So let\’s do some maths shall we?

We\’ve got a shock horror story from Felicity Lawrence over at The Guardian. The terribly low rates of pay for pineapple workers.

Even made it to a Guardian editorial. And here\’s the takeaway line:

workers get just 4p of each pound spent on a supermarket pineapple, the plantation owners (who are often the traders) 55p, and the retailer 41p.

Expect to see that number bandied about.

So, let us do some basic maths.

How many hours does it take to build a car? This is roughly comparable: we\’re not using the hours required to build the car plant but nor are we using the hours required to clear the land. We\’re not using the hours required to make the steel but nor are we using the labour hours required to make the fertilisers.

Hmm, looks like it\’s about 30 hours of labour to make a car. US numbers BTW.

And what do car workers get? Around $40 an hour isn\’t it? Got to include their benefits as well as their wages.

So that\’s $1,200 in labour costs to build a car.

What does such a car cost? Pieces of string and all but $30,000 say?

Umm, labour costs are some 4% of the cost of a car.

It isn\’t immediately apparent, despite this being very much a back of the envelope calculation, that the labour costs of the pineapples are out of line really. After all, those car manufacturing jobs are regarded as the very epitome of well paid blue collar labour, aren\’t they?

And I\’m absolutely certain that if we took a few more examples we could find that 4% is actually quite a high labour portion of the final retail price.

13 thoughts on “So let\’s do some maths shall we?”

  1. IIRC, those 30 hours are assembly hours at the plant: they don’t include the labour hours at the suppliers manufacturing (say) the doors.

    Your analogy holds perfectly for the pineapple picker, though, since the picker is only one person in a long chain, including the guy who drives the truck to the market, the guy who loads the ship, the people who sail the ship, the stevedore who supervises the unloading of the ship, the guy who drives the train with the container, the trucker who takes the pineapples to the warehouse, the truckers to drive it to the stores, the staff who unload it and put it on the shelves, and the people who operate the cash tills who actually sell it.

  2. The easiest argument against the point of the argument is that the plantation owner’s take also has to pay for the continued running of the plantation.

    If the price of the pineapple was broken down into workers’ wage, running costs, owners takings and retailer’s takings then it may be harder to argue against.

    Having worked in a supermarket I know that the profit margin on the food is low (I was told 1% but that may have been an exaggeration by a manager).

  3. “Having worked in a supermarket I know that the profit margin on the food is low ”

    It certainly is low. The margins are also razor-thin for pubs selling beer and petrol stations selling fuel. But do you expect Guardianistas to look into the actual figures? If they could do that then they would be Guardianistas, would they?

  4. hmm… car manufacturing use tons of inputs (steel, electricity), massive capital input, huge overheads, R&D, advertising etc. etc.

    I’m struggling to see what pineapple production involves apart from land, fertilizer and labour.

  5. Why do you instinctively want to argue against the idea that landowners in poor countries are extracting large rents and paying workers a small share of the surplus?

    I’d have thought that the countries in which pineapples are produced are not exactly paragons of competition, and are characterized by a small number of large protected landowners and and a large number of poor people … exactly there sort of situation where you would not expect competition to erase landowner rents.

    I know you are motivated by the interests of poor people in poor countries – why do you find yourself so instinctively resistant to the idea that they might be getting fucked over by big fail oily plutocrats?

    it’s pretty standard in economics to suppose people are self-interested and fill fuck over their workers if conditions allow them to do so, and it’s pretty standard to think conditions in poor countries deviate sharply from the competitive ideal hence persistence of poverty.

    I think you have allowed your inclination to disagree with whining lefties who don’t understand economics to run away with you here.

    Tim adds: OK, do some sums of your own. How much of the retail price of x, y, or z, goes to the labourers producing that product?

    My point is simple: 4% doesn’t seem out of line.

    So, is it or not?

  6. Fine. I have just this instant obtained the full distribution of “percentage of retail price paid to laborers” for all products, and can tell you that 4% is the 37th percentile.

    Presumably Felicity was trying to suggest that Pineapple workers are being fucked over, and I read you to be disagreeing by saying “actually, there’s nothing unusual happening here” i.e. they are not being fucked over.

    I now understand you to be saying “actually, there’s nothing unusual happening here strictly in terms of labor compensation as % of retail price, but I agree with Felicity that pineapple workers are probably being grossly exploited by greedy fat oily plantation owners, because labor compensation as % of retail price contains no information about degree of exploitation. I was just making a small pedantic point unrelated to Felicity’s point”

    Tim adds: Myself, I’d suggest trying decaf for that third and fourth cup of the morning.

    We are given a statistics at which we should all be horrified: 4%. We now find out that this is 37 th percentile. Nothing extraordinary or odd about it at all.

  7. I used to pick spuds for anywhere between 25p-50p per 25kg sack depending on the market price. The farmer would sell the spuds for about £200-250 per ton, i.e. £6.25 per sack at the top of the market. So I was getting 8% of what the grower was (not sure what the retail price was). The pineapple pickers are getting 7.2% of what the grower is getting, so in the same ball park.

  8. decaf? DECAF!!?? but then how would I get SO ENRAGED?!

    everything is copacetic and my pulse rate sluggish.

    I agree that merely being presented with a statistic and being expected to be outraged by it whereas in fact said statistic is nothing unusual, is something worth pulling the writer up on.

    I award myself the prize for arguing with something that wasn’t there.

    now I think of it, how many pineapples can one person pick in a day? if they can pick 1 a minute in an 8 hour day, that’s a good wage that’s getting on for £20 a day, not bad in most poor countries. As you were.

  9. In Mexico, landowners/growers are ripped off as there are cartels in trucking to the regional and national wholesale markets. Timely transport is key.

    Try and go around the cartels and on those roads many accidents happen…

    I have indirect but still close experience of this and not just Mexico.

  10. I’ve got the remains of a pineapple in the fridge (a Costa Rican one, this being Costa Rica and all.) It cost me 50p. So actually about 8% went to the workers. It was a very nice pineapple, by the way. Wages for agricultural workers here are low (of the order of $400-500 a month.) It’s what they’re worth (as is the case in any nominally capitalistic economy. ) If they don’t like it, they can always piss off back to Nicaragua where people really are poor.

  11. I think both Tim & Luis Enrique have ‘added value here’. And not a bad outcome for the Guardian either, being right for the wrong reasons at least makes a pleasant change. /T

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