parents wanted more information and some wanted compulsory preventative or safety measures by manufacturers, e.g. a safety belt as standard on the extra seat in tractors. Children’s friends were described as one of the greatest risks for injury due to peer pressure. Some parents mentioned that people who grow up on farms are sometimes ‘blind’ to the dangers. Other parents seemed to overlook the risks and had their children carrying out tasks for which they were not mentally or physically equipped. Some of the tasks the children reportedly carried out on farms contravened Swedish legislation.
-- Bob Barnetson

Friday, September 9, 2016

Labour & Pop Culture: Working for Walmart

This week’s installment of Labour & Pop Culture is “I’m working for Walmart” by Steve Deasy. This song is a straight-forward critique of the Walmart model where the staff are paid so poorly they use the food bank and, in the US, each Walmart store costs taxpayers between $900,000 and $1.75 million per year for social services for its workers.

The really interesting party of the song is how it identifies the Walmart effect on the market place. Basically they crowd out other retailers and drive down local wages:
Gone are all of the good jobs
They all have been outsourced
No more domestic suppliers
No more mom and pop stores 
They only pay you enough so
You have to shop there
The rest is an economic contraction that, in the short, means everyone shops at Walmart and, in the long-term Walmart leaves because it is unprofitable (because it destroyed the local economy).  Of course, the effects are hardly limited to North America. 

Walmart was a major player in what 10 years ago was called the China Price. Essentially, large wholesalers and retailers switched suppliers based on price and manufacturing fled to the cheapest locale (at that time China). The effects on workers (as documented in Alexandra Harney's book) were horrific.



I’m working for Walmart
Started today
I used to build cars but
That all went away
Worked at Wayne Assembly
And Michigan Truck
Now I’m working for Wal*Mart
And I’m down on my luck

I used to be in the union
The UAW Guild
When Ford wanted his workers
To afford what they build
Now I’m working for Wal*Mart
And the bosses don’t care
They only pay you enough so
You have to shop there

I’m working at Wal*Mart
Buy our junk if you please
It’s the best you can get that’s made by
Children overseas
They control the selection
But they don’t lose any sleep
It ain’t made to perfection
But you can get it real cheap

In the beginning Wal*Mart
Was just a discount store
Beat the hell out of K Mart
And then it wanted more
Started selling groceries
Want to be your sole supply
Electronics, computers
They’re going after Best Buy

Take a look at Wal*Mart
See what has unfurled
It’s the biggest company in the
History of the world
We kept feeding the monster
And it grew and it grew
Now I’m working for Wal*Mart
Soon you’ll be working there too

Gone are all of the good jobs
They all have been outsourced
No more domestic suppliers
No more mom and pop stores
Goodbye farmer’s markets
And local hardware too
Don't look over your shoulder
Walmart’s coming for you

-- Bob Barnetson

Tuesday, September 6, 2016

Politics and Alberta's minimum wage

Last week, Public Interest Alberta and the Alberta College of Social Workers released some interesting wage data for Alberta. Almost 355,000 Alberta workers (18.6% of employed Albertans) earn $15 per hour or less. Over 400,000 earn $16 per hour or less.

Not surprisingly, 60% of low-wage Alberta workers are women. PIA and the College conclude that Alberta’s promise to increase the minimum age to $15 per hour by 2018 will make a significant difference to many Albertans and reduce gender inequality. (That said, some groups note that $15 per hour is still below a living wage in 2016, let alone in 2018.)

Interestingly, more than 75% of low-wage workers in Alberta are over age 20, which undercuts the business lobby’s critique that low wages aren’t an issue because they mostly affect teenagers. According to PIA executive director Joel French:
The image of a teenager living in their parents’ basement and working just to earn extra spending money is not the reality for most low-wage workers. Most of these workers are in their prime earning years and are at the stage where they are planning for or are already supporting families.
One way to view PIA’s announcement is as an indication that there is some (not much, but some) unease among Alberta progressives about whether the NDs’ commitment to $15 an hour will stick if the economy remains stagnant. While there is little evidence that minimum wage increases negatively affect employment levels, employer groups have been messaging hard against wage increases.

The ongoing support of a $15 minimum wage from progressive groups both provides political cover for the NDs (“the PEOPLE are demanding it!”) and reminds MLAs about the social equity expectations of key supporters ("the people ARE demanding it!"). And French's repudiation of the stereotype of low wage workers as mostly teens appears to be an intentional attack on the employer lobby's messaging.

-- Bob Barnetson