November 30, 2022

Oysters a Bad Business

Get a bad one and you’ll wish you’d never tried shellfish, for sure.  In Texas, some oyster processing companies are having a bit of indigestion with their end of the business cycle because they can’t find enough labor to perform the unpleasant labor needed to turn a pile of oysters into a viable food product.

Typically at this time of year, oystermen are scouring Galveston Bay, rushing to meet orders from area seafood companies. But with no oyster shuckers, Hillman Shrimp & Oyster Co. may not crack a shell at its Dickinson plant this season.

Already, the company — one of the nation’s largest suppliers of oysters — has had to lay off 20 percent of its staff and faces $3 million in lost production, owner Clifford Hillman said.

For nearly a decade, Hillman got the bulk of his shuckers from Mexico under the federal government’s H-2B visa program, which allows businesses to hire foreign workers when U.S. workers can’t be found.

As painful as this has to be for Hillman, the fact is that he’s been running a non-viable business for years and economic reality is finally catching up to him and his company.  The proof?  Hillman’s own words:

Could he find workers if he paid more? Perhaps, but he said to remain competitive, he is limited on what he can pay.

“You’re not only competing with local markets. You’re competing with imported oysters as well,” Hillman said.

When unemployment is low, it’s tougher to find local workers, he added.

“Oyster shucking is a dying art in this country, and you just can’t get enough oyster shuckers,” said Hillman, who in January pleaded guilty to a federal misdemeanor charge of conspiring to commit fraud in relation to hiring undocumented workers for a period before June 2004.

By definition a market wage is the rate at which free people are willing to perform a given task.  If an employer cannot find candidates for a job at the wage being offered then the company is not willing to pay the market rate for the position (with respect to benefits, etc.).

The fact that Hillman cannot make a profit if he pays a higher wage for the glamorous position of oyster shucker does not mean that that workers will not accept the market rate for the job.  Rather, it means that his business is not a viable one because he cannot survive unless he hires workers willing to work for less than a market wage.

Who might that be?  Immigrants, legal and otherwise, being less choosy, are his best bet, as Hillman knows well.  Not surprisingly his Democratic representative is for cutting Hillman some slack:

U.S. Rep. Nick Lampson, D-Stafford, however, supports an extension of the [H-2B] visas.

“If we don’t take action, we run the risk of harming the Texas oyster industry and our economy,” Lampson said in a prepared statement. “The oyster industry in Texas is important.”

Actually, oysters are a niche luxury item of no practical importance whatever.  But Lampson, who took over Tom Delay’s seat after he resigned amid scandal, is willing to bend a few immigration rules to help the industry.

If Lampson does so in 2008 the same problem still exist in 2009 unless there is a dramatic and unfortunate change in the domestic labor market such that local labor is willing to shuck oysters for much less than they will do so today.  Hillman’s business simply isn’t efficient enough to compete with foreign companies’ lower cost structures. 

The business world, with its hard and fast rules of profit and loss, has declared Hillman’s company a loser and only government intervention can forestall its inevitable demise.  In contrast to yesterday’s article about workers being responsible for enhancing their own skills, in this case it’s the business owner whose offerings have fallen behind the times and are now obsolete.

The irony, of course, is that Hillman’s problems with his labor pool were originally created by government interference in the form of visa quotas, without which he would be free to import workers from other countries as he sees fit. 

Oh, what a tangled web we weave when we practice government regulation.

marc

Marc is a software developer, writer, and part-time political know-it-all who currently resides in Texas in the good ol' U.S.A.

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