Farm Labor Shortages: How Real? What Response?
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Executive Summary
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.
[Editor’s Note: “Farm Labor Shortages: How Real? What Response?”by Philip Martin can be read on-line here. or downloaded as a PDF here.]
(Posted on November 7, 2007)