Agri-food is big business in Ontario, accounting for $34 billion of the province’s GDP. In terms of employment, core food industry occupations account for over eight percent of all jobs in the province. While there has been a policy push to support a good food/local food agenda as a way to invest and strengthen local economies, missing from the discussion has been concern for the quality of work in the food sector — where a high proportion of jobs are of low quality.
This inquiry looks at what can be done to make food jobs good jobs, recognizing the inherent challenges presented by the industrialization of food. Metcalf Innovation Fellow Tom Zizys provides context and sets up the inquiry in his post below.
Five leaders and activists who focus on the food movement, issues of social justice, and workforce development have responded to Tom’s post. Their responses provide a wide range of perspectives on strategies for improving the quality of both food and food jobs, while also answering the need for food to be accessible and affordable.
We invite you to read through Tom’s blog and the five responses. On June 6, Community Food Centres Canada will be hosting a webinar to further explore ideas and strategies for good food jobs. The webinar will be moderated by Kathryn Scharf. Tom Zizys, and Sonia Singh, Leadership Development Coordinator at the Food Chain Workers Alliance will be the guest panelists.
Following the webinar, Tom has provided some concluding thoughts, published as a response essay on this page.
When it comes to issues that are essential to our personal well-being, few topics matter more than the food we eat and the jobs we work in. Yet each of these two realms — food and work — has witnessed a profound degradation over the last forty years. How food is produced and its impact on our health has provoked a worldwide epidemic of obesity, diabetes, and cardiovascular diseases resulting in a multitude of counter-movements promoting organic food, local food, supplements and nutrients and other alternatives to the monolithic, industrial food system.
Similarly, changes in our labour market have led to growing income inequality, an increase in precarious work, and worsening employment outcomes for youth and newcomers. Here, too, we are witnessing consequent reactions, from the calls for a living wage and for decent work, to rising xenophobia and anger directed at corporate globalization, trade agreements, the 1%/elites and other factors.
It is striking how little these two concerns overlap. Yet the case of good food and good jobs came together for me a while ago, when I found myself in conversation with a chef who was adapting a hospital’s food menu to include more locally grown produce. One notable challenge she was facing was Ontario’s changing seasons. Various vegetables were either in or out of season, and locally grown food was limited during the winter months. Many staff were dusting off their dormant cooking skills in order to create soups from root vegetables, or assemble fresh salads using hand-made vinaigrettes flavoured with local herbs. The result — a fresh, more appetizing meal — was the direct consequence of their work and instilled a sense of accomplishment and improved workplace morale.
As a labour market analyst, these changes caught my eye. Better jobs typically require higher skill levels. Here was an instance where kitchen workers were not simply re-heating pre-prepared foods but were required to apply essential cooking skills: peeling and slicing, measuring and mixing, frying and broiling. All of which raises the hypothesis: If cooking requires more skill, does that not also necessitate a higher grade of worker to carry out these tasks? Would a drive to promote good food bring the added benefit of better jobs?
In this light, the Ontario government’s Local Food Act, passed in 2013, presents a tantalizing possibility. By encouraging increased reliance on local food by public sector organizations, might there be the potential for a virtuous win-win, with good jobs joining good food on the menu?
The institutional food service environment of hospitals would appear to offer a fortuitous convergence of interests. What better place to promote the notion of healthy food than in a setting devoted to repairing people’s health? Might not healthier food result in quicker recovery times and shorter bed stays, and improve the bottom-line of hospitals? Would not the cost and effort to improve the food, including possibly higher labour costs, find its benefit and justification from the enhanced health outcomes of hospital patients?
As I pursued this thinking, my optimistic hypotheses floundered fairly quickly. Many overnight hospital patients are there as a result of serious trauma or an acute health problem. Food plays only a small part in the array of specialized medical interventions they receive. Hospitals concern themselves with investment in the latest medical equipment and in recruiting top-level health professionals. Food, as a service, ranks very low on a hospital’s list of administrative priorities — usually found in the same division as janitorial and laundry services.
When hospitals have adopted a local food objective, usually as the result of a local food champion on staff, the impact on the “good jobs” front has been limited. The reliance on a broader set of skills has not required a reclassification of workers into a higher-skilled occupational category. And while the work involves the use of more skills it has not meant any increase in pay. This is because their occupational classification often still covers the extra functions, and because these institutions are under constant budgetary pressures.
What this inquiry suggests is that the dual goal of quality food and decent jobs is not easily achieved. On the food front, great strides have been met to improve quality. The province does have an enhanced local food strategy encouraged by the Local Food Act, and a number of public institutions are reviewing their food services to incorporate more local sourcing. Which raises the question, are there approaches advocated by the food movement that could have an impact on the quality of jobs in the food sector?
The food movement
Policies like the Ontario local food strategy do not emerge out of a vacuum. Concern about the quality of food produced by the food industry has gained considerable attention in the last decade or so. And not unlike the environmental movement, which received a galvanizing spark with the publication of Rachel Carson’s Silent Spring in 1962, the food movement found its voice greatly amplified with the advent of four books in quick succession in the early 2000s: Fast Food Nation by Eric Schlosser; Food Politics by Marion Nestle; Stuffed and Starved by Raj Patel; and The Omnivore’s Dilemma by Michael Pollan.
Pollan’s narrative about corn captures well the cumulative message of all four books: the production of our food went from small-scale to large-scale, driven by a desire to increase volumes, lower costs, improve efficiencies, and achieve economies of scale, often through the adoption of factory-like processes. And a larger portion of food industry revenues is derived from processing food.
The consequence? A worldwide weight gain and obesity epidemic. As the medical journal The Lancet has stated, “[t]he simultaneous increases in obesity in almost all countries seem to be driven mainly by changes in the global food system, which is producing more processed, affordable, and effectively marketed food than ever before,” that is resulting in the “overconsumption of energy-dense, nutrient-poor foods and beverages.” Obesity has overtaken tobacco as the largest preventable cause of disease in many places. Canada ranks only behind the United States, Mexico, New Zealand, and Australia in its prevalence of obesity (25.4% among adults).
While individuals make choices about what they eat, these choices are greatly influenced by what foods are available and at what price. Choices are also affected by how much we are seduced to make purchases based on the manipulations of tastes and marketing, without regard for the quality.
The food industry has not remained unmoved by these revelations. The most visible responses have been the effort to reduce the number of additives, and the promotion of more natural food production practices, such as organic sources, grass-fed cattle, antibiotic-free meats, free-range eggs and so on.
Many interests fall under the banner of the food movement: nutrition and calorie labeling; school lunch reform; farmland preservation; urban agriculture; farmers’ markets; taxes on soda pop; animal rights; campaigns against genetically modified crops; regulating the marketing of junk food to children; community gardens and kitchens; and, two of the biggest, organic food farming and the desire for local food.
Yet apart from concerns about migrant farm workers, minimum wage, tipping practices in restaurants, and occasionally an investigation into working conditions for precarious food workers — such as Sara Mojtehedzadeh and Brendan Kennedy’s reporting on Fiera Foods — we pay relatively little attention to the circumstances of workers responsible for food reaching our plates. How is it, as good food has emerged as a public cause, that concern about the quality of jobs associated with food has not attracted the same consideration?
Food sector jobs
The food sector is a significant employer, accounting for as much as one in every seven workers in Ontario. Close to 22% of food sector jobs are in fast-food outlets, 20% in restaurants, 20% in grocery stores, and 11% in food manufacturing. Workers on farms account for 12% of the total army of food workers.
Food sector industries comprise a larger number of lower-skilled, entry-level positions. Over 60% of these jobs require workers to have no more than a high school diploma. In fast-food outlets, 70% of the jobs are represented by low-skilled occupations such as food counter attendants, cooks, kitchen helpers or cashiers. Close to half of all workers in grocery stores, restaurants, and fast-food outlets work part-time. Because of this large volume of part-time work, almost a quarter (23%) of all workers in food industries in Ontario made less than $15,000 a year in 2010. Even when considering only full-time, full-year workers, the restaurant and fast-food sectors have among the lowest average earnings. Among these workers, only 2% belong to a union.
It is therefore not surprising that food sector workers have been at the forefront of advocacy in support of increasing the minimum wage and of improving the circumstances of low-paying jobs. These efforts to improve employment conditions led to the establishment in 2017 of the Fair Workplaces, Better Jobs Act— which has responded to some of these concerns.
Statutory minimum wages and employment standards are only part of what is required to achieve decent jobs. Mandating safe workplaces, protecting the ability of workers to organize regarding labour concerns, and encouraging personal development, through training and career advancement are all needed. The latter is very much a function of the business model an employer chooses to apply, either adopting a low-wage, low productivity approach, or seeking greater reward through a higher wage, higher productivity strategy.
A vicious or a virtuous cycle?
The benefits derived from investing in training and productivity improvements are not limited to high value-added industries. They can be found among lower-skilled service sectors, such as retail stores, as demonstrated in Zepnop Ton’s The Good Jobs Strategy, which explores the virtuous cycle of retailing. The virtuous cycle reverses the vicious cycle of continuing to cut costs to generate more profit. Rather than focusing on minimizing labour costs, retail stores rely on a common set of operational practices. These can include carrying fewer products (specialized items that meet customer preferences) while ensuring that staff are gauging customer expectations, and cross-training staff to be able to carry out different functions depending on customer traffic. This ensues a sufficient complement of staff is always present to assist clients. These operational practices require better-trained staff, which necessarily warrants higher pay. In short, better store performance depends on better operations, the foundation for which is better trained and better paid staff.
The production of food follows much the same argument: reducing the costs of various inputs (labour costs, produce costs) results in a reliance on volume, not quality. Combined with various efforts to increase the consumption of volume (sugar, fat, salt) the outcome is less healthy food. Reversing this downward spiral is possible, but there appears to be a catch: it is hard to achieve both beneficial outcomes (good food and good jobs). Better quality food may be the outcome, but then the improvement in the quality of the jobs may be constrained. Better jobs can be achieved, but then the food quality may not be much improved.
These are systemic problems arising from the constraints of cost-cutting approaches throughout the economy. The virtuous cycle of retail, applied to operational practices in the food sector, is perhaps one possible strategy in our quest for finding ways to have good food made by people with good jobs, and provides a promising segue for the two questions we have posed to our guest panel:
- How can we make food jobs good jobs?
- Can the good food movement provide insights as to how to drive a good food jobs agenda?
As a chef and activist, when I work in public institutions, I spend a lot of time thinking about how to make food jobs good jobs, and about the size of the gap that needs to close to actually do this. The food industry is one of the largest employers in the city and we all have to eat three meals a day. Yet most food jobs remain the same: low paying, insecure, and exhausting.
The solutions to these problems are not a mystery. We know that increasing salaries to a living wage, offering more secure employment contracts with benefits, and managing a team with care and thoughtful communication will all effectively contribute to improving the quality of food jobs and to reducing turnover rates in professional kitchens. To this list I would like to add the creation and enforcement of policies that address gender equality and sexual harassment in a way that makes all staff feel safe and respected.
Although we’ve known what needs to change for a while, the situation doesn’t seem to be getting any better. Why is this? What is it that’s not working? I think the answer lies squarely in public awareness and opinion. It’s no secret that profit margins in the food business are narrow, and that one ballooning cost can quickly wipe out all profits. At the same time, I fear many people quickly place the blame and responsibility directly on the shoulders of restaurant owners who get labeled as stingy penny-pinchers who don’t want to pay their staff well.
With painfully thin margins and the rising cost of food, we all have to open our eyes to the fragile reality of the food industry. The root of many of our challenges lies in our unwillingness to pay for good, sustainable food choices. I believe very strongly that food industry salaries are not going to increase without consumers agreeing to pay more for their food.
We are all — as eaters and consumers — a necessary part of the chain of hands required to move food from field to kitchen to table. Without customers the industry will fail, and without a secure, sustainable food system we will starve. As I see it, the way forward requires a shift in our thinking that identifies people, as consumers, as being integral to the system, not just customers or end users. We all need to be more invested in our food system and understand the responsibility and impact we have.
Based on my experience, I think we need investment and leadership to grow public awareness and engagement. This is where lessons from the good food movement can help to make food jobs good jobs. The way forward will require a bit of effort from everyone. As humans, and with food as our common denominator, we all have a vested interest in the strength and sustainability of our food system. Revaluing the food on our plates requires us to revalue the hands that put it there, from the farm to the kitchen. Using education and inspiration, we can dispel myths and get our facts straight. Then we can come together to find creative solutions to build a more nourishing, sustainable future in which food jobs are good jobs.
The Hospitality Workers Training Centre (HWTC) is a non-profit workforce development organization dedicated to developing collaborative training solutions that benefit both employers and workers. We work closely with Toronto’s hospitality employers to understand the skill and competency requirements for their entry-level, in-demand positions, and provide training to individuals to meet these workforce needs. We also design and deliver customized training to incumbent hospitality workers to support cross-training and career advancement within the sector.
Employment in Toronto’s institutional food service sector has risen 15 percent over the past 10 years and now employs 16,000 workers. In 2016 and 2017, we conducted research to better understand this growing industry. In our research, both employers and workers raised concerns about the skill profile of the current workforce and the skills gap resulting from evolving operational and service demands.
Consumer demand for fresh healthier food options requires workers with higher skill sets, higher levels of literacy, and more formal qualifications. Yet historically these jobs have been performed by low-skill workers. Employers and workers have identified challenges in upskilling existing staff and in attracting higher skilled workers. Compounding this are the realities of an aging food service workforce, the poor perception of careers in this industry, historically poor compensation for entry-level positions, and low unemployment rates.
As Tom Zizys mentions, Zeynep Ton, Co-founder and President of the Good Jobs Institute, has identified strategies that create value for employers, employees, and customers by combining investment in employees with operational choices. This creates a virtuous cycle that increases employee productivity, contribution, and motivation. The current pressures on the food service sector, as outlined above, have created a real and pressing opportunity to advance a good jobs movement within this industry. Employers we spoke to recognize the need to become more attractive employers by offering better wages and benefits, advancement opportunities, and career mobility in order to recruit and retain the workforce necessary to meet their business objectives.
HWTC is working with food service employers to identify the skill requirements for their current and future workforce. We work with employers to co-develop and deliver targeted training to build that workforce, focusing on the most in-demand occupations. We engage employers and workers to identify barriers and skill gaps and design customized training to increase retention and support career advancement. In addition, we actively recruit individuals interested and motivated for careers in the industry, providing them with applied training to build the specific skills employers tell us they are seeking. Finally, we stream these screened and skilled candidates directly to employers seeking to fill vacancies.
All these activities are what we refer to as sector-focused workforce development strategies. We believe they provide an effective mechanism to support the food services industry to attract, develop, and retain the workforce to fill these good jobs and meet their operational needs.
Changing consumer expectations, an existing skills gap, and an aging workforce has created an urgent need for food service employers to examine their attractiveness as an employer. A focused workforce development strategy can leverage this business imperative into an opportunity, and a virtuous cycle, to create good food jobs. This is a win for workers, a win for businesses, and a win for industry.
As we know, the industrialization of food has spurred the proliferation of low-wage and precarious work. Food workers are now among the lowest paid and, ironically, the most food insecure workers in our province.
We often hear about economic and environmental sustainability but equally important is social sustainability. Employers who don’t value health equity, labour rights, and human rights are not operating from a sustainable framework. Food jobs are good jobs when we prioritize income inequality and introduce corrective income-based interventions, such as working to close the gap between minimum wages and liveable wages.
FoodShare is a non-profit organization that works with communities and schools to deliver healthy food and food education. We believe everyone deserves access to affordable high-quality fresh food. Since 1985, FoodShare has pioneered innovative programs like the Good Food Box, impacted what kids eat in school, and improved the way people eat and grow food across Toronto.
I’m proud that I work at an organization that recently unveiled a new pay-grid rooted in poverty reduction. Effective July 1, 2018 the lowest paid workers on FoodShare’s pay grid will see a 25 percent increase to their pay range, while there will be no change to the compensation of senior managers, directors, and the executive director. FoodShare also increased the employer matching RRSP program for all employees.
Making these investments in our staff was a decision entirely based on our values. We firmly believe we cannot advance our work on the backs of folks whose incomes do not keep pace with the increasing costs associated with living in a city like Toronto. The decision wasn’t based on a grant, or a new pot of funding, but a commitment from the senior leadership team. As a non-profit organization we know that income inequality is polarizing, and we strive to actively close the gap by advocating for good jobs both inside and outside of FoodShare.
I am a firm believer in working towards what may, right now, seem inconceivable. One of the ways that FoodShare does this is in our advocacy for a public food system. Most of us recognize the value and importance of public transit, public education, public housing, and public libraries. But we have yet to prioritize access to food in this way. Instead, we have commodified food and entrenched a system of access that is driven by profit and low-wage work.
We have made food and food workers a last priority. This has to change. We need farmers, farm workers, and food service workers to be paid liveable wages. A public food system could be the answer to this. As an example, we could begin by identifying five local items (i.e. apples, carrots, soy nuts, cheese, and broccoli) that are eligible for government subsidy and sell them in stores for a set price (i.e 20 cents/kilo). Farmers, in this case, would be paid directly by the government. This is a bold idea, that requires us to rethink the current commodification of food. But the creation of good food jobs demands bold ideas that challenge the status quo.
Community Food Centres Canada is a national organization that works in partnership with diverse grassroots organizations to build community food centres and support a network of food initiatives that use healthy food, cooking, gardening, and engagement to build social change and health. The question of “good jobs” in the food sector comes up in so many ways. We and our partners employ many people; we know that community members want jobs and incomes more than they want charity; we are concerned about the politics of living wages for food workers and farmers; and since we’re always trying to find ways to fund our operations, we’re often thinking about how to find some money to do that. So one way or another, we think a lot about jobs.
One thing we’ve learned along the way is that despite the fact that our thoughts tend to gravitate to food business and training, direct job and income generation through food is very difficult. Profit margins are small, the scale required to be successful is big, and if you’re eager to train people for work with decent pay and working conditions, it’s questionable whether the food sector is where you would look. It’s telling that, compared to the private food sector — where success is predicated on low wages and people work incredibly hard to the detriment of their sanity and physical health — even our sector’s relatively modest wage scale is high. One of the few areas where we can often exceed the private sector is when we’re hiring chefs or gardeners/food growers.
As Canadians, we pay among the lowest prices for food in the world, relative to our incomes. We do not have a culture of valuing good, sustainably produced food, or the people who make it. This is true from the fields to the factories to the kitchens of homes, fast food restaurants, and even fine dining establishments. Keeping prices low places pressure on all aspects of food production, from environmental standards, to farm wages and labour costs.
To produce enough profit to pay workers fairly, consumers need to pay more for “triple-bottom-line” (socially, environmentally, and financially viable) quality food. And government and other institutions need to play a leadership role in instituting policies that promote good food jobs. For example, they can leverage their buying power to pay for good quality food produced at fair wages. Otherwise, taxpayers bear the costs downstream in healthcare costs or in social programs that compensate for the shortfall in income left by precarious employment.
As the good food movement has shown, the triple-bottom-line requires a complex shift of values. It is difficult to bring about any change without influence in the bigger policy arena. Theoretically, such an opportunity is presented by the food policy currently under development by the federal government. To get to that place, though, where environmental, income, and health impacts are considered equally, the policy must transcend its placement within Agriculture and Agri-Food Canada, where the primary focus is to promote competitiveness (read low prices), scale, growth, industrialization, and export markets at the cost of sustainability and good jobs.
If consumers and governments were to value food more highly, it would create benefits that could be redistributed to create better jobs. However, since profits are already distributed disproportionately among the corporate stakeholders and shareholders who distribute and sell food, there’s no reason to believe this wouldn’t continue. This is why the most important changes needed to create good food jobs are the obvious government-driven standards and regulations: adequate minimum wages, strong employment standards, and income security policies.
Minimum wages are key to leveling the playing field and forcing a re-distribution of profit. Fortunately, this change appears to be supported by the public. As well, adequate wages, working conditions, and workers’ rights need to be guaranteed for all in the agricultural sector—particularly migrant farmworkers, who have been among the most exploited. Bolstering legislation that enables further unionization across the food industry will also help to ensure better jobs.
If good jobs and sustainability lead to higher prices, we are often asked: “where does that leave people who are already struggling to afford basic food?” While this is true in the short term, we cannot avoid looking at the bigger systems in play. Low-income people are the same people who will benefit from better jobs, and we cannot perpetuate a socially or otherwise unsustainable food system just to keep prices low. Incomes must rise to be able to pay those prices, be it via living wages or increases to government support programs. Indeed, analyses of Walmart posit that low prices do not offset the poverty created by low wages or inadequate social assistance rates that are unable to cover basic needs.
As a society, we’ve gotten used to not valuing food or the people who produce it. To change this, we need a range of policies across policy domains, popular opinion, and consumer behaviour that promote a sustainable food system that includes all facets of the ways food affects our health, environment, economy, and culture. It’s complex, but only then will we have the good food jobs people deserve.
Tom Zizys rightly notes that Ontario has pursued a “local food policy” aimed at promoting healthy, locally sourced food. But, for over fifty years, that “local” food has been produced by racialized workers from the Global South who, by law, work under restrictions that would be impossible to impose on local workers. Rather than importing our food, we import our labour.
Moreover, Canada’s goal of becoming a world leader in agriculture by expanding our local food production is contingent on expanding the scope and scale of precarious temporary migrant agricultural labour in Canada.
This vision does not include an expansion of rights for the migrant workers doing the labour.
Roughly 48,000 migrant agricultural workers were granted work permits in Canada in 2017; about half work in Ontario. Over 22,000 of the migrant farm workers in Ontario are from Mexico, Jamaica, and the Caribbean. They arrive under the Seasonal Agricultural Worker Program (SAWP) and work for up to eight months each year. The rest are migrant farm workers from around the globe — the Philippines, Thailand, China, Guatemala, Honduras, Indonesia, and elsewhere. These workers typically pay thousands of dollars in predatory “recruitment” fees — which are unlawful in Ontario — to receive work on renewable 12-month work permits under the low-wage stream of the Temporary Foreign Worker Program.
Employers hiring migrant farm workers select which country to hire from and can specify if they want male or female workers — a process which is at odds with the Human Rights Code. The work permits restrict workers from working for anyone other than the employer named on their permit. They also typically live on the property of, or in housing provided by, their employer. They are hired on standard contracts which they do not have an opportunity to negotiate. They can be terminated and deported without a hearing. They are frequently deported if sick or injured. Their continued employment is dependent on maintaining good personal relationships with their employer.
The laws which structure the labour migration programs create an extreme power imbalance, and the exploitative working conditions which result have been thoroughly documented for decades.
Yet, the “bad job” framework persists. One story we tell ourselves — to give us comfort with the status quo — is that farm work is dirty and dangerous work that “Canadian’s don’t want to do.” So we need migrant workers.
But this story ignores that, over the past century, we have made and sustained political choices to exempt agricultural work from core labour standards. It is these choices that have depressed conditions and wages in the sector and created farm work as a low-wage, low-rights zone.
Whether local or migrant, most farm workers are excluded from basic employment standards like minimum wage, hours of work, daily or weekly rest periods, time off between shifts, eating periods, overtime pay, public holiday pay, and vacation with pay. Ontario is also the only province in Canada that wholly denies farmworkers the right to unionize under the Labour Relations Act.
In essence, we have chosen as a society to treat agriculture as a “sacrifice zone” that is purported to be unusual or “exceptional” in some way and so is excluded from the rules, rights, and protections that apply in the “normal” economy. This sacrifice zone is constructed so that it is permanently staffed by migrant workers with precarious temporary status. The differential treatment of these migrant workers then feeds a vicious circle that normalizes and entrenches a two-tier labour market.
Until we directly confront the political choices we’ve made for how to structure labour in our “local food economy,” the reality of bad jobs will continue to leave a bad taste in our mouth.
The five responses to the initial blog have highlighted an array of issues from workforce development to the exploitation of temporary migrant workers in our agricultural system. There is a broad consensus that food jobs need to improve, their wages need to increase, and that a highly competitive marketplace constrains the price of food.
In this final blog, I want to focus on the relationship between the wages of food workers and the price of food.
Let’s start with the world’s largest company by revenue and by number of employees, Walmart. Its “everyday low prices” are a consequence of efficiencies but also a result of supressing the wages of its own employees. As a dominant retail store, Walmart can pressure suppliers to reduce the prices of their products sold through Walmart. In some cases, this has meant that suppliers similarly have to rein in the wages of their own employees. The spread of this practice to other mega-retailers has had a cumulative effect.[i]
Suppliers meet this pressure to reduce prices by redesigning their products, cutting back some features and, at times, reducing product quality. In addition, many send production off-shore to countries with lower wages.[ii] Thus, lower prices may sometimes be the consequence of a very efficient supply chain or the economies created by large scale. However, sometimes it is the consequence of poorer-quality products and low wages.
These same tendencies are found in the food industry. The presence of a small number of very large food processing companies impact prices for farmers in the way that Walmart affects its suppliers. In the fast-food industry, the reliance on franchises means low-skilled, low-paid workers following highly standardized procedures set by the fast-food chains and the financial terms of the franchise agreements keep profit margins low for franchisees.
In short, whether it is in the food industry or elsewhere, the nature of buyer-supplier chains impact wages, as do the choice of business models, whether those be franchises, using contract workers or the reliance on temporary workers. Technological change has also resulted in a smaller share of our economy going to pay wages.[iii]
The other side of cost-cutting relates to the manipulation of the product. In the case of the industrial food system, this has meant increasing taste and lengthening shelf-life of food by adding more sugar, salt, and other additives. These are, however, lower in nutrients and natural ingredients, and result in higher-calorie products that emphasize convenience and lower price. Unlike other goods we buy and then soon discard (clothes that wear out more easily, flimsy furniture that ends up on the curb), this food is actually killing us, with soaring rates of diabetes, cardiovascular diseases and obesity.
So, over the course of several decades, we have seen wages stagnate, while the food system was overtaken by food that was cheaper but less healthy. Not only do low-income households suffer from food insecurity but the food they can afford is also of lower nutritional quality. As one food activist observed “the rich get organic and the poor get diabetes.”[iv]
The resulting income inequality created by stagnating wages for most workers has also slowed consumer-demand. Ironically, if income were more equally distributed either through the labour market or through income transfers, it would contribute to greater economic growth because of the greater propensity of lower-income households to spend what money they have actually buying things, as opposed to placing it in a bank account or investment fund.[v] Yet companies faced with lower demand for their goods seek corporate tax cuts to turn a profit or engage in mergers and acquisitions in order to bump up their stock values. These companies forgot the insight of Henry Ford, who paid his workers more than the going rate because otherwise there would be no purchasers of the cars they produced.
To add insult to injury, political parties who propose less government regulation of the marketplace tempt cash-strapped voters with promises of tax cuts, in this way withdrawing resources from the only institution which can introduce and enforce improved standards regarding minimum wage, working conditions, and the quality of our food.
This is the downward spiral we have been on for some time. The only solution is to start reversing the trends and start pointing the spiral in an upward direction. Here are four strategies:
- Maintain the pressure to increase the minimum wage and reduce precarious employment. Many of the jobs in the food sector are low-skilled and are unlikely to advance in quality through productivity improvements. It is necessary to raise the floor, to ensure those jobs pay an adequate wage. It also requires safeguarding the capacity of workers to unionize and to bargain collectively.
- Increase the price of less healthy foods. When markets set prices, they do not reflect the cost of externalities. For example, when companies pollute, the consequences are borne by others. We tax cigarettes in part because of health care costs incurred by smoking. We should do the same with less healthy food, starting perhaps with a sugar tax or some other measure that incorporates the true cost of unhealthy food in its price. People who believe that unhealthy food is affordable are not including in their calculation the cost on their health and the health care system.
- Enhance local food networks. Local food is more likely to be better quality food, if only because it has travelled less and because consumers can better judge where their food comes from and how it is made. Local food networks can provide a competitive alternative to the industrial food complex, but they continue to need assistance to build up their infrastructure and marketing. However, in addition to advancing such goals as nutrition and quality, we do need to ensure that employment conditions in local food economies also adhere to a higher standard.
- Subsidize a select range of healthy food for lower-income households. Raising the price of unhealthy food will not in itself make healthier food more affordable. Indeed, raising wages may also increase the price of that food. Until we reach a state when individuals and households receive adequate income, either through a living wage or sufficient income support, it will be necessary to ensure access to quality food by providing some form of subsidy, perhaps targeting, as Paul Taylor of FoodShare suggested, apples, carrots, soy nuts, cheese and broccoli.
In the broader picture, the most significant shift that has occurred in our economy over the last several decades has been a decline in the portion of our total economy going to wages, and a corresponding increase in the amount going to capital. If we are to improve the working conditions of people employed in the food industry, it will require an increase in wages. Those increased wages will have to be supported by increased prices. Over time, the increase in wages and in prices will work in tandem, but in the short-term, it will be necessary to subsidize the cost of certain food for certain populations. To pay for some of that subsidy, we should impose a tax on those foods that are resulting in a significant cost to individuals and to our health care system as a whole.
[i] It has been estimated that around 10% of the wage stagnation in the United States since the 1970s is due to the growing concentration of a small number of very large corporate buyers (like Walmart and Amazon) and the pressure they have brought to bear on the wages of their suppliers’ workers. Nathan Wilmers, “Wage Stagnation and Buyer Power: How Buyer-Supplier Relations Affect U.S. Workers’ Wages, 1978 to 2014,” American Sociological Review, Vol. 83, Issue 2, pp. 213-242 (2018).
[ii] For examples of reductions in quality of products sold through Walmart, see Charles Fishman, The Wat-Mart Effect: How the World’s Most Powerful Company Really Works – and How It’s Transforming the American Economy, 2006.
[iii] Mai Chi Dao et al., “Why is Labor Receiving a Smaller Share of Global Income? Theory and Empirical Evidence,” IMF Working Paper 17/169, International Monetary Fund (2017).
[iv] Brent Preston, The New Farm: Our Ten Years on the Front Lines of the Good Food Revolution.
[v] Jonathan Fisher et al, “Estimating the marginal propensity to consume using the distribution of income, consumption, and wealth,” Working Paper Series, April 2018, Washington Center for Equitable Growth.