A Green Minimum Wage

– July 10, 2020 Reading Time: 4 minutes

Before America launches into a New Green Deal, it ought to consider what happened to the Old Green Deal. Basically, the government killed it in favor of urbanism and the agricultural-industrial processed food complex. It’s time to rethink those policies and solve homelessness at the same time.

That’s right, we can have 100 percent employment (everyone who wants to work will be able to), zero homelessness, and an (ostensibly) improved environment in a few easy steps. I’m not kidding! The only “loser” would be the government.

The lightning bolt hit me between the eyes after watching a Hulu documentary called The Biggest Small Farm, a truly delightful 1.5 hour romp into the 7-year-long transformation of a desiccated, failed industrial farm in California into a profitable cornucopia resistant to deluges, droughts, and wildfires.

No, I am not going to try to sell you a get-rich-quick scheme. The “farmers,” a TV cameraman and his chef wife, did nothing but apply some elbow grease to the place in ways that allowed natural processes to return. They essentially recreated a 19th-century family farm with the benefit of 21st-century technology. Watch the show for the biological details, but something that it does not reveal is just as important, the political economy underbelly of this organic egg and fruit producing beast. The farm succeeded during its harrowing early years on labor so cheap that the laborers actually paid the farmers.

Such “negative wages” are even more common than negative interest rates and stem from the same black hole that emerges whenever the usual or assumed flow of funds reverses. For legal reasons, we use different names for it, like “tuition” or “resort fee.” To be fair, the documentary is not very explicit about the arrangement, so it may be that some of the young people shown helping the “farmers” were “volunteers,” which is the word we use when no payments flow in either direction.

Of course America’s homeless are not about to pay tuition or volunteer to work on an organic farm. Some would, though, willingly work for the old staple that saved many an American’s life throughout the nation’s history, from the colonial era to the Great Depression: Room and board. Three hots and a cot. Three squares and a bear (rug, to sleep on or crawl under). (See, for example, Winifred B. Rothenberg, “Structural Change in the Farm Labor Force,” in Claudia Goldin and Hugh Rockoff, eds. Strategic Factors in Nineteenth Century Economic History [Chicago: University of Chicago Press, 1992] p. 113, n.20, 122; Frank Higbie, “‘Like the Flock of Swallows that Come in Spring Time:’ The Uneasy Place of Hobo Workers in Midwestern Economy and Culture,” in Marc S. Rodriguez, ed. Repositioning North American Migration History [Rochester: University of Rochester Press, 2004], 122.)

Don’t worry, the Upper Midwest will still produce prodigious supplies of cheap corn, wheat, and soybeans using fertilizers, pesticides, GMO crops, and megamachines in fields a mile square. But many other crops are not conducive to such methods and “organic” farms entail a lot of caring for cattle, chickens, dogs, ducks, goats, hogs, honey bees, and other critters in ways that require labor; not skilled labor, just somebody with a little common sense and a lot of gumption.

So why don’t those in need of cheap labor, organic farmers, and those in need of food and shelter, solve each other’s problems? No, it is not a “market failure.” The answer is one word, and it starts with a “g” and ends in “ment.” More specifically, minimum wage laws prevent the downtrodden from helping organic farmers to restore now marginal farmland to its former glory while filling the pie holes of every snobby “environmentalist” from Sacramento to Palm Springs. Somehow, it is legal for me to pay organic farmers “tuition” to work on their land, or to volunteer to do so, but it is illegal for somebody with no money to gain the same experience in exchange for in-kind payments less than some arbitrary minimum cash wage.

The problem, of course, is that homeless and low-skilled workers more generally who toil for room and board might become independent of the government. They might gain self-worth and develop characteristics that might make them able to find other employment, rent or buy their own homes, and start paying taxes. What an unmitigated tragedy that would be for government social services workers and their budgets! But just think about how good all those organic farms would be for the environment.

States should therefore make it clear that not just white middle class twenty-somethings and globetrotting “eurotrash” but anyone, regardless of their age, gender, race, religion, etc., who wants to, can work on an organic farm for just room and board. And, of course, farmers who want to retain good, experienced farm hands should be free to pay a dollar a week, day, hour, or minute to those same people, as they mutually agree. And when the world not only does not end but improves due to the policy, let’s extend it to other types of employers as well.

Robert E. Wright is the (co)author or (co)editor of over two dozen major books, book series, and edited collections, including AIER’s The Best of Thomas Paine (2021) and Financial Exclusion (2019). He has also (co)authored numerous articles for important journals, including the American Economic Review, Business History Review, Independent Review, Journal of Private Enterprise, Review of Finance, and Southern Economic Review. Robert has taught business, economics, and policy courses at Augustana University, NYU’s Stern School of Business, Temple University, the University of Virginia, and elsewhere since taking his Ph.D. in History from SUNY Buffalo in 1997. Robert E. Wright was formerly a Senior Research Faculty at the American Institute for Economic Research.