Home Ken's Commentaries Will Iowa Packing Plant Bring Prosperity or Poverty?

Will Iowa Packing Plant Bring Prosperity or Poverty?

By Ken Root

Last week, Prestage Farms, Inc. was granted approval to develop a two hundred-forty-million-dollar facility in rural Wright County by the board of supervisors.  Iowa hog farms have twenty million animals in farrowing and finishing operations so there is no doubt this high concentration area in the north central part of the state needs increased slaughter capacity.  But getting approval to build a packing plant is just short of citing a nuclear reactor.  Community opposition is strong no matter what location is chosen.  NIMBY or “Not in my back yard” has expanded to “Not in my state,” as activists have protested every attempt to build in urban or rural settings.   The opposition comes from multiple fronts: pollution, poverty, public incentives and immigration policy.

It should be hard for a rural county or small city to turn down a new employer who wants to invest a quarter billion dollars and bring in a thousand jobs, but residents have been empowered by communities who have leaned on elected officials to reject any industry that is likely to pollute or bring in low wage workers.

Mason City was Prestage’s first choice but the measure failed a city council vote there.  Hog ownership has consolidated so much that there is a small base of support for the industry compared to those who view themselves as “disaffected” by the intrusion of immigrants, degradation of quality of life or disruption of the status quo.

We have limited knowledge of the demographics and logistics of the packing plants of the early twentieth century except as described by Sinclair Lewis in his book: The Jungle.  He viewed capitalism from a socialist perspective and abhorred the working and living conditions of immigrants who gave their lives so the wealthy could become wealthier.

Has this changed today?  Clearly the working conditions have vastly improved but packing plant jobs still require hard labor in an uncomfortable environment.  The pay is not enough for native born Americans to be attracted to anything but skilled or administrative jobs so the unskilled immigrant still plays a huge role in the success of such an enterprise.

Prestage says the lowest wage workers will receive is $37,000 per year but that is for fifty hours per week with overtime on the last ten hours.  If the employer caps workers at fewer hours, wages fall sharply.  Economic reality suggests these employees will still be below the poverty line unless two persons per household have a job.

It may be a good move to delay construction until after the November election.  If Donald Trump is elected, the prospective workforce could vanish.  If Hillary Clinton wins, then it would be more likely for immigration to increase and illegals could become legal by executive order.  Her action wouldn’t fix the immigration problem but it would allow employers to be bolder in sourcing employees with questionable immigration status.

Initially, the plant will bring in many skilled laborers to build it.  The management team will be white collar and well paid.  Construction and supply businesses in the area will see booming times but the reality of operation would settle back into the relationship the plant and community keep with the kill, cut and pack employees.  There are few towns of size within commuting distance so it is likely there will be crowding into substandard housing and pressure on schools and infrastructure.  This can lead to a two class society as the locals keep their distance and the immigrants bond closely with others from their culture.

If the ownership successfully manages the facility, there will be success stories of immigrants who used this as the first rung of entry into American society.  However, the likelihood of the second generation working at the plant is low.  Once a family develops an upwardly mobile mindset, they will likely leave to find better jobs as they enjoy a higher standard of living.  This creates a conveyor belt of people who come in at the ragged base of society who may, or may not, work their way up through the system.

Those who say a packing plant community is “condemned” to stay the same are probably right.  The only options for bringing the industry to a socially acceptable level are automation or unionization.  If machines can do all the work, then the number of low wage employees would drop dramatically.  Skilled people are required to run robots and they command higher salaries.  The packing industry once paid very high salaries but once labor unions were broken in the 1970’s the current era began and appears to be firmly in place.

But there is an ugly reality facing the region if it does not secure this pork plant or other industrial interest.  The economy is depressed and the population is declining.  Each generation gets smaller as farms become larger and young people get an education and head for the cities.  The hope is to reverse existing economic and social trends with economic revitalization.  Love it or hate it, this is reality in rural America.