The Farm Labor Prosperity Paradox Philip Martin: plmartin@ucdavis · Highlights 1 • Hired...
Transcript of The Farm Labor Prosperity Paradox Philip Martin: plmartin@ucdavis · Highlights 1 • Hired...
Philip Martin: [email protected]
The Farm Labor Prosperity Paradox
Highlights 1
• Hired workers: average employ, 1.2 million in
2016; 900,000 crop & crop support; 300,000 animal
ag
• Hired crop workers = 70% Mexican-born; 50% not
authorized; from 30% newcomers in 2000 to 2%
• Employer responses: 4 S’s– Satisfy: bonuses, train supers. If supply US workers
inelastic, wage increases do not = more US workers
– Stretch: mechanical aids to make work easier for older
workers & women (conveyor belts; dwarf trees)
– Substitution: labor-saving mechanization (& switch crops)
– Supplement: H-2A workers = fresh blood, but must (1) try to
recruit US, (2) provide housing, (3) pay AEWR
– Race in the fields: imports, machines, & guest workers
Highlights 2
• Share of employment in ag decreases as per
capita income increases
• Within ag, share of hired workers rises because
operator and unpaid family decline fastest
• Hired can be more vulnerable: domestic workers
who cannot escape farm work, unauthorized
foreigners, and guest workers
• Responses:
– Self-help bottom-up unions fail because best workers
get out of ag 1st
– Top-down NGO-buyer agreements, CIW, Fair Trade,
EFI: need subsidies, no employer or worker input
– Government: hold down labor costs for small farms &
provide special ed, health, housing services (US $1
bil)
Highlights 3
• What should be done? Anticipate inevitable
change & implement consistent policies
– Treat factories in the fields as nonfarm employers,
end ag exceptionalism in labor, migration, taxes etc, esp
for large farms
– Freer trade: import Mexican tomatoes, not Mexican
tomato pickers?
– Which subsidies? labor-saving mechanization OR
housing & other services to keep workers in ag
– How to help farm workers make the farm-nonfarm
transition: educate children
– Best way to help a farm worker increase his/her
income? Help them to out of ag. Help children—prepare
for nonfarm.
Share of labor in ag (orange) & GDP from ag (green) fall as
per capita income rises (X-axis); gradual China, sharp Brazil & Nigeria
Share of hired workers (orange line) rises with per
capita income (X-axis). Exceptions ex-USSR
Generally rising share of hired worker over time
Ag exporters have higher shares of hired workers
US FVH ag: 15% of farm sales, 2/3 of farm labor costs
US agriculture: Sales, Labor’s Share, Seasonality
• Farm sales = 54% crops, 46% livestock ($395 bil)
– FVH: $57 billion, or 27% of $212 billion crops
– FVH commodities = 80% of QCEW direct-hire
employment & wages paid
– CA, FL: states where FVH = 90% of crop sales
• FVH: labor’s share: average 30% of
production costs, but wide range, wine
grapes (<10%) to berries (50%)
• Seasonality: Peak-trough ratio = 1.4 million
workers in July, 1 million in January
– Ratio rises as geography down; can be 100 to 1 on a
farm
– CA: 2 workers per full-time equivalent job
3 C’s of FVH farm labor market
• Concentration: Production & employment are
concentrated. Largest 10 FVH farms = 50% prod
• Contractors & intermediaries: Win-win
specialization OR risk-absorbers for violations?
• Conflict: Exit versus voice: easier to exit a
“bad” job (ag & fast food) than to organize &
voice demands to raise wages
– Exit of “best” workers = hard to sustain bottom-up
unions in ag & fast food
– Top-down unions: no locals & local leaders (UFW)
– Top-down worker centers & Fair Trade: NGO-buyer
agreement, employer decides, no worker votes
– Revolving door labor market: employers rely on
newcomers to replace quits
2007-16: US QCEW average emp up 8%, CA 10%, WA 24%
Since 2009: more workers are brought to CA crop farms by nonfarm
employers than are hired directly by crop farms
Same trend in US, but still almost 2 direct hires for each support hire
CA: average emp (blue) and unique workers (red) up 10%
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
2007 2012 2015
Average FTE Employment and Unique Farm Workers: 2007, 2012, 2015
FTE Employment
Workers
Who pays farm wages? QCEW 2016: $42 billion. Big 5 = 2/3
Crop support: 24%; fruit 13%; green 11%; dairy 8%; veg 8%
3,000 US FLCs;
1,400 in CA
FLCs: Increase
efficiency of
worker-job
matching OR act
as risk absorbers?
FLC crews: harvest tree fruits
Hard to monitor workers in trees = piece rates
CA strawberries #1 ag employer: 90% of US 3 billion
pounds (1.5 million tons) from 35,000 acres, 60,000
to 70,000 workers. Piece rates of $1.75-$2/tray
Vegetables: direct-hire
& workers via crop
support firms
(partners)
Nursery & dairy
Big 5 of 20 pay
64% of US farm
wages; 82% of CA
farm wages
5 of 20+ NAICS ag codes account for most US farm wages
Hired Crop Workers: NAWS
• 70% born in Mexico: 70% of foreign-born = unauthorized, so 50% of total unauthorized
• Almost no newcomers (in US less than 1 year). Average age of crop workers = 39 (NAWS)
• Settled families with US-born children: – Follow-the-crop migration <5%
– 55% of families get some means-tested benefits
• Workers: $11/hour; Employers $12/hour
• Average earnings: $17,500-$20,000/year; $100 a day for 200 days of work a year
• Farm work like nonfarm work: live off the farm, commute to work, have 1 farm employer during year
White student farm workers (1970s); Mexicans
Agriculture: feel effects of
fewer unauthorized
newcomers since 2008-09
Unauthorized newcomers down: FWs settled & less mobile
Employers: 4-S responses to fewer newcomers
• Satisfy current farm workers: bonuses, benefits, & supervisor training to retain. If supply of US workers = inelastic, wage increases do not add to supply
• Stretch with mechanical aids that increase productivity: conveyor belts in fields, dwarf trees. How much to invest, how fast to deploy?
• Substitute: labor-saving mechanization. Will wages keep rising to justify investments in dwarf & machines? What priorities for seed companies? (Switch crops?)
• Supplement the with H-2A guest workers. Will Congress end recruitment, housing, & AEWR? Allow H-2A workers in dairy & other year-round jobs? From 10-month to 3-year visas & Asians?
• What balance between mechaniza, migs,
Satisfy: bonuses, benefits, supervisor training & respect
RETAIN but not ENLARGE ag workforce
Stretch: mechanical aids raise worker productivity
Conveyor belts in fields reduce worker walking
Thinning and harvesting apples from platforms
Culture change: do
platform workers want to
share piece rate wages?
Sweet tango apples
Dwarf trees & no ladders
Substitute: mechanize olives, carrots, tomatoes, nursery
Mechanization
LA Times: July 21, 2017: weeding, easy tech & big market
Agrobot: crop-specific machines. Tough tech, small market
Machines or people to pick strawberries?
Consumers: add machine & hand pick to convent & organic?
Robots in defense vs ag: performance vs costs
Supplement with H-2As: 75,000 FY07, 243,000 FY18
Top 5 states: GA, FL, WA, NC, CA: 52% of H-2A jobs certified
Most H-2A workers are younger than 35
Most FVH ag in metro counties: high housing costs
40th percentile fair market rent Monterey 2017: $1,400 for 2-
bedrooms. Earn $12/hour, 160 hours/month = $1,920/month
Housing: T&A $17 mil, 800 beds, $21,000/bed
Return to Bracero-era on-farm housing?
T&A: built for H-
2A guest
workers, but
houses mostly
local workers.
Some local
workers resent
H-2As with free
housing &
transportation
T&A: $125/month/person
Will other Salinas farms
build housing? Housing for
local or H-2A workers?
AgJOBS: repeat IRCA with changes
1. Legalize unauthorized: 3-5 years more farm work to
become immigrants (with families)
2. Easy access to guest workers
• W-3: tied to employers, max 3-year contracts
• W-4: free agent workers who cannot be U >60 days
• Housing allowance to both W-3 & W-4 OK; No SS, UI
Goodlatte: 450,000 H-2C visas (40,000 for meatpacking)
1. 24-month visas for seasonal or year-round jobs
2. Employers attest & post jobs; pay 115% of min wage
3. No transportation or housing for H-2Cs required
CA: 50% increase in minimum wage by 2022 (now $12)
US food system: 21 million jobs; 18 million are nonfarm
Where were these photos taken?
US ag trade: deficit with Mexico since 2014
Big 3 Mex X: tomatoes, avocados,
berries
Big 3 = half $11 billion of US F&V
imports from Mexico
Big 3 US farm exports to
Mexico
Corn, grain, meat
Avocados & tomatoes (blue) lead Mexican ag exports
Red fruit = raspberries & blackberries; red veg = peppers
Most Mexican exports complement US production
Mexican imports peak in winter months
Share of imports in US consumption = 86% of avocados, 74% of
cucumbers, 60% of bell peppers, 57% of tomatoes, 48% of raspberries
Mexico: 25% of global tomato exports.
Mexican Pres Salinas in 1990: Mexico can
export tomatoes or tomato pickers to US
Summary 1 • Farm labor prosperity paradox: employment in ag
down as per capita income up; hired do more of the farm work; hired are more vulnerable
• Farm workers persist: employ expansion offsets mechanization, but workers age, settle, less migrant
• Employer responses
– Satisfy current workers to retain
– Stretch with labor-stretching mechanical aids
– Substitute: labor-saving mechanization (switch)
– Supplement: H-2A workers; reduce recruitment, housing, & AEWR requirements
• Race between machines, guest workers & imports: where to invest?
Summary 2 • Short-term responses: satisfy, stretch, and
supplement. What model for H-2A?– NC & WA: associations recruit H-2A workers
– FL & CA: super FLCs move H-2A workers farm to farm
– Most H-2As: direct hire & employer-provided housing
• Medium-term responses: substitute, supplement, and imports– How fast do machine costs fall & performance improve?
What farm mgt changes: (1) new plantings tailored to machines? (2) lower pack out rates?
– Build housing for H-2A workers or end housing requirement? Invest to assure workers when needed or assume floating workers available?
– Imports: US ag trade, $140 bil X, $100 bil M; imports of FVH commodities rising—ag trade deficit with Mexico
https://giannini.ucop.edu/publications/cal-ag-book/
http: migration.ucdavis.edu
October 2018 Honduran caravan: bolster support for wall?
Headed to the US? Ag guest workers to background
35-day partial govt shutdown Dec18-Jan19 over wall funding
Red line is 654 miles of fencing; 1,295 miles of river
6 prototypes of border walls
Trump base wants wall; does not want immigration
Most Americans: immigration helps more than hurts
Labor strategies & water
Individual or collective effort to increase supply?