2005 May 17 Tuesday
Cheap Immigrant Labor, California Wine, And Australian Vintner Automation
Steve Sailer points to an Across Difficult Country post which (and I hope I don't lose you) points to a Professor Bainbridge post which excerpts a Wine Spectator article arguing that cheap Hispanic laborers are needed in the California wine industry.
Hispanics are the backbone of the wine industry, pure and simple, says Pete Seghesio, CEO of Seghesio Family Vineyards in Sonoma County. Year-round, most of the vineyard work is done by Hispanics—everything from pruning vines in the winter months, to thinning grapes and leaves during the growing season, to the actual harvest.
"We can't do what we do without them," Seghesio says. "California cannot make 90-point wines without the hand care of these individuals. We're not Australia, where many of the [farming operations] are done by machines. It's impossible to make the kind of quality wine we're making in California today without this labor force of hands." ... The bottom line, though, is this, says Seghesio: "If people really knew the percentage [of Hispanics working in California] that's driving our economy, there wouldn't be any of this talk from our government."
The UCLA corporate law professor has got the evidence to understand this whining right there in front of him. But he fails to notice it. I bet all my readers already see the problem. But then, unlike Professor Bainbridge (and did I mention he's a corporate law prof at a prestigious university?) they had the advantage of my bolding. Oh, and think about Down Under in the unlikely chance you haven't figured it out yet.
People who do not get paid much are the backbone of California's wine industry because the labor is plentiful. It is plentiful and therefore it is cheap. If it was not plentiful it would cost more. In my youth high priced labor was considered to be a wondrous thing that made America the envy of the world. Some of you may be too young to remember those times. But they did exist and the Democratic Party of those times even thought that high priced labor was a good thing. Really, I'm not making this up.
What is with the California wine industry? Is it impossible for Californa vintners to use machines? Are the wine company owners all just mechanically incompetent and incapable of installing and running and servicing machines? Are there no people in California (maybe in car repair shops?) who could run those Down Under automated gadgets for processing wine? Or are the vineyards too poor to afford machines? No, it can't be that. A lot of those winers are rich people who took up wine making as a hobby. Or are California's capital markets too unsophisticated to be able to provide funds to buy capital equipment? Nope, that's not it. Look at Hollywood, Silicon Valley, and the biotech start-ups in San Diego. Funds are very obviously available.
Being the kind of guy who thinks automation is the road to higher living standards I see the trailing technological edge of the California whine (er, wine) industry as a sign that something is amiss. One wants to ask the professor whether cheap low skilled immigrant labor is a disincentive to innovation and capital investment? Is the necessity born from high labor costs the mother of invention?
Professor Bainbridge then whines:
Unfortunately, if my hate mail is any indicator, Seghosio's wrong. People know and an awful lot of them don't seem to care. They don't want the illegals here, no matter how much they contribute to our culture and economy.
Poor baby. Bainbridge wants locally grown fine wines. He feels culturally uplifted from refined local wines grown by lots of very poor low wage workers. He can't imagine it any other way. Never mind what getting that wine does to the local schools, pollution from crowding, crime rates, welfare rolls, tax rates (which, er, are kinda anti-business, no?), and jail crowding. He's getting his culture from a wine bottle apparently.
Across Difficult Country blogger C. Van Carter sees a form of the "Let them eat cake" attitude coming from the professor.
Speaking of professors, UCLA professor of law Steven Bainbridge observes that without illegal alien serfs, wealthy gluttons like himself would have to pay more to get drunk on California wine. Bring this up the next time you encounter some pathetic slob who doesn't know Merlot from Pinot Noir complaining about illegal aliens ruining his children’s schools or driving up his costs of buying a home, it should shut him up.
When I was a kid (yeah, back when high wages were considered a virtuous state of affairs and the Democratic Party was the party of the working class) I used to think that college profs must know everything. Now I know better.
While I agree with your criticism Randall, I ask you not to be too hard on the guy. He's just some joe talking about his hobby (whether as drinker or grower), rather than someone talking about his field of academic expertise. For instance, if Albert Einstein said the same dumb thing, it doesn't give the reader license to conclude that Albert's academic reasoning is similarly flawed.
As for his comments, well when he said "...without the hand care of these individuals. We're not Australia, where many of the [farming operations] are done by machines...", I asked myself if the 'hand care' actually adds to the quality of the end product. A quick search shows that he also appears to be wrong on that front as there are plenty of Australian wines on the worlds best list. Indeed, that list doesn't appear to have too many Californian wines, so some unkind souls might be prepared to conclude that 'hand care' picking equates to lower quality...
It's a good thing we are subsidizing wine production through 10's of thousands of dollars of government services per laborer. Makes sense to me!
When you can't find any socially valuable function for illiterates to be supposedly indispensable for; appeal to people's feeling that restaurants and specialty agricultural products are a substitute for the advancement of civilization. Even if it were that way, it would be no excuse for the increase in aggression on the net taxpayer. California is pioneering the historically unprecedented defilement of quality of population that is shown by the states school performance diving from the top to the bottom ten percent in only forty years. Such a downfall has never in the history of the world occurred, in a jurisdiction of tens of millions, in so few years. How can the primping of a few vineyards of pretentious character, compensate for such an anticivilizing process as that?
I was not aware that the Australian wine industry was a leader in automation, compared to California. I tend to agree with the sentiment that automation technology is a driver of economic growth. This is the reason why the califoria wine makers should not be allowed to hire migrant workers and should be pushed into doing the same automation that the Australians have done. I will also tell you that one of my technical specialties is industrial automation and have much experience designing and implementing PLC and DCS based automation and control systems. So, you could say that I am not completely free of an ulterior motive in this.
In the 'you learn something new every day' category...
If I were to ask you what was probably the most important factor that has helped make high quality Australian wine so competitively priced in the world market. What would you say? Winery technology perhaps? Highly trained and skilled winemakers, maybe? The answer in part, and it is probably a major part at that, is…. machine harvesting. That's it. It is not widely known that well over 90% of Australia's grape crop is harvested by a machine, and that for most wineries, having teams of pickers slaving in the mid-day sun is a distant memory.
Machine harvesting fruit substantially brings down the cost of getting the grapes from the vineyard to the winery. The exact saving depends on a number of factors, but 60-70% savings are a pretty average result. However, does this practice lower the quality of the grapes and the finished wine? The ill-informed purist would say yes (as most of the great French vineyards are harvested by hand), but the evidence suggests otherwise....continued...
PS: Pity about the lizards...
That article is a great find.
Yes, this is not the first report I've come across that claims the Australian wine industry is more automated than the American wine industry. But the article excerpted in my post was quoting American winery operators. They admit it.
Randall, good to see that your sense of humor hasn't been obliterated by all the apocryphal stuff you have to deal with!
If Australia already gets more utility per input than California in addition to having better technology, there is no way Cali can catch up. The best argument for finding cheaper labor instead of making capital investments is greater short-term profits/efficiency. Once that is erased, there's no possible advantage left.
When you go off to college and your friend starts working straight out of high school, he enjoys that $25,000 while you're scraping by waiting tables. But eight years down the line you've got $80,000 earning power and you've caught up in assets. Your friend is done. Italy's economy is screwed on account of craftsmen that no longer can offer a qualitative advantage and who are so underdeveloped technologically that they don't have a prayer of becoming competitive again.
I guess I should just chalk this up as yet another burden being laid on Generation-Y by near-sighted America?
Impose a tax on wines so that the wine industry bears the real cost of employing illegal aliens.
Some high quality wines are more labour intensive to produce. For example, pinot noir grapes need to be hand picked, although most types of grapes don't. However, there are still lots of aspects of viticulture that can be automated. For example the most labour intensive job in grape growing is pruning, and a lot of pruning is still done by hand with manual loppers, when this job can be done with electric pruners and automated stripping machines which would reduce the need for labour by about 70 percent.
However, since electric pruners cost about 2300 dollars per worker, growers aren't going to invest in them if they can get illegal workers who will work for 8-10 dollars an hour using much manual gear.
Overall, I'd say the argument that US viticulture is harder to automate is about 20 percent truth, 80 percent BS.