Goodwin, Harold L., Jr.

English

Research Papers in Economics

SOUTHERN JOURNAL  OF  AGRICULTURAL  ECONOMICS  JULY,  1985
DISCUSSION:  CRITICAL  ISSUES  IN  AGRICULTURAL  LABOR
MARKETS
H.  L.  Goodwin,  Jr.
I was  quite pleased that the  SAEA chose to  creased.  While such information is necessary
include  a session dealing with critical issues  in the beginning to understand critical issues
in  factor  markets  in  agriculture  and  even  in  agricultural  labor,  specific  data  enabling
more pleased to be selected  as a participant.  us,  as  scientists,  to  reasonably  analyze  the
While  agricultural  economists  have  tradi-  immigration  questions  currently  faced  by
tionally  recognized  land,  labor,  and  capital  policymakers  are inadequate. As aptly pointed
as the major inputs in production agriculture,  out by Emerson,  questions  related to foreign
only limited  attention has been  given to the  workers  in the labor force  have been  prom-
labor input.  Perhaps this stems from the his-  inent in the past few years.  Because  most of
torically  abundant  supply of agricultural  la-  these workers are not sanctioned, their exact
bor  supplied  by  rural  residents  and  farm  numbers remain unknown; estimates abound,
families. Though farm families still comprise  ranging  from 3.6 to 6  million. Judging from
a  substantial  proportion  of  all  farm  labor,  the  effort  devoted  by the  98th  Congress  on
there are 2.5  million hired workers.  Over  47  the  Simpson-Mazolli  bill which was  not en-
percent  of all  farm  operators  utilized  hired  acted, one could well expect a new initiative
labor  in  their  1981  production  activities  in  this  Congressional  session  to  forge  some
(USDC;  August,  1983).  Underscoring  the  palatable  legislation  concerning  the  ques-
growing importance  of the agricultural labor  tions of foreign workers  and immigration  re-
issues facing  U.S.  producers  was  the USDA's  form.  (Key in the provisions of the Simpson-
establishment  in  1980  of  the  Agricultural  Mazolli bill were employer sanctions for those
Employment Work Group. This committee of  found to employ undocumented  workers and
27 professionals related in various capacities  guidelines  for  the  employment  and  availa-
with agriculture and/or labor were to identify  bility  of documented  H-2  workers.)
and  discuss  issues  pertinent  to  agricultural  Emerson  appropriately  begins  his  discus-
labor  and  make  recommendations  on  how  sion  of  the  immigration  question  with  an
best to  address  these  issues  (Rosenberg  and  analysis  of legal  foreign  workers.  The  pro-
Warner).  gram whereby workers can be legally brought
The agricultural  labor  arena  is broad  and  into the United States is referred to as the H-
many faceted.  Dr.  Emerson  has provided  us  2  program. While not limited to agriculture,
with a rather thorough yet succinct overview  the majority of H-2  workers  in the past have
of those  issues which  he views as  critical to  been  employed  in agriculture.  I  agree  with
agricultural labor markets in the 1980's. Three  Emerson  that  close  scrutiny  of the  H-2  pro-
primary issues were  identified:  (1)  immigra-  gram  could  'provide  a  useful  window  to
tion,  (2)  the  1985 Agricultural  Bill, and  (3)  observe a  more extensive program as an
international  trade. Due to familiarity,  I will  alternative to the illegal problem."
focus  my discussion  on the  legal and illegal  As  Emerson's  paper  offers  an  ample  and
aspects  of immigration  and  on international  accurate assessment of the body of knowledge
trade  competition.  concerning  the H-2  program,  it is important
Recent  release  of the  1982  Census  of Ag-  at this juncture  to concentrate  on the  major
riculture  provides  a benchmark  from which  weakness in the program itself, determination
we  may  work.  The  trend  toward  increased  of the adverse effect wage rate (AEWR).  Emer-
reliance on hired  labor has continued,  while  son  points  out  that  the AEWR  is  an  admin-
the  total  number  of  farm  workers  has  de-  istratively set wage  rate  which prevents  the
H.  L. Goodwin,  Jr.  is  an Assistant  Professor,  Department  of Agricultural  Economics  and Rural  Sociology,  Texas
A & M University.
Invited  paper  presented  at  the  annual  meeting  of  the  Southern  Agricultural  Economics  Association,  Biloxi,
Mississippi,  February  3-6,  1985.  Invited papers  are  routinely published  in the July SJAE without editorial  council
review  but with  review of the copy editor  (as  per Executive  Committee  action June  25,  1982).
Technical  Article  TA-20309  of the Texas  Agricultural  Experiment  Station.
99labor market from  obtaining  a market  clear-  into  the  near  future,  the  scenario  of  large
ing  wage  and  employment  level  given  the  numbers  of  illegal  workers  entering  the
nature  of supply of and demand for agricul-  United  States will  continue.
tural  labor.  He  asserts  that  appropriate  de-  Controversy  with respect  to  the  effect  of
termination  of  AEWR  is  a  "catch-22"  these  workers  on  the  domestic  work  force
phenomenon,  resulting  in  domestic  worker  continues,  with little  consensus  or concrete
displacement  and wage  depression if set too  analysis  existing  to firmly undergird  the hy-
low;  if set high enough to prevent this, jobs  pothesis  that  these  illegal  foreign  workers
will be  filled domestically.  He  sees the  key  take jobs which would otherwise  be held by
question  as,  "what are the gains and losses  domestic  workers  (Dallas  Morning  News;
associated with  H-2 programs?" In  other  Keely). Assuming that effective control of the
words,  do  net  gains  result  in the  domestic  U.S. borders could be achieved, it is probable
and foreign economies  as a result of foreign  that other industries will be affected equally,
worker  programs?  It  is conceivable  that  for  if not to  a  greater  extent,  than  agriculture.
products  for  which  the  market  determines  A valid assertion with regards to agriculture's
price, product price gains for the consumers,  adjustment  to  changes  in supply  of foreign
and additional  profits accuring  to producers  workers was  cast by Emerson when he stated
could more  than  offset  losses  which may be  that the number  of migratory workers  in  ag-
incurred by domestic  workers.  riculture  following  the  end  of  the  Bracero
Regardless of the method of evaluating the  program doubled and then declined  over the
appropriateness  of the AEWR, the crux of the  next few  years.  It is not  known whether ad-
matter  is  how  the  AEWR  is  determined.  To  vances  in  mechanization  or  illegal  Mexican
date,  the  literature  provides  no  sound  the-  workers  were  responsible  for  the  decline.
oretical  constructs  or  well-determined  Zahara andJohnson indicate that in processed
method by which the mystical  AEWR  is  con-  foods the reduction of labor has come through
sistently derived.  Perhaps  it is  important  to  extensive use of mechanization in most cases.
develop  a  sound  basis  for  determination  of  Sufficient evidence  exists for me to conclude
AEWR  before  potential  immigration  reform  that it was  a  combination  of mechanization,
policies  which  embody  AEWR  as  their  cor-  illegal foreign workers, and a change in crop-
nerstone  are  implemented.  ping patterns that precipitated such a change.
Illegal foreign workers pose the immediate  The arena of international product markets,
problem in agricultural labor specifically and  influenced  to  a  large  degree  by flexible  ex-
in the  entire  work force  in general,  partic-  change  rates,  and exposure  of consumers  to
ularly in the South.  While conventional  wis-  new imported products, will significantly im-
dom  has  suggested  that  agriculture  is  the  pact on agricultural labor as well. As Emerson
primary benefactor,  or malefactor, depending  points out, decreasing demand for a product
upon your viewpoint, of illegal foreign labor,  translates  to  decreasing  factor  markets,  pri-
recent  literature  indicates  that  the  bulk  of  marily  in  the  major  export  commodities.
illegal  foreign workers  may now be  moving  While  fruits,  vegetables,  and  horticultural
into  non-agricultural  jobs  in  metropolitan  specialty crops  are not generally  considered
areas, utilizing a somewhat sophisticated  net-  as export commodities,  they are impacted by
work of family and friends  to move through  such product-factor  relationships.  Of partic-
the  migratory  streams  to  their  destinations  ular interest  is  labor.  I  differ  with  Emerson
(Jones).  In fact, recent statistics indicate  that  in  his  statement  that  such  specialty  farms
fewer than  one in three of all illegal foreign  usually  have  a  higher  proportion  of family
workers apprehended by the Immigration and  labor.  In fact,  the highest proportion of hired
Naturalization Service  (INS)  are employed in  workers  is  found  in  horticultural  specialty
agriculture  (Glover,  INS).  farms  (Coltrane).  Emerson  was  exactly  on
Several factors have contributed to the rel-  target,  however,  when  he  characterized  the
atively unchecked  influx of immigrants from  excess supply of labor in  Mexico and excess
Mexico,  which comprises  the bulk of all  il-  demand  for  labor  in  the  United  States  re-
legal  immigrants  to  the  United  States.  Para-  suiting  from  the  highly  seasonal  labor  de-
mount among these, as eluded to by Emerson,  mands  for fresh  fruits  and  vegetables.  This
is the  relatively poor  economic  situation  of  will  undoubtedly  encourage  continued  mi-
our neighbors to the south  in comparison  to  gration  into  the  United  States  by  undocu-
that of the United States.  In light of the high  mented workers.
likelihood  that  such  a  position  will  remain  Most  germane  to  the  question  of  interna-
100tional product  markets  are the  effect  of the  In  a  meeting  last  fall,  the  president  of the
peso  devaluation  and  the  highly  unusual  Southwest  Pickling  Cucumber  Association
weather patterns which have persisted in the  summarized  the  feeling  of  many  when  he
United States for the past two winters  (Smith).  said,  "I don't necessarily mind playing the
Mexican growers are now in a strong position  game as long as I  know  who  the players
relative to Florida for the six major vegetable  are and what the rules are.  We  aren't out
crops.  Florida  and  Mexico  supply  approxi-  to violate any provisions, it's just that we
mately  90 percent  of six winter vegetables.  can't  get consistent rulings  from regulatory
Since  1982,  the Mexican share of the market  agencies.  "As a result of this and other prob-
has increased from  35  to 39 percent  (USDA,  lems,  many  firms  are  shifting  to  company
1984).  It  is  likely that the  latest freeze  will  crews, gradually replacing the loosely struc-
accentuate  this  growing  market  share.  Cou-  tured crew-leader concept  of labor provision
pled with the impact of the last two winters  to help ensure that regulations are being met.
on the citrus industries  in Florida and Texas,  With respect  to such matters  as  pesticide
the  stage  is  set  for  increased  imports  from  application  provisions  and housing  require-
the Central  and South American countries  in  ments, many employers  of agricultural  labor
citrus  fruits.  More  than  60  percent  of all  are beginning  to look at alternatives  in cul-
frozen orange juice concentrate, for instance,  tural  and harvest  methods  to help  alleviate
now comes from  Brazil. With the impacts  of  the  pressures  that  now  confront them.  In  a
the economy,  weather and non-restrictive  la-  recent  survey  of  growers  and  shippers  of
bor policies in the Latin countries, conditions  specialty crops in the Lower Rio  Grande Val-
appear favorable  for  increased  international  ley  of  Texas,  respondents  indicated  that
market  competition,  particularly  in  horti-  changes  in  cultural  practices  and  cropping
cultural  specialty crops.  patterns  and  partial  or  extensive  mechani-
To  this  point,  my  discussion  has  focused  zations  to  reduce  labor  requirements  are
on those  issues delineated  by my colleague.  likely,  given  the current  trend  in regulatory
It is incumbent that I put forth an additional  practices.
issue which  is,  in particular,  critical  to  the  Data indicate  that Americans  are  consum-
labor  intensive  agriculture  of  horticultural  ing  more  fresh  produce  than  ever  before
specialty  crops.  Before  I  do  this, let me  re-  (USDA;  June,  1984).  The proportion  of the
view some  facts.  Production  of fruits,  vege-  U.S.  food  dollar  devoted  to fruits  and vege-
tables, nuts, tobacco, sugarcane, and nursery/  tables has increased  as well, from  15.7 cents
greenhouse  commodities  accounted  for  in 1978 to 21 cents in 1981  (USDA;  Novem-
slightly  over  20  percent  of  the  $44  billion  ber,  1984).  Results  of  a  1984  nationwide
in revenues  generated  by agriculture  in the  survey of consumers reveals that the changing
South  and  was  as  much  as  73  percent  in  socio-economic  and  demographic  structure
Florida  (USDA;  September,  1984).  Labor  of  the  United  States  is  favorably  disposed
comprised  over  35  percent  of all  expendi-  toward  even  greater  increases  in  consump-
tures on these farms. Three of the six leading  tion of fruits  and vegetables  in future years
states  in  employment  of hired labor  are  in  as the  mean age  of the population  increases
the South as well.  It can be seen,  then,  that  and  as  society  becomes  more  health  con-
labor  intensive  agriculture  is  of  major  im-  scious  (Campbell).
portance  to the region.  These  trends  again underscore  the impor-
The  issue  I wish to raise is that of govern-  tance  of  effectively  addressing  the  critical
ment regulation, both state and federal.  Such  issues  in agricultural  labor.  Emerson  identi-
regulation is not limited in scope to the more  fled  the  foreign worker  problem  as  the  key
commonly  cited  minimum  wage,  worker's  issue  affecting agricultural  labor today in  his
compensation  and unemployment insurance,  concluding remarks. I have attempted to aug-
but includes a wide array of practices ranging  ment and broaden his remarks  by raising the
from  pesticide  application  to  worker  hous-  additional  issue  of  government  regulation.
ing.  Looking  first  at wage  and fringe  benefit  There  is  a pressing need to coordinate  inter-
provisions,  it  appears  that  liability  for  any  pretation and implementation of existing and
violations  of  these  regulations  varies  de-  future  policies  dealing with agricultural  la-
pending upon the agency responsible  for ad-  bor. In the long run, agriculture will probably
ministering the program.  Such inconsistency  continue to adjust to changes in labor markets
in interpretation is, to say the least, unsettling  through development  of new technology and
to  growers  and  shippers  of specialty  crops.  changes in cropping patterns. The degree and
101rapidity of these changes remain in question.  ess  and  give  insights  with  respect  to  the
Suffice it to say that there  is ample occasion  adjustment process by the agricultural sector.
for  meaningful  research  to be conducted  in  I  am  confident  that we  can  respond  to  the
agricultural  labor.  Once  again  we,  as  agri-  need for analysis and make recommendations
cultural economists,  have the opportunity  to  with rigor and objectivity  when  necessary.
significantly  impact  the  policymaking  proc-
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DISCUSSION: CRITICAL ISSUES IN AGRICULTURAL LABOR MARKETS

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