Tiana is a body on the staffing circuit I run through the Delta. She is 34, and she breads chicken tenders on a line that calls itself a family operation. You buy the tenders she breads this week. I keep $9.75 of every $24.50 the plant pays for her hands, and I have never once touched a tender. God made the seasons. I keep the spread.
James Freeman wrote in the Wall Street Journal this week that small-business owners are ready and willing to “pay up” for workers if Washington will send more of them. The NFIB’s July hiring number fell a point anyway, and the owners tell him they can’t find the people. He’s right about the willingness. He’s wrong about where the money goes. The owner proposed $15.00 an hour to employ Tiana directly. He pays me $24.50 to employ her at all. Paying up is real. It just isn’t paid to her.
Tomás is another body in a landscaping crew I run through the Charlotte suburbs. His H-2A visa ties him to me for the season, which means he can’t walk off the lawn because walking off the lawn sends him home. The green you look at from your window is cheap because his hands are on it and his exit belongs to my signature. You’re already in the arrangement, of course. The tenders are in your freezer. The lawn is outside your window. I keep the margin in both places.
Let me put the numbers where you can see them. The plant owner signs this page every week without reading it. I read only my column.
| per hour | per week | per year | |
|---|---|---|---|
| what Tiana sees | $14.75 | $590.00 | $28,320 |
| what I keep | $9.75 | $390.00 | $18,720 |
| what the owner pays | $24.50 | $980.00 | $47,040 |
I count 48 weeks in the year, not 52. The other 4 are the part of Tiana’s year I don’t pay for, and the rent doesn’t offer her the same discount. Nine hundred placements like hers in the corridor between Memphis and the Gulf make my column $16,848,000 a year. I didn’t bread a tender. I didn’t wash a pan. I own the paperwork between the plant and the hands, and I keep it in an office that smells of nothing.
In my books, a shortage means the supply won’t meet the bid. It’s also what you call it when the bid won’t meet a human being’s week. There are plenty of people in the Delta. There isn’t a person willing to bread tenders for $14.75 an hour who can also survive the quiet weeks. Tiana is willing. Tiana is the supply that can’t say no, and that’s the only supply I need.
Read the next sentence twice: she can’t take a direct job because she can’t survive the gap. The owner’s $15.00 was a straight offer with a straight schedule, but it was made to me, and it never reached her. I offer $14.75 and a roster that goes quiet without notice. The $0.25 between his offer and her wage I don’t book as revenue at all. It’s the rounding, the change that falls out of an offer that never arrived.
Between placements I pay nothing. The rent doesn’t pause.
To leave the roster, Tiana would have to survive the unpaid weeks between one employer and the next, and she can’t bank 2 lost weeks. So she stays. The owner tells Freeman he can’t find workers, and Freeman tells Washington to send more. More is what I need. Every vetted newcomer is a placement with nowhere else to go in the first season, and the first season is where the margin is widest.
Tomás gives me the same arithmetic in a warmer climate. He trims, edges, and mows 14 properties a day for homeowners’ associations that contract with a third-party maintenance company I own. The heat index in Mecklenburg County runs past 100°F through July and August. The rules require paid rest and shaded, cool drinking water. I don’t provide them. Not because I don’t know. Because the rest I don’t pay for and the shade I don’t buy come to $0.48 an hour per body.
Fourteen bodies. 34 weeks. 40 hours a week.
$9,139.20.
That’s what I kept. His kidneys are what it cost.
By the third week Tomás’s palms were split through the gloves I don’t supply. He bought athletic tape at the Walgreens on Tryon Street. $3.29. I didn’t reimburse it. He drinks from the hose at the fourth house because the cooler is in the truck and the truck is a mile away. The water is warm. It’s also free.
You’re perhaps calculating already: the ambulance, the emergency room, the bill his status might not cover. Let me save you the arithmetic. If Tomás collapses on the lawn and someone calls 911, the cost lands on the county hospital. I don’t pay county hospital bills. I pay an HOA contract. That distinction is where the margin lives.
Freeman frames the problem correctly and stops at the useful place. He says small businesses need workers. They do. He says wages should rise to attract them. They should. He says the country needs more legal migration to fill the gap. Fine. But he treats the visa as a door.
I have found that it’s also a wall.
When I recruit Tomás through the H-2A process, his legal status is sponsored by my firm. He’s authorized to work for me and for no one else. If he quits—if he walks off the lawn at 2 in the afternoon because his vision is blurring and the asphalt is radiating heat through his boots—his employment authorization terminates. He goes home. Honduras, or wherever the flight lands.
I don’t need to threaten him. The status does that for me.
It’s the most efficient instrument of labor control I’ve ever encountered, and it arrived at my desk in a folder stamped with the Department of Homeland Security seal. Tomás doesn’t negotiate breaks because he doesn’t negotiate. He doesn’t call the Department of Labor because a call to the Department of Labor ends with him on a plane. He doesn’t mention the heat because mentioning the heat is the first step toward leaving, and leaving is the one thing the visa makes more expensive than staying.
Watch what that buys me.
The H-2A program processed about 380,000 workers in the last fiscal year. More than a third came for landscaping, agriculture, and meatpacking. The sun determines how fast the body degrades. I don’t need a metaphor. The rate is documented and I bill by the hour.
Tomás has one season remaining. After that, I file for the next batch. 28 men are already at the gate. Tomás is 31. The next one is 26. The one after that is 23. I’ve never seen their faces because I’ve never needed to. I need the bed count, the work order, and a sponsorship signature. The county supplies the first. The HOA supplies the second. USCIS supplies the third.
I’m told the program has an attrition problem. I haven’t looked at the numbers. The numbers aren’t my department. My department bills the HOA.
Come up off the line with me. The floor is where the lesson starts; the building is where it lives.
The owner who signs my invoice took my night section in manufacturing economics in 2019 and finished with an A. He told me he wanted to offer Tiana $15.00 an hour and a permanent schedule, and I told him the price of a body with no personnel file is $24.50. He never asked what she would see of it. That’s what the A was for.
I’ve taught this arithmetic for 30 years. I’m not unusual. I’m a curriculum.
The graduates sit in the firms that set your wage. One of them priced your job. The owner tells his association he can’t find workers, and he means it the way I mean it: the way a man reads a number he has been trained to read. I trained him. He reads the shortage as a supply problem because I taught him not to look at the offer on the other side of the document.
The published markup for an unskilled placement runs 30% to 75%. Mine runs at 66%, which is within the range and above the average. The average is computed over placements with options. I specialize in the ones without.
James Henry Hammond told the United States Senate on March 4, 1858:
“In all social systems there must be a class to do the menial duties, to perform the drudgery of life. That is, a class requiring but a low order of intellect and but little skill. Its requisites are vigor, docility, fidelity.”
He was pricing a different kind of body in a different century. The requisites he named are the ones I list in the job order. Vigor: Tiana stands the line. Docility: she doesn’t ask about the $15.00. Fidelity: she comes back on Monday.
Tomás is vigorous. Tomás is docile, not by nature but by architecture. Tomás is faithful to the contract because the alternative to the contract is a departure he can’t afford. That’s what I mean by fidelity. That’s what Freeman means by opportunity.
Hammond thought the taxonomy was racial. I think it’s economic. 168 years, and the only advance is that I don’t own the woman. I own her weeks. I don’t own the landscaper. I own the road home.
Revenue per head is up 6.5% this year, the same rebound the analysts print for the industry, though I read it as mine. Accounting left the file on between-assignment gap weeks on my desk Tuesday. It’s still there. I haven’t opened it, and I don’t require the intervening detail. The numbers I require are all where I can see them.
That’s the system. Not a shortage of people. A shortage of offers that reach the people.
The labor market is a lock when the person selling labor can’t leave, and a staffing market is a lock when the person who receives the offer can’t see it. The visa, the roster, the third-party contract, the silent weeks, the county hospital, the HOA invoice: these aren’t accidents around the market. They’re the market’s architecture when exit is treated as a cost to be removed.
Tiana doesn’t ask about the file. She won’t ask about the $15.00 because she’s never heard its number. The plant will call me for the next one before the notice period on this one runs. There is always another county.
Tomás will finish the season with his kidneys still useful enough for the return flight. Then I’ll file for the next batch. The program renews. The shortage renews. The body renews.
He offered $15.00 an hour to employ her directly. The offer came to me, as the offers do, and I declined it on her behalf, and she sees $14.75. The difference is a quarter, and I’ve arranged the paperwork so the 2 figures never share a desk.
The quarter is the whole lesson in miniature: the money exists, the hands exist, and between them sits a document with my name on it. The shortage is not a lack of people. It is a lack of offers that reach the people. I sit between the offer and the hands.
That is the position I sell.
It renews at $9.75.
Sterling A. Varice holds the Hayek-Friedman Chair and serves as Dean of Instruction at Warden University’s College of Business and Economics in Richmond, Virginia. He is the author of three textbooks: Divine Mandates for Labor Utilization, Social Obligations for Profit Maximization, and Calibrated Deprivation: A Manager’s Guide to Employee Motivation.