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Analysis of farm labor economics in California

Philip Martin of UC Davis prepared a fresh analysis of labor economics in California’s produce growing industry. He challenges the assertion that there is a labor shortage, which assertion in behind the move to get AgJobs passed by Congress. I have cited Martin’s work in the past. Below is a summary of his new study from the Center for Immigration Studies, which is opposed to granting rights to illegal immigrants.

The study is called Farm Labor Shortages: How Real? What Response?

# Production of fruits and vegetables have 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%) 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 slower 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 labor 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.

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