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

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  • Peter B. Dixon
  • Maureen T. Rimmer

Abstract

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.

Suggested Citation

  • Peter B. Dixon & Maureen T. Rimmer, 2022. "Who will pay for workplace reforms in U.S. meat‐processing plants? Simulation results from the USAGE model," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 66(2), pages 400-423, April.
    • Handle: RePEc:bla:ajarec:v:66:y:2022:i:2:p:400-423
    DOI: 10.1111/1467-8489.12470
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    References listed on IDEAS

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    1. Dixon, Peter B. & Koopman, Robert B. & Rimmer, Maureen T., 2013. "The MONASH Style of Computable General Equilibrium Modeling: A Framework for Practical Policy Analysis," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 23-103, Elsevier.
    2. Peter B. Dixon & Maureen T. Rimmer & Robert G. Waschik, 2017. "Updating USAGE: Baseline and Illustrative Application," Centre of Policy Studies/IMPACT Centre Working Papers g-269, Victoria University, Centre of Policy Studies/IMPACT Centre.
    3. Dixon, Peter B. & Rimmer, Maureen T., 2013. "Validation in Computable General Equilibrium Modeling," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 1271-1330, Elsevier.
    4. Adams, Philip D., 2005. "Interpretation of results from CGE models such as GTAP," Journal of Policy Modeling, Elsevier, vol. 27(8), pages 941-959, November.
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    1. Arndt Feuerbacher & Jonas Luckmann, 2023. "Labour‐saving technologies in smallholder agriculture: An economy‐wide model with field operations," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 67(1), pages 56-82, January.

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