AiS-LancMtar Farm tug, SrtwNay,ltoy
The Coming Farm Labor Crunch
BY ALVIO. VOIGT
Professor of
Agricultural Economics
In the United
States in 1985, dpWjG
dairy farms paid «
out an average Klip
$14,488 per farm
penses, for both
hired and con
tract labor. Call 188 fIHBI
it $14,500 labor cost per dairy farm.
Hired labor is going to be more
critical in the future.
Mechanization of many farm
operations went full speed ahead
during the 1950 s and 1960 s which
reduced the need for farm
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workers. Since then, advances in
mechanization have slowed con
siderably. This, along with the
necessity to increase farm size,
means there’ll be a need for more
labor.
The ‘gospel’ According
to the USDA
According to a recent USDA 1985
Farm Costs and Return Survey
some 125,000 U.S. dairy farms
representing 87 percent of sales by
dairy farms with labor expenses
were the basis of the $14,500
average labor cost per dairy farm.
Now that’s a powerful average that
would be difficult to improve upon.
Average, though can be
misleading especially when we
really would like to have an
average tailored to Pennsylvania,
or, better yet, an average for a
particular market area.
Nope, the USDA didn’t “crunch"
any more-usable figures for
Pennsylvania.
I phoned one of the
knowledgeable persons at the
USDA’s Economic Research
Service (Robert Coltrane, 202-786-
1932) to see if any trends of dairy
farm labor costs were available.
After all, it would be worthwhile to
know dairy labor costs by year
over the last five or 10 or 20 years.
Again, nope. Back to square
one? Not necessarily.
Any dairy farmer has his own
records which can dramatically
show exactly what’s going-on on
his own farm. Simply line up the
labor expense by year over the last
10 years or so. A farmer’s own
records are an essential starting
point for analysis.
Other Considerations
Our population in the United
States is aging. A labor shortage is
coming, according to
demographers. All employees that
will be hired until the end of this
century have already been born.
There will be 6 million less
teenagers in 1990 than were
available in 1980.
And who would ever think that a
drop in the unemployment rate
would be ‘bad news? ’
The April unemployment report
showed a drop in the jobless to 6.3
percent. This was the lowest level
since March 1980. A low jobless
rate is either good or bad news
depending on which side of the
employee-employer fence you’re
sitting. The economy is continuing
to grow steadily and may be
stronger than some economists
had expected and that’s good
news. Also good news would be the
off-farm job opportunities for farm
family members; in fact off-farm
income is extremely important
and getting more so.
Farm family members ought to
think more about better-paying off
farm jobs, and think about using
hired farm labor to a larger extent.
The bad news for employers is the
relatively fewer available workers
which will create more com
petition (higher wages) in the
labor market.
Have you heard about the
proposed hike in minimum wages?
Legislation has been proposed to
raise the current $3.35 hourly
minimum wage to $5.05 over the
next five years. A bill was in
troduced in the House by Rep.
Mario Biaggi, D-NY. At least two
other bills raising the minimum
wage have also been introduced.
The current minimum wage of
$3.35 has been unchanged since
1981.
Raising the minimum wage will
not only increase the lowest entry
level jobs but also increase the
differential of all jobs above the
minimum. So, in effect, a similar
wage increase provided to the
lowest paid worker will result in
close to that amount given to
workers who were above
minimum. The “pecking order’’
tends to be maintained.
Labor By Type of Farm
Average spending for labor on
farms with hired workers varied
greatly by type of farm in 1985. The
highest average labor expense
occurred with the nursery and
greenhouse ‘farm’ with $72,154;
next were vegetable and melon
farms averaging $54,629 labor
expense per farm followed by fruit
and tree nut farms, $41,360; other
crops, $14,492; dairy, $14,488;
poultry, $12,292; other livestock,
$11,059; tobacco and cotton,
$10,277; ash grain, $7,350; and
beef, hogs and sheep, $6,240. The
average of all farms was $12,745.
Some 860,132 farms were included
in the 1985 Farm Costs and Return
survey.
Upshot?
Hired labor will indeed be more
critical for farms in the future,
(Turn to Page Al 9)