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14 Economic Research Service USDA Agricultural Outlook January February 2001 Farm Rural Communities Hired Farm Labor Comparing the U S Mexico s unprecedented economic expansion continues in the U S employers face increased competitive pressures to obtain workers necessary for their businesses In this competitive environment U S farmers are holding their own securing similar numbers of hired laborers as in previous years and able to provide wage increases that generally keep pace with the cost of living However U S farmers rely heavily on foreign born workers most of whom come from Mexico and many of whom lack legal authorization to work in the U S This phenomenon appears to be more prevalent than in the past and reflects wage differentials for farm labor between the U S and Mexico as well as differences in employment prospects A In contrast Mexican agriculture has access to a sizable pool of native born workers Farmworkers in Mexico as in the U S typically complement their employment in agriculture with nonfarm work But unlike in the U S farmworkers are in relatively plentiful supply in Mexico and provide a stable legal source of labor for agriculture This will benefit Mexican farmers as they seek out new export markets Differences in the availability of farm labor affects the economic health of agriculture in both Mexico and the U S including the extent to which agricultural producers participate in international markets Characteristics of Hired Farm Labor U S agriculture employed an average of 890 300 hired farmworkers in 2000 according to USDA s National Agricultural Statistics Service NASS The number of hired farmworkers fluctuates seasonally from roughly 700 000 in January to 1 1 million in July Semi annual data suggest an upward trend in the numbers of hired farmworkers from 1996 to 1999 followed by a decrease in 2000 In October 2000 the average wage for hired farmworkers in the U S was 8 29 per hour Wages for field and livestock workers were generally lower averaging 7 76 per hour The average wage for hired farmworkers does not reflect housing and food benefits that some farmworkers receive from their employers At the same time the average wage outside agriculture was 13 69 per hour and the Federal minimum wage was 5 15 per hour Like the total number of hired workers the wage for hired farm labor fluctuates seasonally but has tended to keep pace with the cost of living since 1996 The relatively high agricultural wage rates in the U S attract foreign born farmworkers especially from Mexico According to data from the Department of Labor s National Agricultural Workers Survey NAWS people born in Mexico made up 78 percent of all U S farmworkers in crop agriculture in fiscal year FY 1998 up from an annual average of 68 percent during FY s 1993 95 People born in Central America constituted an additional 3 percent of farmworkers in crop agriculture NAWS data also show that 57 percent of Mexican born farmworkers were undocumented i e lacked legal immigration status in FY 1998 compared with an average of 51 percent during FY s 1994 95 The figures are similar for all foreignborn farmworkers in U S crop agriculture i e 57 percent were undocumented in FY 1998 up from an average of 50 percent during FY s 1994 95 Off farm employment provides an important supplement to agricultural earnings for both native and foreign born farmworkers During FY 1998 farmworkers in U S crop agriculture were employed for an average of 34 weeks in the U S 31 weeks in agriculture and 3 weeks in nonfarm employment An additional 8 weeks were spent in the U S not working and 9 weeks were spent outside the country U S born farmworkers devoted a greater portion of the year to nonfarm employment while the foreign born not surprisingly spent a greater portion of the year abroad Among foreign born farmworkers time spent abroad averaged 11 weeks in FY 1998 up from an average of 8 weeks during FY s 1993 94 Possible explanations for this shift include heightened enforcement of U S immigration restrictions improved economic conditions abroad that lure foreign born workers to jobs in their home countries and the possibility that increased U S earnings either from farm or nonfarm employment allow foreign born farmworkers to spend more time in their native countries In Mexico agriculture employed about 2 3 million people above the age of 12 as hired laborers in 1998 according to the Mexican Secretariat of Labor and Social Provision s Encuesta de Empleo Employment Survey An additional 136 000 workers performed specialized tasks in agriculture such as the operation of machinery and another 3 5 million Agricultural Outlook January February 2001 Economic Research Service USDA 15 Farm Rural Communities Mexicans worked without pay in the farm operations of their families The potential pool of agricultural workers in Mexico thus consists of almost 6 million people Agricultural employment in Mexico decreased 0 7 percent between 1996 and 1999 due primarily to urbanization absorbing land and labor in the states of central Mexico In these states agricultural employment is falling at an average annual rate of 7 6 percent In the rest of the country however agricultural employment is growing at an annual average rate of 3 8 percent Agriculture employs a large proportion of the population in some parts of Mexico This is particularly true in the southern states which have relatively high levels of poverty and a larger indigenous population For example agriculture represents 56 percent of employment in Chiapas Mexico s poorest state Labor productivity in Mexican agriculture is roughly one fifth the productivity in the rest of the economy About 20 percent of the workforce is engaged in agriculture but the sector contributes just 5 percent of GDP Labor productivity tends to increase as production shifts from basic grains to more export oriented crops such as fruits and vegetables Government efforts to raise productivity in agriculture concentrate on training and technology transfer by private extension services supported by the Mexican government The wage differential between Mexican and U S agriculture is huge The daily wage for 8 hours of farm work in Mexico is about 3 60 in U S currency compared with the U S average of 66 32 in October 2000 However these figures overstate the real wage differential between Mexican and U S agriculture because the cost of living in Mexico is lower than in the U S Agricultural wages in Mexico decreased in

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