Who will pay for workplace reforms in U.S. meat‐processing plants? Simulation results from the USAGE model

It is possible that COVID will trigger permanent changes in work practices that increase costs in U.S. meat‐processing plants. These changes will be beneficial for the safety and economic welfare of meat‐processing workers. However, they will have economic costs. In assessing reform options, policym...

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Bibliographic Details
Published inThe Australian journal of agricultural and resource economics Vol. 66; no. 2; pp. 400 - 423
Main Authors Dixon, Peter B., Rimmer, Maureen T.
Format Journal Article
LanguageEnglish
Published Oxford Blackwell Publishing Ltd 01.04.2022
Subjects
Agricultural economics
back‐of‐the‐envelope explanations
Change agents
computable general equilibrium simulations
Consumers
Cost analysis
Cost assessments
Costs
Data points
diagrammatic analysis
Diagrams
Economic analysis
Economic impact
Economic welfare
Farmers
Meat
Modelling
Policy making
Sensitivity analysis
Simulation
split of meat‐processing costs between farmers and consumers
workplace reform in U.S. meat processing
Workplaces
United States > US
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Summary:It is possible that COVID will trigger permanent changes in work practices that increase costs in U.S. meat‐processing plants. These changes will be beneficial for the safety and economic welfare of meat‐processing workers. However, they will have economic costs. In assessing reform options, policymakers seek guidance from analyses based on models embracing micro detail and an economy‐wide perspective. In this paper, we use USAGE‐Food, a highly disaggregated computable general equilibrium (CGE) model of the United States, to work out how additional processing costs would be distributed between consumers of meat products and farmers. We also calculate industry and macroeconomic effects. Despite modelling farmers as owning fixed factors, principally their own labour, we find that the farmer share in extra processing costs is likely to be quite moderate. Throughout the paper, we support simulation results with back‐of‐the‐envelope calculations, diagrams and sensitivity analyses. These devices identify the mechanisms in the model and key data points that are responsible for the main results. In this way, we avoid the black‐box criticism that is sometimes levelled at CGE modelling.
Bibliography:†
Peter B. Dixon (email: peter.dixon@vu.edu.au) and Maureen T. Rimmer are Professors at Centre of Policy Studies, Victoria University, 300 Flinders Street, Melbourne 8001, Victoria, Australia.
In preparing the paper, we benefitted from helpful comments by Greg Pompelli, Glynn Tonsor, David Anderson and Katelyn McCullock.
ISSN:1364-985X
1467-8489
DOI:10.1111/1467-8489.12470