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What's Really Behind the Decline in Mexican Farm Workers?

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The campaign to avoid paying farm laborers market wages—more popularly known as the "farm labor shortage"—took an interesting shift this week with Peter Hecht of The Sacramento Bee reporting on a new angle: Farm workers are too old to do the work.

According to Hecht, the California Farm Bureau Federation—a lobbying group for farm owners—says that more than 70 percent of state agricultural producers anticipate a worker shortage starting this spring.

"Basically, we're running out of low-skilled workers. People simply are not doing farm work to the extent they were doing before," J. Edward Taylor, a University of California, Davis, economist tells Hecht.

Can that be true? Could California, which has an unemployment rate of 9.8 percent, really be running out of low-skilled workers? What could be causing that?

Hecht spins a nice little story about "graying" California farm workers with "bronzed" and "weathered" features. So why aren't the farms attracting younger workers?

Here's Hecht:

In many cases, the children of farmworkers who arrived decades ago have little interest in field work, leaving much of the vital labor to their elders.

Tighter U.S. immigration enforcement, as well as brutal cartel-driven violence along the Mexican border, have deterred many potential workers from attempting to cross.

And, amid a rebounding economy in Mexico, Mexican farms are facing their own labor shortage and have plenty of work to offer at home.

The farm lobby and its libertarian allies want you to concentrate on the central reason Hecht offers: border enforcement and cartel violence. The problem is that the evidence doesn't really support this view very well.

In a recent post on the Oxford University Press blog, Taylor and co-author Diane Charlton explain:

Tighter border enforcement and drug-related violence along the border may deter migration, but our analysis suggests that for US agriculture their main effect is largely secondary, reinforcing a negative trend in rural Mexicans' willingness to do farm work. For example, after the "great recession" in 2008, the share of Mexican immigrants working in agriculture decreased more than the share working in non-agriculture. The recession had a large negative impact on construction and service jobs in the non-farm sector while labor demand in the farm sector remained steady and commodity prices rose. If unemployed workers in the non-farm sector sought jobs on US farms during the recession, then one might expect the supply of agricultural labor to increase. Data show that some immigrants did shift from non-farm to farm work after the recession, but more shifted from farm to non-farm in the US. If the decrease in immigration in recent years were the result of increases in border patrol or drug-related violence, then the decrease in farm labor supply should be similar to the decrease in non-farm labor supply, but the data show the opposite.

In other words, the supply of farm labor is shrinking faster than the supply of non-farm labor. Which means that a good deal of the supply problem is not about the borders. Rather, it's competition from better jobs.

This isn't confined to Mexicans or Mexican-Americans in California. It's happening in Mexico, too.

"Mexico is following the pattern of countries around the world: as its income rises, workers shift out of farm work into other sectors. Mexico's per-capita income, adjusted for the cost of living, now exceeds $15,000 per year. Growth in Mexico's non-agricultural employment began before the recession and persists now. As non-farm opportunities increase, the Mexican workforce will continue moving out of agriculture," Taylor and Charlton write.

So what should farms do to attract labor?

"US farmers will need to offer higher wages to induce new workers to migrate northward to US farm jobs," write Taylor and Charlton.

But the farm lobby has another idea. Instead of paying the workers larger shares of farm revenues, they want to pay them with citizenship.

"Farm lobbyists and elected officials are discussing remedies that include granting legal status to more than 1 million undocumented farmworkers in the United States and establishing an expanded guest worker visa program for agriculture to ensure a steady supply of laborers," Hecht reports.

From the point of view of farm owners, the nice thing about granting legal residency to farm workers is that they get to increase the value of a laborer's compensation without increasing what the farm owner has to pay. The farm profits stay private but the labor costs are socialized.

Expanding the guest worker visa program is great for farmers because it effectively blocks out non-farm competition for these workers. In fact, one of the farm lobby groups is proposing requiring multiyear contracts in exchange for legal residency. They don't have to worry about workers being lured away by factories or retail outlets or construction jobs because the terms of their visa lock them in to farm work.

In short, the farm lobby's response to increased competition for Mexican labor is to pay workers with U.S. citizenship and prevent other businesses from competing for these workers. Which makes perfect sense. Why improve working conditions or pay workers competitive wages when you can just get the government to bail out your noncompetitive compensation?

  • Jeff Cox is finance editor for CNBC.com.

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