2007 November 07 Wednesday
No Farm Labor Shortage Seen

In spite of the self-serving calls of fruit and vegetable farmers for more imported cheap laborers the farming industry does not show signs of a labor shortage or of high wages due to a labor shortage.

For several years stories in the media have reported a farm labor shortage. This study examines this question and finds little evidence to support this conclusion. First, fruit and vegetable production is actually rising. Second, wages for farm workers have not risen dramatically. Third, household expenditure on fresh fruits and vegetables has remain relatively constant, averaging about $1 a day for the past decade.

Among the findings:

  • Production of fruits and vegetables has been increasing. In particular, plantings of very-labor intensive crops such as cherries and strawberries have grown by more than 20 percent in just five years.
  • The average farm worker makes $9.06 an hour, compared to $16.75 for non-farm production workers.
  • Real wages for farm workers increased one-half of one percent (.5 percent) a year on average between 2000 and 2006. If there were a shortage, wages would be rising much more rapidly. 
  • Farm worker earnings have risen more slowly in California and Florida (the states with the most fruit and vegetable production) than in the United States as a whole.
  • The average household spends only about $1 a day on fresh fruits and vegetables.
  • Labor costs comprise only 6 percent of the price consumers pay for fresh produce. Thus, if farm wages were allowed to rise 40 percent, and if all the costs were passed on to consumers, the cost to the average household would be only about $8 a year.
  • Mechanization could offset higher labor costs. After the “Bracero” Mexican guestworker program ended in the mid-1960s, farm worker wages rose 40 percent, but consumer prices rose relatively little because the mechanization of some crops dramatically increased productivity.
  • Labor-saving mechanization can be difficult for one farmer, since packers and processors are usually set up to deal either with hand-picked or machine-picked crops, but not both. Government has a key role to play in facilitating mechanization.

We can stop the influx of illegal aliens and we can deport all the illegal aliens already here without damaging the US economy. A reduction in the supply of cheap low skilled labor would increase the rate of innovation in farm equipment design. The rate of growth of productivity would be accelerated if illegals were deported and manual labor wages increased as a result.

Hordes of Mexican and Central American farm workers just lower the wages of farm workers and stifle innovation in agriculture. Plus, these low skilled and poorly paid workers create health, welfare, and educational burdens we all have to pay for. Cheap labor for farmers is subsidized labor. The labor is subsidized with taxes on all of us.

Share |      By Randall Parker at 2007 November 07 11:15 PM  Immigration Economics

John S Bolton said at November 8, 2007 2:33 AM:

Excellent arguments; if a shortage is asserted of low-literate laborers, those who claim this, must show evidence of rising wages for that class of labor. There is no such trend, but instead declining real wages for several decades running, especially on the low-skill end. We're flooded with this sort of participation in the economy, and the predictable effect is worse and worse stalling of the needed shifts toward higher productivity.

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