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Kashkari Admonishes Capitalists to Practice What They Preach, Stop Excusing Low Wages

Published 2019-07-17 by Cory Allen Heidelberger

It pains me to have missed Neel Kashkari’s visit to Aberdeen last week, but I am pleased to see that the Minneapolis Fed chief brought the same stop-whining message to Aberdeen business leaders that he brought to Sioux Falls a couple years ago. Kashkari reminded business owners who complain about a shortage of workers that they get what they pay for:

“Businesses and farmers are always telling me that we have a historic worker shortage. They’re not raising wages,” Kashkari said.

“Typically, if you want more of something, you have to pay for it. If the price of corn goes up and it’s an input to your business, or the price of oil goes up, or the price of steel, businesses shrug their shoulders and go, ‘Yeah, the market price went up, but I’ll pay it.’ But if I can’t find workers at prices I’m used to paying, it’s a historic worker shortage. I don’t know why the reaction is so different,” he said [Shannon Marvel, “Drug Testing, Low Wages Make It Difficult to Fill Local Jobs {paywall},” Aberdeen American News, 2019.07.13].

Kashkari’s call for higher wages doesn’t sound like radical liberalism; it sounds like common-sense capitalism.

Published in South Dakota

19 Comments

  1. Nick Nemec

    Amen.

    When the oil fields of North Dakota needed workers employers there bit the bullet, wages rose and people from all over the country beat a path to the cold, remote, sparsely populated northwest corner of North Dakota.

    The laws of supply and demand apply in South Dakota too.

    2019-07-17
  2. Wayne B.

    Mr. Nemec,

    The difference is the oil fields were a boom/bust cycle, and when the market commanded $100+ per barrel, then paying people high wages to quickly capitalize on those high oil prices made a lot of sense. When crude prices fell, there companies scaled back, and people left ND.

    The challenge is farmers don’t have a lot of options for passing costs on to the buyer, and grain prices are once again what they were decades ago. Farmers can’t pay enough to encourage people to move to rural America.

    Kashkari would be welcome to do some actual investigation into the challenges of agriculture:

    https://farmdocdaily.illinois.edu/2018/08/corn-soybean-budgets-2018-2019.html

    2019-07-17
  4. Steve Pearson

    A minimum wage law increase won’t fix the problem. The continued pain they go through will until they do what is needed. But I also wonder if there are actually people up that way available. People shortage is real, not tied to wage….

    2019-07-17
  5. Nick Nemec

    I know more about farming than most people. Farms that require tons of outside labor are too big. It is the excess production of the giant dairy and hog farms that depress the prices for commodities like milk and hogs.
    But what is the solution for lack of workers? In agriculture the answer is to hire immigrants, legal or otherwise, and pay them only enough to keep them around until they master English and can move on to better paying jobs. Some of the other industries have taken the position of whining about not being able to find workers and want some government solution. This from businessmen who as a group claim to be free market capitalists.

    2019-07-17
  6. Steve Pearson

    They aren’t just looking for a govt solution. They are looking for any ideas to help. A lot of farms are bringing up Mexican citizens via NAFTA and the TN visa which is great and easy/cheap. If only we could make work visa’s easier for other people from other countries outside of Canada and Mexico. But we won’t. The dems will continue to battle cry for illegals (YES ILLEGALS regardless of your “triggered” BS you claim) when there are millions that come to the US for education, work situations legally and need sponsorship. We should fast track that realm better because those are HIGHLY QUALIFIED people. That is the key for our economy.

    2019-07-17
  8. Roger Cornelius

    “call those people what they are”, sounds triggered to me

    2019-07-17
  9. Debbo

    Yes, Steve sounds very triggered whenever anyone does not refer to immigrants and refugees in derogatory terms. Steve, there is help available for that and Safe Spaces if DFP gets to be too much for you.

    2019-07-17
  10. Debbo

    As for capitalism, scarcity brings higher prices according to market forces. I guess businesses that are complaining about worker shortages know what to do. (I don’t mean calling on government to fix their problems.) Be Capitalists!

    2019-07-17
  11. jerry

    Very good points Mr. Nemec. Now, what is going to happen with agriculture without the insects that we need? trump now wants to kill the bees, what a douche he is. Climate emergency, indeed.

    “Scientist Brad Lister returned to Puerto Rican rainforest after 35 years to find 98% of ground insects had vanished

    “We knew that something was amiss in the first couple days,” said Brad Lister. “We were driving into the forest and at the same time both Andres and I said: ‘Where are all the birds?’ There was nothing.”https://www.theguardian.com/environment/2019/jan/15/insect-collapse-we-are-destroying-our-life-support-systems

    American capitalism depends on agriculture always has since the ink was still wet on the Constitution. Without American production, the world and us are sunk and yet trump and company play games with it. Agriculture needs markets that will pay what is required to turn a real profit and get away from the bankers of Wall Street.

    2019-07-17
  12. bearcreekbat

    Pearson links a video of Obama and an article about the Obama administration and then claims:

    There’s SO many more examples of Dems calling them illegals

    Problem is in the video Obama never once called an immigrant an “illegal,” nor an “illegal immigrant,” nor an “illegal alien.” Intentionally, or carelessly, Pearson has misrepresented the content of his links in an effort justify his submission to the Trumpist branding of immigrants in an effort to justify cruel policies.

    Incidently, here are a few comments from Pearson’s Obama link that are worth considering.

    . . . For more than 200 years, our tradition of welcoming immigrants from around the world has given us a tremendous advantage over other nations. It’s kept us youthful, dynamic, and entrepreneurial. It has shaped our character as a people with limitless possibilities –- people not trapped by our past, but able to remake ourselves as we choose.

    . . .

    Undocumented workers broke our immigration laws, and I believe that they must be held accountable -– especially those who may be dangerous. That’s why, over the past six years, deportations of criminals are up 80 percent. And that’s why we’re going to keep focusing enforcement resources on actual threats to our security. Felons, not families. Criminals, not children. Gang members, not a mom who’s working hard to provide for her kids. We’ll prioritize, just like law enforcement does every day.

    . . . -– tracking down, rounding up, and deporting millions of people . . . [is] not who we are as Americans. After all, most of these immigrants have been here a long time. They work hard, often in tough, low-paying jobs. They support their families. They worship at our churches. Many of their kids are American-born or spent most of their lives here, and their hopes, dreams, and patriotism are just like ours. As my predecessor, President Bush, once put it: “They are a part of American life.”

    . . .

    Are we a nation that tolerates the hypocrisy of a system where workers who pick our fruit and make our beds never have a chance to get right with the law? Or are we a nation that gives them a chance to make amends, take responsibility, and give their kids a better future?

    Are we a nation that accepts the cruelty of ripping children from their parents’ arms? Or are we a nation that values families, and works together to keep them together?

    Are we a nation that educates the world’s best and brightest in our universities, only to send them home to create businesses in countries that compete against us? Or are we a nation that encourages them to stay and create jobs here, create businesses here, create industries right here in America?

    . . .

    Over the past few years, I have seen the determination of immigrant fathers who worked two or three jobs without taking a dime from the government, and at risk any moment of losing it all, just to build a better life for their kids. I’ve seen the heartbreak and anxiety of children whose mothers might be taken away from them just because they didn’t have the right papers. I’ve seen the courage of students who, except for the circumstances of their birth, are as American as Malia or Sasha; students who bravely come out as undocumented in hopes they could make a difference in the country they love.

    These people –- our neighbors, our classmates, our friends –- they did not come here in search of a free ride or an easy life. They came to work, and study, and serve in our military, and above all, contribute to America’s success.

    . . .

    . . . a young woman named Astrid Silva. Astrid was brought to America when she was four years old. Her only possessions were a cross, her doll, and the frilly dress she had on. When she started school, she didn’t speak any English. She caught up to other kids by reading newspapers and watching PBS, and she became a good student. Her father worked in landscaping. Her mom cleaned other people’s homes. They wouldn’t let Astrid apply to a technology magnet school, not because they didn’t love her, but because they were afraid the paperwork would out her as an undocumented immigrant –- so she applied behind their back and got in. Still, she mostly lived in the shadows –- until her grandmother, who visited every year from Mexico, passed away, and she couldn’t travel to the funeral without risk of being found out and deported. It was around that time she decided to begin advocating for herself and others like her, and today, Astrid Silva is a college student working on her third degree.

    Are we a nation that kicks out a striving, hopeful immigrant like Astrid, or are we a nation that finds a way to welcome her in? Scripture tells us that we shall not oppress a stranger, for we know the heart of a stranger –- we were strangers once, too.

    . . . .

    https://obamawhitehouse.archives.gov/the-press-office/2014/11/20/remarks-president-address-nation-immigration

    It may have been a mistake on Pearson’s part – I hope not – but I thank him for posting these inspiring words, and hope that they will be considered next time someone is about to regurgitate Trump branding propaganda!

    2019-07-17
  15. mike from iowa

    There was a perfectly good plan in place and Drumpf threw a hissy fit, got rid of the program and replaced it with nothing. When the troubles piled up, Drumpf blames his predecessor and claims there is an emergency on the border. All self inflicted and illegal denials of asylum seekers and detentions of children away from parents, including permanently

    Drumpf and wingnuts can’t/don’t fix the problems they create, they exacerbate them so Dems have to right the ship so wingnuts can attempt to destroy America again with the same ideas..

    2019-07-18
  16. bearcreekbat

    Dale, just out of curiosity what other groups of people that have broken the law do you call “illegals?'” I have never seen another post by you calling any other group “illegals,” not even groups of people who have actually committed violent crimes or serious property crimes, rather than immigrants accused of, but not yet convicted, of a mere victimless misdemeanor or administrative transgressions.

    How do accusations of such minor victimless misdemeanors or non-compliance adminstrative rules “motivate” you (since you don’t like the term “trigger”) into calling someone an “illegal” anything, in contrast to all other crimes?

    2019-07-18
  17. leslie

    Capitalism. All the moon walk media coverage is exploding. Water may exist in ever-dark craters. Ka-ching. The socialist science project that got us there was full of red neck engineers and pilots who were paid well but we have lost all that expertise; while and some corporations got very very rich—Boeing ect; Apple ect.

    Until we change our democratic government system in depth to serve the people, not the 1%, “progress” in any field is just hype.

    Impeach Trump ect.

    Win the election.

    Act on climate change.

    Eliminate economic inequality.

    This will destroy the Republican party.

    2019-07-19
  18. Jerry Hoekstra

    Having a Jekyll Island creature lecture Aberdeen on wages ought to be good for comic relief. I think that is called chutzpah by most people.

    I once heard a local politican talk seriously about building on the Bank of North Dakota concept.

    When the late great Arron Russo interviewed the director of the irs — Russo ended up getting yelled at in Yiddish. Our gangster, bankers may be too big to fail, but that does not mean throwing the money changers out of the temple is not an honerable sentiment.
    thanks,
    Jerry

    2019-07-20
  19. Cory Allen Heidelberger

    (Jerry H, is belching angry hatred of Jews your default response to having nothing specific or evidence-based to say about a topic? I get the impression that conversations with you are generally unpleasant and uninformative.)

    2019-07-20

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