FARM WAGES AND FOOD PRICES
Farinholt, Mary K.
FARM WAGES &FOOD PRICES by MARY K. FARINHOLT The wage negotiations of big industry continually remind the consumer of his own stake in industrial wages. But he is rarely reminded of wages on the...
...Balancing the supply and demand is entirely in the hands of the Secretary of Agriculture...
...Farm wages have startling variations: from about 40 cents an hour in parts of the Southeast, to $1.22 in Washington state...
...If most of them could not respond to higher farm wages by making the consumer pay, how would they react...
...Attempts to unionize farm workers have failed repeatedly and union organization as it now exists is not a practical influence on national farm labor wages...
...Half the farm workers are hired for field crops, chiefly cotton...
...Are they the Mexicans who sometimes make the news as illegal "wetbacks" or as legal "braceros...
...Now, however, the wedge has a new edge: Secretary of Labor James P. Mitchell, who is an outspoken supporter of a wage floor for agricultural workers...
...And with some readjustment, society is considerably better off...
...employment service will admit to prevent crop loss if domestic workers do not flock around at prevailing wages...
...Farm wages lack the growth capacity of industrial wages partly because the farm labor market is essentially and chronically oversupplied...
...Despite an unusually strong influence on market price, and a better share of the consumer price than growers of most commodities enjoy, the trend among sugar growers has been toward more mechanized equipment, larger acreages, higher yields per acre...
...Those concerned with helping the farm worker are not discomfited by this opinion, since they believe over-supply has been the great bane of farm labor...
...farm wage bill...
...The spread between farm and retail prices has been widening, and the farmer's share in the consumer dollar has declined...
...Texas and California, in 1954, accounted for 28 per cent of farm wage payments...
...So suppose we double the agricultural rate and it now costs six cents to pick beans, so beans have got to sell for nine cents...
...How have the growers reacted...
...prevalence of child labor under 14...
...On the other hand, in eggs and beef the farmer's share of the retail price is relatively large, but his cost of labor is lighter...
...We choose instead to pay the price necessary to support an adequate wage...
...Farms having a gross yearly income of $25,000 or more constitute only four per cent of commercial farms but 'they spend 50 per cent of 'the total U.S...
...It is the Secretary's quotas which finally determine the price of sugar...
...All its workers are union members and all its farm workers receive $1 an hour or more...
...In 1955-56, 64 per cent of Florida oranges for concentrating were acquired from growers' co-ops, profit-sharing growers, or processor-owned groves...
...In 1957, the average prevailing wage per day in Puerto Rico was $3.54...
...He decides the amount needed for home consumption and allots quotas suitable to fill the need, right down to the individual domestic farm and the individual importer...
...unavailability of health services, schooling, and voting to migrant families...
...a minimum wage would price these pathetic hangers-on of industrial society out of their last labor market...
...Of their receipts, farmers paid 9.6 per cent in wages...
...Seabrook is a notable exception to the lack of union organization of farm labor...
...Growers need a waiting labor supply to prevent crop loss...
...More than 75 per cent of the workers are employed by 6.8 per cent of the farms...
...In food production, the main demands for labor are for orchard thinning...
...Fruit and vegetable growers generally have heavy labor costs but retain a relatively small share of the consumer price...
...And it can pick beans— counting amortizing the cost— for about 3.25 cents...
...Foreign workers are now a normal part of the farm labor supply, acting as a depressant on efforts to improve local farm wages and conditions...
...American agriculture is diverse...
...Subsidies are paid to growers for staying within their production allotment...
...I am convinced that agricultural workers must be given the protection of minimum wage and maximum hour legislation...
...Speaking before a conference of farm employers and government officials, Mitchell said of farm workers: MARY K. FARINHOLT is a Washington free lance writer who covers labor developments on Capitol Hill...
...What you spend on farm labor depends to a great extent on which foods you buy, because the price spread and the portion paid for farm wages differ for each commodity...
...Agricultural labor has been a political issue since the 1930's when the farm worker was excluded from all the protective legislation making conditions less risky and more humane for the industrial worker...
...And as soon as beans sell for nine cents, a few farmers are going to go to a farm machinery company . . . who have developed a machine—it costs about $15,000—to pick beans...
...No one expects an upward movement in the farm wage to ripple out to the consumer with any noticeable splash...
...The American Farm Bureau Federation opposes a farm minimum wage hecause, it claims, agricultural labor is a residual labor supply, including many too incompetent to command an industrial rate of pay...
...much of the do-May, 1960 mestic labor called for in harvest time remains unused surplus the rest of the year...
...There is always the threatening ghostly surplus of foreign workers the U.S...
...in Hawaii, $11.82...
...Clearly the need is great for affirmative action soon on a federal farm minimum wage...
...During the last ten years their economic status has been getting progressively worse...
...Conditions were not ripe—as in some earlier years—to raise consumer prices automatically as a blotter for cost increases...
...What influence do farm labor wages have on consumer food prices...
...For sugar cane in Louisiana, man hours per acre declined from 180 in 1938 to 120 in 1952, and have continued to go down...
...The spread covers all charges for processing and distributing farm products...
...This is the much-debated farm-retail "spread...
...by 1954, about 84 per cent...
...The conditions of the most depressed farm workers have been described fully by Secretary Mitchell and others: hourly wage rates as low as 40 cents an hour for a brief work-year...
...Only where the farmer's share of the consumer dollar and his labor cost are both great, might a new minimum wage noticeably increase the consumer price for that product to meet the higher expense for farm labor...
...Said John Seabrook of the unionized Seabrook Farms: "The sort of thing that would happen is this: The price of green beans is about six cents a pound...
...because a mechanic is going to run this machine...
...However, despite inventive variations on the simple farmer-processor deal, farmers generally have little hope of influencing their final market...
...and livestock care...
...Workers in sugar fields are subject to a minimum wage determined by the Secretary of Agriculture...
...It costs three cents a pound to pick them...
...Seabrook Farms Company-—growers and processors of frozen foods— must live with a kind of "minimum wage," a wage set by collective bargaining...
...In Hawaii, where workers are in short supply and wage rates are far higher, mechanization in cane production is much farther advanced than anywhere else, and Hawaii has the highest yield per acre of any sugar cane area...
...fruit, nut and berry picking...
...A lot of pea pickers sweating and straining have been replaced by a few skilled mechanics running combine harvesters...
...During that time, there has been a sharp acceleration in the substitution of farm machinery for farm labor...
...These marketing costs move quite independently of farm prices...
...With the new minimum, wholesale prices for products of low-wage industries did not rise any more than average prices for other products, and effects on the whole economy were too small to be discerned...
...Secretary Mitchell apparently thought it might boost food prices when he said: "In this country we do not choose to keep down our bills, including our food bills, at the cost of overworking and underpaying human beings...
...and about half a million are foreign workers, mostly from Mexico and the British West Indies...
...Some of 'the "regulars" (non-seasonal farm workers) are employed on farms where there is but a single hired man...
...some are American migrants who follow the crops up and down the land...
...transportation of migrant families in overcrowded trucks for as long as twenty hours at a stretch...
...Are they like the "Okies" of The Grapes of Wrath...
...More than half of farm wage workers labor in the South...
...Less than one-third of the farm worker population is regular, like stable resident Jim, spending six months or more in steady employment with one farm employer...
...Obviously we did it through mechanization, through increases in efficiencies, through getting better workers who were more productive...
...The first step toward reckoning the effect of farm wages on your own "market basket"—in the nostalgic language of the Department of Agriculture—is to measure the margin between prices paid to farmers and the retail price you pay for the same product...
...So those fellows are going to start selling beans then for 6.25 cents, and pretty soon the price of beans is going to be back down...
...There is now an energetic effort in Washington to raise farm workers' earnings by enacting a federal minimum wage for agriculture...
...in Louisiana, $5.95...
...In agriculture, economists have noticed 'that farm wage rates have increased more than 300 per cent since the beginning of World War II, while prices of farm machinery have increased about 50 per cent...
...This conforms to the general view that a minimum wage would, by increasing mechanization, decrease the numbers in the farm labor force...
...Would retail food prices rise if a "floor" were put under farm wages...
...Our selling prices have gone down by 15 per cent...
...Who are the more than two million farm workers...
...A lot of pen-pushers in the office who kept books and did the billing have been replaced by a few technicians running IBM machines...
...Sugar growers have had a minimum wage since 1937, although the actual rate is set anew each year and minimum wage standards are not uniform in all sugar areas...
...But more than 55,000 farms hire ten or more workers during the year—the huge corporate farms hiring scores or even hundreds...
...The rest are seasonal, hired mostly for the harvest season only...
...Marketing costs—for wages and profits, taxes, freight rates, utilities, packaging materials—have been increasing since 1945, as have the volume and services of marketing business...
...If wage costs rose 25 per cent, for example, retail prices would be pushed up a mere one per cent...
...However, some of the affected plants made important changes in business operations: new machinery, re-arranged plant layout, reduction of overtime, changes in product...
...Of the seasonal workers, some are local residents working for extra income...
...Sugar production, which has a peculiar status in American agriculture, has always relied heavily upon foreign contract labor...
...No one can tell the exact dollar impact of a 75 cent or $1 per hour minimum wage in agriculture...
...Industry's reaction when Congress raised the industrial minimum wage to $1 per hour in 1955 may throw some light on this question...
...Our sugar comes from sugar cane and sugar beets grown domestically (including Puerto Rico and Hawaii), and from Cuba and the Philippines abroad...
...lack of compensation for injury or unemployment...
...or like Jim at grandma's farm...
...If the minimum farm wage level were forced up, could this cost be passed along to the consumer...
...Growers of certain commodities in certain areas are in a stronger position than most to influence their market...
...Like some low-wage plants hit by a new minimum wage law, low-wage agriculture would probably respond with intensified mechanization and other means of increasing an already leap-frogging productivity...
...The narrowly seasonal demands of farmer-employers—for a single harvest, or a short series of harvests, or a short round of cultivating and thinning and harvest—result in a yearlong oversupply of farm labor...
...This year, the shopper who puts into his market cart sugar, potatoes, orange juice, strawberries, tomatoes, and corn may have a new impulse to question his relation to the farm "hand...
...The political forces that have joined previously to improve the lot of the farm workers are joined again: liberals in Congress, liberal organizations, government and private investigations...
...But the consumer hasn't been hurt and the fellow who is working on the farm, instead of a picker averaging 50 cents to 60 cents an hour, is now a mechanic averaging $2.50 an hour...
...In 1957, farmers received 40 cents of every consumer dollar spent for food...
...housing like that of farm animals...
...But he is rarely reminded of wages on the farm...
...If the farm wage level should rise, even if farmers were able to pass the increase straight along, the consumer would scarcely feel its effects upon his budget...
...In 1944, 25 per cent of sugar beet acreage was harvested by machine...
...That is, less than four per cent of consumers' food expenses went for farm labor...
...What is the consumer's stake in the pay of the worker who cultivates and harvests food...
...They are deprived even of the 'automatic' action of a free labor market, in which a labor shortage tends to bring its own correction . . . Such 'automatic' correction is foreclosed where foreign labor is provided in sufficient supply at whatever wage level already prevails, thus discouraging wages from rising...
...All these forces are aligning in a wedge to push through Congress a farm minimum wage guarantee...
...The typical sugar cane processor is also a grower...
...in Florida, $8.27...
...The Department of Agriculture estimates that 70 per cent of the retail price for eggs (which require practically no processing) goes to the farmer, but only 15 per cent of the retail price of corn flakes, with most other farm products yielding something between these figures to the farmer...
...For example, from 1951 to 1956 food marketing costs increased despite declining farm prices...
...According to a company spokesman: "In the last five years, our farm wage rates have gone up by more than 35 per cent...
...In return for their protected status, sugar growers have been required to share some of their benefits by accepting a government floor under sugar workers' wages...
Vol. 24 • May 1960 • No. 5
