Finding parity in businessFinding parity in business
Autoworkers and farmers receive a small percentage of the sales value for the products they produce. How do we walk the line between financial parity for those who labor in this country and profit opportunity for the companies that contribute to our economy?
October 12, 2023
With this comment United Autoworkers President Shawn Fain grabbed my attention on a recent Sunday morning:
"First off, labor costs are about 5% of the cost of the vehicle," Fain said. "They could double our wages and not raise the price of the vehicles and still make billions in profits. It's a choice.”
Call it an Oh! moment, an epiphany, or the great ah-ha. But when that comment broke through like God speaking in my kitchen, I thought: They’re fighting the same battle as farmers.
USDA data shows that farmers receive 14.5 cents of the food dollar. Farmers get paid about 33 cents for the peanuts that go in a one-pound jar of peanut butter. And dairy farmers aren’t paid anywhere near $5 for that pound of butter we’re buying at the grocery store.
The UAW is bringing forward an essential disconnect in the U.S. business model. Though I suspect unions outlived their usefulness some time ago, I see value in figuring out how to right-size the U.S. business model. After the UAW wrecks the store perhaps agriculture can be among the industries to help put together the pieces of the company store in a way that provides more parity.
It's an issue that crosses all cultures, every political party, every industry. The question of how we economically support the folks who deliver the goods is fundamental to our way of life. It comes down to the way we spend our personal money, the way companies structure their spending, and the way our governments structure taxes and corporate law.
And it should be a question we ask ourselves every time we spend $1. For instance, if I buy a tomato grown in Mexico while supporting higher wages for H2A workers in the United States, I’m failing the American farmer. By making decisions to buy socks made in another country because they were cheaper, we lost sewing factories across the Southeast.
The answer to this dilemma isn’t as simple as choosing to buy US-made or US-grown. The answer lies in changing many economic aspects of our traditional structure. It’s changing the way companies structure their spending. It’s changing the way we tax U.S. companies versus foreign companies that operate here.
Can U.S. companies spend more on labor and stay economically sustainable? Can they pay a higher cost for U.S. materials and still make a profit? As it stands, a set of cotton sheets grown and produced in this country carries a much higher price than my family can afford. Yet paying a peanut farmer only 33 cents for the peanuts in a jar of peanut butter does not economically sustain that farm.
How do we walk the line between financial parity for those who labor in this country and profit opportunity for the companies that contribute to our economy? It’s time for us to walk that walk.
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