WASHINGTON, June 18, 2014 - In recent years the California Farm Bureau Federation and the Western Growers Association, along with other farm groups and the U.S. Chamber of Commerce, have lobbied for policies that make it easier to hire foreign workers from Mexico and elsewhere.

But a study by Edward Taylor, an agricultural economist at the University of California, Davis, shines a new light on the labor shortages and suggests that legislative efforts to improve the farm labor situation may be fruitless in the long term.

Calls for a guest-worker or similar programs are futile because Mexico is getting wealthier and the pool of farm workers is drying up, Taylor argues – similar to what happened in the U.S. Not only are Mexican workers shifting to different work sectors but Mexican farm wages are also increasing, he says.

This combination of a declining farm labor supply and rising demand for labor on Mexican farms is raising the minimum U.S. farm wage needed to tempt new workers to migrate northward. The policy implication is that immigration reform is not the answer to an abundant supply of low-cost farm labor from Mexico, Taylor says.

Taylor used data on individuals from a nationally representative sample of rural Mexican households to study shifts in the migrant labor force over time. The Mexico National Rural Household Survey is unique in that it provides data from three survey rounds - 2003, 2008, and 2011 - on migration from rural Mexico to both the U.S. and destinations within Mexico.

Each round collected detailed information on migration destinations and whether migrants worked in the agricultural or non-agricultural sectors. The final two survey rounds make it possible to compare migration patterns before and after the onset of the 2008 recession.

The number of international migrants increased in the years leading up to the recession between 2002 and 2007, Taylor said. However, between 2007 and 2010, with the onset of the recession, there was a sharp decrease in international migration. Internal migration, on the other hand, grew substantially for both the farm and non-farm sectors from 2002 to 2007, as well as from 2007 2010. The data reveals that migration from Mexico to the U.S. fell dramatically after the 2008 recession, and many former immigrants found work in Mexico.

The combined shares of the workforce migrating to agriculture in either Mexico or the U.S. decreased between 2007 and 2010. In contrast, the percentage of Mexico's rural workforce migrating to non-farm work within Mexico grew steadily, Taylor found. Non-farm workers in Mexico represented the largest share of the migrant labor force in all three of the survey years. The increase in rural Mexicans working in non-agriculture sectors began before the recession and persists, indicating a structural shift of Mexican labor away from agriculture.

The shift in labor supply from farm to non-farm work in Mexico is consistent with global economic trends. Worldwide and in Mexico, the share of the labor force working in agriculture is decreasing, Taylor said.

Taylor explained what this all means in a presentation to the California Chamber of Commerce in May. He noted that there has been a huge change in Mexico’s agricultural policies, as well as advances in technology (including the Internet) and a growing integration of the global economy, including the North American Free Trade Agreement.

According to Taylor, U.S. workers basically began avoiding hired farm work in the 1900s. While some children in the U.S. dream of being farmers, none dream of being hired farm workers, he said. Mexican workers, who were at an earlier stage in the farm labor transition, still thought of hired farm labor as good jobs, and were able to fill a gap in the U.S. for a time. But as rural Mexicans shift out of farm work, immigration policy stopped being the solution, Taylor said.

This means U.S. farms will have to produce more with fewer workers by changing crop mixes and adding more efficient labor management practices and new technology, Taylor said, making a smaller (and older) farm workforce more productive.


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