Thread: Farm Labor vs. Cost of Food

Farm Labor vs. Cost of Food
Rural Migration News UCDavis.edu
Apr 12, 2007

The next time you encounter the argument about the need for "cheap" labor refer to this excellent study on the effect of farm labor on produce cost, found in Rural Migration News. Read the WHOLE article!! Excerpt:

"The 109 million consumer units spending an average of $322 and purchase a total of $35 billion a year in fresh fruits and vegetables. Even though strawberries are picked directly into the containers in which they are sold, and iceberg lettuce gets its film wrapper in the field, farmers received an average 16 percent of the retail price of fresh fruits in 2000, and 19 percent of the retail price of fresh vegetables, so $322 from the consumer means $56 to the farmer (0.16 x 163 = $26 + 0.19 x 159 = $30). Farmers do not pay all of this $56 to farm workers- farm labor costs are typically less than a third of farmer revenue, meaning that farm worker wages and benefits are less than $18 per household a year, or less than one half of one percent of average annual spending.

This means that consumers who pay $1 for a pound of apples, or $1 for a head of lettuce, are giving 16 to 19 cents to the farmer, and 5 to 6 cents to the farm worker.

What would happen if the influx of immigrant workers were slowed, farm wages rose, and the increase in farm labor costs were passed through to consumers? In 1966, the fledgling United Farm Workers union won a 40 percent wage increase for table grape harvesters, largely because Bracero workers were not available. Average farm-worker earnings were $7.56 an hour for US field and livestock workers in 2000, according to a USDA survey of farm employers, and a 40 percent increase would raise them by $3 to $10.58. If this wage increase were passed fully to consumers, the 5 to 6 cent farm labor cost of a pound of apples or a head of lettuce would rise to 7 to 9 cents, and the retail price would rise by 2 to 3 cents.

For a typical household, a 40 percent increase in farm labor costs translates into a two to three percent increase in retail prices (0.175 x 0.33 = 6 percent, farm labor costs rise 40 percent, and 0.4 x 6 = 2.4 percent), so total spending on fruits and vegetables would rise by $8, from $322 a year to $330 a year. However, for a typical seasonal farm worker, earnings could rise to $11,200 a year, up from $8,000.

However, the wage increase may lead to farm productivity improvements, so that, in response to higher farm wages, consumer prices may decrease rather than increase."

http://migration.ucdavis.edu/rmn/more.php?id=625_0_5_0

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Have a nice day all!
Rob
www.NetLog.com/iQuestionEverything