2013 August 25 Sunday
Obamacare To Speed Robotic Farming

One big upside of Obamacare: taxpayer subsidies to farmers (in the form of state-provided medical care for poor people) will go down. The farmers are not happy about it

The effects of the law could be profound. Insurance brokers and health providers familiar with California’s $43.5 billion agricultural industry estimate that meeting the law’s minimum health plan requirement will cost about $1 per hour per employee worked in the field.

Note that this does not fix the medical care subsidies for their kids or of (much larger) medical care subsidies in their old age.

Growers claim that paying the full cost of farm labor is unacceptable. I claim subsidizing wealthy growers thru taxes in unacceptable.

The minimum compliant health plan for employee coverage under the new law will cost about $250 a month in California’s growing regions, according to insurance brokers, and includes a $5,000 deductible for medical care, although insurers cannot charge co-payments for preventive visits. “It’s unacceptable,” Mr. Herrin said of the cost.

What Obamacare will do: speed up the development and deployment of robots on farms. Robots will replace the poor unskilled masses. Plan your life accordingly.

Share |      By Randall Parker at 2013 August 25 12:53 PM 


Comments
Ace said at August 25, 2013 5:38 PM:

Who's going to buy all the food?

If domestic income doesn't keep up (as it hasn't for decades), then domestic demand won't be able to purchase all the food.

So they'll export.

But other countries are increasingly dependent on exporting by keeping domestic income hence domestic demand low.

The long-term trend of everyone trying to suppress incomes and maximize profits is demand falling and supply falling.

The supply of goods falls, and with low demand and low projected demand, investment to expand supply falls, despite high profits hence high cash reserves. This is currently empirically demonstrated by the fact that despite some of the highest corporate profits in history, investment is very low. Corporations are just sitting on cash. They just sit on it or buy back their own stock at the urging of financiers to boost the stock price and increase the financiers' returns as well as the value of stock options held by executives:

http://money.cnn.com/2013/08/22/technology/icahn-apple-buyback/

There is an increase in the relative wealth of shareholders and stock option holders, but no increase in real world productive capacity, which contracts due to depreciation, no investment, etc.

BlackBerry had a massive stock buyback in 2008/2009, which benefited shareholders and stock option holders at the time, and now the company is going out of business:

http://bgr.com/2013/08/23/blackberry-share-buyback-criticism/

Randall Parker said at August 25, 2013 8:41 PM:

Ace,

We live in the most or second most obese nation in the world. People will give up a lot of stuff before they give up food. We have a long way to fall before food demand will go down much. Granted, among the poorest food is a big percentage of personal expenditures. I think these are 1996 numbers which, given the reversal of household incomes, are pretty close to is the case today (US household income have fallen back to mid 1990s levels)

The proportion of income spent for food varies widely by household income. For example, households with incomes of $5,000-$9,999, before taxes, spent about 34 percent of their after-tax income for food. Households with before-tax income of $15,000-$19,999 spent 21 percent of their after-tax income for food. Households with incomes of 30,000-$39,999 spent 15 percent of after-tax income for food. The average for all households was 14.1 percent.

Here is a 2012 estimate for how much US household income goes to food and it is lower.

The percentage of food spending at restaurants has risen for the last century:

Away-from-home meals and snacks captured 45 percent of the U.S. food dollar in 1997, up from 39 percent in 1980 and 34 percent in 1970

People can shift back to eating at home and buy cheaper food in order to save money. So I do not expect reductions in income to have much impact on food buying in the United States for some years to come. Even with a continued decline in incomes I expect government will tax the middle and upper classes to feed the poor.

Ace said at August 25, 2013 11:04 PM:

Randall,

That was a rhetorical question to get into a discussion about the long term effects of a political economy that minimizes income. Not a literal one about selling food.

Do you disagree with the long-term trend I outline above?

You seem to think that technology will save the day.

Where do you think technology comes from? Why do you expect technology to save us if the companies and people that increasingly sit on most of the cash don't invest it (stock buy backs, consumer loans, etc. aren't investments in technology) and if the people that might develop technology increasingly have too little income to sustain themselves, let alone the time for tinkering?

Sam said at August 26, 2013 12:43 AM:

Oh my God,"...$1 per hour per employee worked in the field...", terrible, end of the world. I'm not unaware that increasing cost can lower demand but how many bushels of tomatoes, heads of lettuce, etc. can be picked in an hour? The increasing demand that workers become "breatharians" instead of eating is going to far.

Black Death said at August 26, 2013 7:41 AM:

This is all very nice, but if the workers are illegal immigrants, or even if they're legal but paid off the books, the farmers don't have to worry about niceties such as health insurance, minimum wage, OSHA, etc. It's harvest season here in the Upper Midwest, and I see the beat-up buses and vans full of "migrant workers" out in the fields all the time. There is zero enforcement of immigration and labor laws around here, so why should mandatory health insurance be any different? The (mostly Republican) farmers like it that way, and I doubt it's going to change any time soon.

Harvest Time said at August 27, 2013 12:16 PM:

A rolling amnesty will make everyone "legal." That's the beauty of Obama's long term plan. Just a few rich and powerful people at the top, preferably from Chicago. Total control of all media including phones and internet. Use community activists (flash mobs) to control independents who resist the new order. A sweet scam if you can turn enough people into pet chumps.

Jared said at August 29, 2013 11:05 AM:

I've been working the odd fast food job ever since earning my business degree three years ago. If my parents didn't allow me to live with them, I'd probably be dead.

Oh well, at least my employer gives me discounts on fried chicken.

Randall Parker said at August 31, 2013 10:17 AM:

Ace,

I see no signs that the people who develop technology have too little money to develop it. Go work in Silicon Valley and find out how much money flows thru it. The amounts are staggering. The numbers of engineers getting pulled in are staggering as well.

I expect the ruling classes that concentrate so much wealth will provide bread and circuses for the masses.

Technology to save the day: No, I expect technology will accelerate bad trends. For example, I expect parents will genetically engineer their offspring to more strongly want to have children. A return to the Malthusian Trap seems inevitable.

I do not see the growing lower classes as mainly the result of scheming upper classes. I see the growing lower classes as mainly due to:

- technological automation cutting the demand for less capable minds.

- dummies making more babies than smarties.

- innovations that benefit everyone have become harder to find.

I've greatly altered my career path as a result of my views btw.

Randall Parker said at August 31, 2013 9:07 PM:

Ace,

A clear statement of what you think are the biggest problems and trends would help.


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