Carleen is a body on the breading line I own outside Pascagoula, Mississippi. She is 39. She portions 1,200 tilapia fillets a shift in a cloud of cornstarch dust. The ventilation hood that would clear it at the source costs $8,900. The respirator the general duty clause requires costs $34. I’ve kept both. The fish stick your daughter had for supper came off Carleen’s line at a margin that required the dust to stay. The Lord counts the sparrow; I count the shift.
Senator Rick Scott writes in the Wall Street Journal this week that America must maintain the dollar’s reserve status — 57% of global reserves, a projected 9% currency-value collapse if we lose it. He is correct on every figure. He is writing to keep your grocery bill from rising. He has not priced the woman who stands in the dust that grocery bill is built on.
Here is what the dust is worth to me.
The tilapia block arrives at my dock from Can Tho, Vietnam, at $1.14 a pound. The dollar’s dominance is the reason it costs $1.14 and not $1.24. That $0.10 a pound — the reserve-currency premium — is mine. I collect it on every block that crosses my scale. Carleen doesn’t see it. Her wage is $11.50 an hour. It was $11.50 last year. The dollar’s strength flows to my line, not hers.
The hood: $8,900. The industrial hygienist I hired told me what it would do, in a report I read once and filed. Carleen’s reserve margin per fillet: $0.11. Per shift, the premium the dollar hands me that she never sees: $132. The hood pays for itself in 67 shifts. Carleen has stood at that station for 1,280. The bandana she wraps over her face costs $2.19 at the Walmart in Pascagoula. I don’t buy that either.
Her peak flow when she started was 420. It is 310 now.
Tolbert is Carleen with a thermometer and a colder station. He runs QC at the exit of the blast freezer — 4 years at -18°F, a company hoodie where coveralls should be. His last two fingers on his left hand have gone white past the second knuckle. The clinic calls it Raynaud’s. The insulated suit costs $185. The heated gloves cost $64 a pair. His fingers cost nothing on my balance sheet.
Let me show you the law underneath the fish.
The dollar is 57% of every reserve transaction on earth. My Vietnamese supplier takes my check at par. My credit line costs 90 basis points less than it would if the dollar fell. The arrangement is older than the Federal Reserve, older than the Republic. The Dutch had it. The English had it. We have it. The face changes. The arithmetic doesn’t. Carleen stands inside the architecture. The dust does not care who holds the reserve.
“But he answered one of them, ‘Friend, I am doing you no wrong. Did you not agree with me for a denarius? Take what belongs to you and go. I choose to give to this last worker as I give to you. Am I not allowed to do what I choose with what belongs to me? Or do you begrudge my generosity?’” — Matthew 20:13–15
I am allowed. The dollar is mine. The margin is mine. The dust is Carleen’s. She agreed to the shift for $92. The reserve premium she doesn’t see: $132 a shift. I am generous. I provided the bandana price. I haven’t provided the bandana.
Senator Scott wants Congress to cut $40 trillion in debt so the dollar holds. The $40 trillion in Treasuries is what the world holds as dollars. The supply IS the debt. He knows this. I don’t need to. My budget has one line: $8,900, unbudgeted. The quarterly statement arrives Friday.
The fish ships Thursday. Carleen’s shift starts at 5. The dust will be there. So will the margin.
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.