What the Invisible Farm Labor Shortage Is Really About
Senior Editor, CNBC.com
Despite the absolute lack of evidence of anything approaching a farm-labor shortage, complaints about this invisible menace continue to make headlines.
Here's how a recent piece from the Washington bureau of Gannett begins:
Farmers from Arizona to New York are struggling to find enough people to harvest their crops this season, a shortage they blame on state and federal laws designed to crack down on the migrant labor that makes up the bulk of the nation's seasonal farmworkers.
"We see shortages in all parts of the country," said Kristi Boswell, director of congressional relations for the American Farm Bureau. "Farmers are struggling with fewer bodies out there to harvest the crop. They're definitely stressed."
Farmers with labor-intensive crops or livestock, including fruit, vegetables, nuts, Christmas trees and dairy cows say they are being hit especially hard.
"We've got neighbors literally competing against each other just to have enough of a workforce to harvest their crops," Boswell said.
Heaven forefend! Neighbors "literally competing against each other." It's practically a civil war.
The fact is that there is no data whatsoever to support the alleged farm labor crisis. The latest data, issued from the Department of Agriculture on November 27, shows that labor expenses on farms have increased just 0.7 percent over the past year. Costs for hired labor, those who work on the farm long-term, are up just 0.5 percent. Costs for contract labor, the harvest-time pickers, are up just 1.5 percent.
In other words, labor costs are well-below the level of general price inflation. In fact, farm labor costs are still below where they were in 2008 on a nominal basis. In real terms, labor costs are falling for farmers.
This doesn't mean all is well for the farmer. There are genuine challenges and for the first time in years, farm profits seem set to fall this year. The Department of Agriculture is projecting farm revenue to come in at a record $448.5 billion, which is a 4.6 percent gain over last year. But expenses are rising for farms.
The big increases in expenses are the cost of feed (up $12.2 billion, or 13 percent), seed (up $2.1 billion, or 11.9 percent), fertilizer (up $1.6 billion, or 6.3 percent), and pesticides (up $1.1 billion, or 9 percent). These increases dwarf the $200 million increase in labor costs spread across the nation.
If there were a labor shortage, we'd see the price of farm labor rising rapidly. We just don't see that—indicating that there is no shortage at all. There is, instead, a consist cry from the farm lobby for policy makers to adopt policies aimed at lowering labor costs. Gannet reports, for example, that "the American Farm Bureau and other farm groups are working on a plan to present to the new Congress that would allow more migrant laborers to work legally on U.S. farms."
That's what all this noise is really about: enacting policies to crush already low farm wages by allowing farmers to import more foreign workers.
- by CNBC Senior Editor John Carney
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