Despite Economy, Americans Don’t Want Farm Work

The article is here: Despite Economy, Americans Don’t Want Farm Work.

There is, evidently, plenty of agricultural work available in the state of California these days. It’s hard work–the type of work most of humanity throughout history had little choice but to perform. And by modern standards, the pay is not that great ($10.25/hr); though our distant ancestors might have considered it astronomically high. Indeed, it is high enough even today to attract a large body of foreign workers (largely from Mexico).

What is it that makes a foreign worker willing to go through all the risk and expense of taking such jobs, when an unemployed domestic worker will not?

A labor economist might answer this question by appealing to differences in reservation wages (an individual’s reservation wage is defined to be the lowest wage he or she is willing to work for). Evidently, Mexican migrants have low reservation wages relative to their American counterparts. Another way of saying this is that the former group are relatively “desperate.” Yet another way of saying this is that American workers can better afford spells of unemployment–they are generally wealthier, and many can draw on UI to make their job search less painful (and presumably, more productive too).

What interests me about the anecdotal evidence reported in this article is what it implies about theories that explain the current high rate of U.S. unemployment as the consequence of a “lack of aggregate demand” leading to a lack of available jobs. I am not sure how well this hypothesis squares up against the sort of evidence reported in this article. On the surface, at least, it appears that jobs are clearly available; Americans just don’t want them–they are searching, or waiting, for better opportunities to arise. To me, the rise in unemployment smacks more of mismatch following a structural realignment of sectoral demands, as opposed to an overall decline in aggregate demand (the latter might explain the decline in employment, but not necessarily the increase in job search activity).

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About David Andolfatto 95 Articles

Affiliation: Simon Fraser University and St. Louis Fed

David Andolfatto is a Vice President in the Research Division of the Federal Reserve Bank of St. Louis. He is also a professor of economics at Simon Fraser University.

Professor Andolfatto earned his Ph.D. in economics from the University of Western Ontario in 1994, M.A. and B.B.A. from Simon Fraser University. He was associate professor at the University of Waterloo before moving to Simon Fraser University in 2000.

His current research is focused on reconciling theories of money and banking. His past research has examined questions relating to the business cycle, contract design, bank-runs, unemployment insurance, monetary policy regimes, endogenous debt constraints, and technology diffusion.

Visit: MacroMania, David Andolfatto's Page

1 Comment on Despite Economy, Americans Don’t Want Farm Work

  1. Ironically, this story came out on a day that Southern California got hit with record high temps. If a person had ANY other choice, would he/she be picking produce in 110+ heat for a wage barely above minimum?

    Farm workers earn every penny of their wages. And if these wages were higher, it may be the key to getting more Americans to take on this tough job.

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