There are certainly plenty of hard-working people in the Land of Enchantment, but this story from Milan Simonich at the Las Cruces Sun-News should give both our policymakers and the rest of us pause. The story is of a cookie plant in Deming, NM, a rural area with relatively high unemployment. Despite high unemployment, the factory has been unable to find people who are willing to work.
This, despite eliminating a costly and probably unnecessary drug test; also, despite offering pay incentives and rapid pay increases;
So, the owner has automated, thus taking his plant from 48 people down to 41. But he still has problems finding workers who will show up.
What is going on? While RGF cites the problems associated with government-imposed minimum wages, that really isn’t the problem here as the worker is willing to pay the minimum wage, but still can’t find reliable workers.
As with all major problems, the issue is one of incentives:
The federal government and New Mexico have increasingly offered generous welfare benefits. According to a new Cato Institute report, the various welfare programs given by the federal and state governments to residents of New Mexico pay the equivalent of $13.41 an hour (see Table 3). Why would you go to work for $7.50 an hour when sitting on your butt pays almost double?