Posts Tagged: Economy

Solve economy, wildfires woes at same time

Forest restoration would be one way to improve our economy, writes researcher Tong Wu of the Center for Forestry and UC Berkeley on CNN's Global Public Square news website. He states that human interference has "made many ecosystems unnaturally susceptible to catastrophic wildfires" and that global warming will exacerbate the problem.

"In economic analyses of environmental management projects across the western United States, ecological restoration produced multiplier effects (the economic 'bang for the buck' of every dollar spent) that were higher than the estimated impacts of the 2009 government stimulus," he wrote.

E-Verify is 'divisive,' says Monterey Herald columnist

Pending federal legislation that would require employers to check worker eligibility using an system called E-Verify is divisive and unrealistic, writes attorney Dirk Stemermen in his Monterey Herald column "On the Job."

"Nothing turns conservative 'growers' into immigrant-rights advocates quicker than obligatory E-Verify use," Stemermen said.

E-Verify, which checks information from an employee's I-9 Employment Eligibility Verification Form against government records to determine U.S. employment eligibility, is already in use in Arizona, Mississippi, Georgia and Alabama.

Stemermen said that economists at UC Davis and the USDA released a study last month concluding that such crackdowns on undocumented farmworkers raise labor costs as documented workers demand better wages and working conditions.

The columnist seems to be referring to research covered in a recent UC Davis news story that said immigration reform and stricter enforcement of current immigration laws could significantly boost labor costs for California’s $20 billion fresh fruit, nut and vegetable crops.

“California’s produce industry depends on a constant influx of new, foreign-born laborers, and more than half of those are unauthorized laborers, primarily from Mexico,” the news release quoted Phillip Martin, a professor of agricultural and resource economics and one of the nation’s leading authorities on agricultural labor.

“The cost of hiring these laborers will likely rise as the U.S. government ramps up enforcement of immigration laws by installing more physical barriers along the U.S.-Mexico border and requiring more audits of workers’ I-9 employment verification forms,” Martin says.

Stemermen also raised the issue of farmworker overtime pay in his column. California farmworkers don't receive overtime pay unless they work more than 10 hours in a day or 60 hours in a week.

"Verifying employment eligibility through E-Verify or paying California farmworkers more overtime would lead to higher farmworker wages and create jobs for documented workers. But because farmworkers are so poorly paid for the unwanted, arduous work they perform, perhaps a bit of realism needs to be injected into the immigration debate," Stemermen wrote.

Farmworkers harvest vegetables in the Salinas Valley.

Trade conflict with Mexico impending

California farmers will have to pay millions of dollars to Mexican authorities to export their products to the neighboring country if a trucking dispute is not resolved before summer, according to an article in La Opinión. Mexico plans to impose the new tariff in retaliation for the cancellation of a U.S. pilot program that permitted Mexican trucks to transport goods on U.S. highways.

The Border Trade Alliance reported this week that California agriculture will be the second most impacted economic sector if the two countries do not reach an agreement in relation to the free passage of Mexican trucks in U.S. territory, the article said.

"The retaliatory tariffs that Mexico has imposed on U.S. goods in response to the trucking impasse are hurting the U.S. economy and are a drag on President Obama's goal to double exports," BTA president Nelson Balido said in a statement released by the organization. "As Texas A&M University's Center for North American Studies recently reported, the U.S. agriculture sector alone has been negatively affected by the tariffs to the tune of $153 billion."

La Opinión reporter Claudia Nuñez spoke to the director of the UC Agricultural Issues Center, Dan Sumner, about the potential economic impact of the trade dispute.

"California exports about 20 percent if its agricultural production, principally to Mexico," he was quoted in the article.

U.S. and Mexican governments are involved in a a cross-border trucking dispute that could hurt both countries.

It's boon time for beef producers

Cattle ranchers are enjoying an economic boon, reported Reed Fujii of the Stockton Record. In March, beef cattle were being sold at an all-time high of $1.16 a pound, a jump of more than 40 percent in less than two years.

"Prices are good. They've never been this good before," the story quoted Galt rancher Duane Martin Jr.

Dan Sumner, director of the UC Agricultural Issues Center, told Fujii the primary driver of the price hike is short beef supply.

"One of the things that happened a few years ago: We had these incredibly high grain prices, and beef prices didn't go up, so that meant guys were selling," Sumner was quoted.

In addition, it takes time to beef up production.

"Cattle make cattle; the only way you make marketable animals is to have breeding stock," Sumner said.

To do so, however, will further reduce beef supplies in the short run.

A steak house owner told Fujii that so far he has not increased the prices of beef on the menu.

"I've absorbed everything for the last year or so on beef," he said.

High beef prices make for happy cowboys.

A Chinese slowdown is 'imminent'

UC Berkeley economics professor Barry Eichengren supplied three reasons in a Business Insider blog why he believes a slowdown in the growth of the Chinese economy is on the horizon.

For one, slowdowns are more likely in countries where the manufacturing sector’s share of employment exceeds 20 percent, since it then becomes necessary to shift workers into services, where productivity growth is slower, Eichengren said.

Further, slowdowns come earlier in economies with undervalued currencies. Currency undervaluation, he said, may boost economic growth in the early stages of development, when a country relies on shifting its labor force from agriculture to assembly-based manufacturing. However, it may work less well when growth becomes more innovation-intensive.

“Finally, maintenance of an undervalued currency may cause imbalances and excesses in export-oriented manufacturing to build up, as happened in Korea in the 1990s, and through that channel make a growth deceleration more likely," Eichengren was quoted.

Author of the Pragmatic Capitalism blog, Cullen Roche, concurred with Eichengren's assessment. The Chinese slowdown is not a matter of if, but when, the post concluded.

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