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The Direct Economic Impact
of Migrant Farmworkers
on Southeastern Michigan
by Rene P. Rosenbaum
Michigan State University
Working Paper No. 56
December 2001
About the Author:
Dr. Rene Perez Rosenbaum has a joint appointment with the Department
of Resource Development and the Julian Samora Research Institute. A farm
labor expert, his teaching, research, and outreach also focus on the relationship
between development strategies and the economic development of communities.
Dr. Rosenbaum, who holds a Ph.D. in economics from the University of Notre
Dame, was a student of Julian Samora.
SUGGESTED CITATION
Rosenbaum, Rene P. (Ph.D.) “The Direct Economic Impact of
Migrant Farmworkers on Southeastern Michigan.” JSRI Working
Paper 56, The Julian Samora Research Institute, Michigan State
University,
East Lansing, Michigan, 2001.
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The Direct Economic Impact of Migrant Farmworkers
on Southeastern Michigan
Introduction
Having Professor Emerson
as a presenter at this conference reminds me of the national conference
on farm labor he organized in 1980. Although
I did not attend the Emerson conference, I have benefited from reading
the conference papers he later published in the volume entitled, Seasonal
Agricultural Labor Markets in the United States (1984). The context
of
the farm labor problem has changed since the Emerson conference 20 years
ago, but many of the problems of the hired farm labor market discussed
back then are being discussed here today. An adequate labor supply
and
the perennial low return to hired farmworkers, both national concerns
of the hired farm labor market long before the 1980 conference, remain
central issues. However, the approach taken at each conference is clearly
distinct. Whereas this conference seems to focus on the dynamics of
the
farmworker labor market in context of community and regional studies
and issues, the Emerson conference did not give consideration to the
links
between local community issues and the dynamics of the labor market.
As Professor Emerson himself observed in his volume on the conference, “The
focus… has been strictly on farm workers and their employers” (p.503,
Emerson, R.D., 1984).
The views of farmworkers and their employers continue to dominate what
constitutes the farm labor problem, but a community perspective is emerging
that emphasizes the impact of agricultural labor on rural areas. Although
studies linking the farm labor population to local communities are more
common these days, few studies have described the role that migrant and
seasonal farmworkers (MSFWs) play in the local economy of a receiving
community. In the rural areas where they work, seldom has migrant and
seasonal farm labor been treated as a community economic development event,
a form of economic change that contributes to the local economy.
This paper makes a contribution
to the emerging community view of the farm labor problem by examining
the economic impact of the MSFW labor
market on the rural area of Branch, Hillsdale, Jackson, Lenawee, Monroe
and Washtenaw Counties in southeastern Michigan. The next section provides
a synopsis of the three different perspectives of the farm labor problem.
Section three develops a model of farm labor as an economic development
event to measure the economic impacts on rural areas from the presence
of MSFWs. MSFW-dependent agriculture and the MSFW population and labor
market in southeastern Michigan are described in section four. Section
five applies the seasonal farm labor economic impact model to measure
the economic contributions of the farmworker population in Michigan’s
southeastern region for 1997. The findings are used in section six
to
gauge the potential economic impact on the local economy of the H-2A
national policy initiative, a guest worker program that would sharply
increase
the stag vs. family proportion of the migrant workforce. The chapter
concludes with a summary of the research findings and a statement about
the significance
of viewing the farm labor problem as an economic development event.
Perspectives of the Farm Labor Problem
Viewed politically, the traditional labor market approach to understanding
the farm labor problem is not inconsistent with the politics in this country
of the last century and a half. According to Robert Paehike (1999), U.S.
politics has centered on the struggles between economic values such as
capital accumulation, enhanced trade, efficiency and economic growth,
and equity values such as wages, working conditions, social welfare, public
health and public education. Analogously, the current dynamics of the
hired farm labor market can be seen in terms of the political struggle
between the economic values of farmworker employers and agribusiness (and
consumers), and the equity values of farmworkers and their advocates.
In large measure it is the effective expression of the values of these
two groups that has dominated the policy and politics of hired farm labor
in this nation. Their voice remains at the center of many of the issues
that contribute to the current dynamic of the hired farm labor market.
Even though the interests of farmers and farmworkers currently lay claim
to what constitutes the farm labor problem, historically, it is the interests
of the latter group that have dominated the politics and economics of
the situation. The low farm income problem in various forms has always
been the central preoccupation of agricultural economists. Historically,
policies to improve the economic status of farmers have been based on
the view that farmers are caught in the “farm problem” created
by price and income-inelastic product demand in agriculture. Prior to
the 1950’s, parity prices, production adjustments, and marketing
efficiency were the acceptable ways to deal with the farm problem. Another
line of thought, popular since WWII, was the view that farm prosperity
depended on the elimination of “the redundant claimants against
aggregate farm income.” D.G. Johnson (1959) wrote: “Stated
simply, the farm problem is the result of the employment of more labor
in agriculture than can earn as large a real income as the same labor
could earn elsewhere in the economy” (p. 47). Hence, the link was
made between farm prosperity and the need to accelerate technological
advances and off-farm mobility (Fuller, 1984).
In the case of MSFW dependent agriculture, solutions to the farm problem
have focused on securing an adequate supply of low-wage workers to care
for and harvest fruits and vegetables. This approach remains central to
the guest worker legislative policy currently being debated in Congress.
Agricultural interests are calling for an alternative to the H-2A nonimmigrant
guest worker program that allows the U.S. agricultural sector to bring
seasonal foreign workers on a temporary basis when domestic workers are
unavailable. The principle objective is to put in place a foreign worker
program that does not require employers to demonstrate to the Department
of Labor that guest workers are needed before they are admitted. A recent
legislative proposal aims at encouraging the guest workers to return to
Mexico and other countries of origin by calling for a 25% deduction of
the worker’s wages to be paid only in the country of origin if
the worker appears in person (Martin and Taylor, 1998). The lobbying
efforts
by major agribusiness organizations for changes in agricultural guest
workers policy to ease the importation of foreign workers have yet to
succeed. Contrary to the growers claims of a labor shortage, recent reviews
of the H-2A program conclude that there does not appear to be a national
agricultural labor shortage, except in some specific crops or geographic
areas (General Accounting Office, 1998).
Whereas the economics and prosperity of the farm is the central concern
in the economic values perspective of the farmworker problem, in the
equity values perspective the long standing concern remains improving the
persistently
relatively low returns for labor services in farming. The historical
plight and position of the migrant worker near the bottom of the American
labor
market prompted farmworker equity concerns and a belated call for action
in the 1960’s. As a result, the federal government began programs
in the mid-1960’s to help migrant workers and their families. These
federal programs multiplied during the 1970’s and 1980’s
and by 1992, 12 different programs spend over $600 million annually to
assist
migrant and seasonal farmworkers and their families (Martin and Martin,
1994).
In spite of all the federal efforts, MSFWs remain one of the most economically
disadvantaged occupational groups in the country. In the 1980’s,
Varden Fuller (1984) noted that many of the problems faced by migrant
farmworkers in 1980 were the same ones they faced 30-40 years before.
His key policy concern was “the long persisting adverse conditions
experienced by the ‘forgotten people’ who harvest our crops…” And
what Fuller said nearly 20 years ago still rings true; migrant workers
remain one of the most economically disadvantaged and impoverished occupational
groups in the United States (Oliveira, 1992; Griffith and Kissam, 1995;
Martin, 1988; and Martin and Martin, 1994).
The unsatisfactory conditions of American migrant farm labor for most
of this century have failed to change the agricultural sector and its
dependence on a migrant labor system that relies on cheap and ethnic minority
labor. Although the federal assistance programs established to help migrant
workers and their families have enabled many individuals and families
to escape agriculture and the farm labor market, these programs do nothing
to raise the income level of migrants still in the farm labor market (Martin
and Martin, 1994). In other words, when these programs are successful
and farmworkers are able to leave the migrant stream, other migrant workers
simply replace them; the migrant labor system is not changed — only
the faces of the workers who need help are different.1
Existing legislative protection and the regulation of wages, hours,
and working conditions do not seem to protect those remaining in agriculture.
The community perspective of the farmworker problem is emerging amid concerns
over an increasingly global economy. There is a growing interest in locally
based community economic development strategies that emphasize locally
determined community objectives. Scholars and practitioners of community
development are increasingly valuing locality based community development
and citizen participation approaches over other approaches to address
social problems (Aigner, et al., 1999). With their gain in relative prominence,
these new and emerging values representing community interests complicate
and challenge the old debate between economy and equity that has historically
dominated the American politic.
The community view that is emerging does not discount the interest of
farmers and farmworkers. The approach recognized these interests but
expands the analysis of the labor market situation to include the interests
of
and impacts on a broader range of community stakeholders. One distinguishable
line of thought within the community perspective is the emphases on community
attitudes toward farmworkers. The growing demand for predominantly immigrant
agricultural labor across the United Stated has raised resident reactions
and concerns in rural America. Farmworkers continue to face resentment
from white residents, open acts of discrimination, and occasionally acts
of violence. In the 1990’s, communities witnessed an increasing
number of conflicts between immigrants and natives. All kinds of social
problems have been documented: police harassment, housing, increasing
poverty, educational access to migrant children, health services, increasing
needs for bilingual services in hospitals and courts, and concerns over
the integration of farmworkers staying year-round (Hedges, S., Hawkins,
D. 1996; Martin, P., Taylor, J.E., Fox, M., 1996). Community leaders remain
ill equipped to address the resulting tensions.
Another line of thought in the community view of the farm labor problem
considers the economic impacts of seasonal agricultural labor markets
on rural areas. Some research out of California in the 1990’s, for
example, identified negative impacts of the workers on national and local
economies. That labor market research argues that immigrant workers take
over jobs from domestic workers and freeze low wages into place (Martin
and Taylor, 1998). Other economic impact research however, suggest that
the presence of a migrant and seasonal agricultural labor market has a
positive impact on the local economy of receiving communities. (Adams,
Jeffrey L. and S.A. Severson,1986; Sills Erin, Jeffrey Alwang, and Paul
Driscoll, 1993; and Trupo, Paul, Jeffrey Alwang, and R. David Lamie, 1998).
Farm Labor as an Economic Development Event
Specifying the Relationships
The typical way to conduct an economic impact study is to focus on the
contributions to the economy that result from an economic development
event. An alternative way is to estimate the cost to the local economy
from the elimination of such an event. Although this approach captures
a worse case scenario, it has been selected because it is useful in highlighting
the economic contributions of farmworkers. The approach permits analysis
of the different impacts associated with the different scenarios and changes
that could occur in the absence of the event.
The economic impacts from the loss of a migrant and seasonal farm labor
market in a local economy are felt throughout all its sectors. In the
case of the private sector, the absence of the MSFW population directly
influences the MSFW-dependent agricultural sector, the agricultural sector
with links to food manufacturing industries, in addition to several other
industries in the local economy. In Michigan agriculture, MSFWs perform
a variety of tasks associated with at least 46 different fruits, vegetables,
Christmas trees, and other floriculture crops grown across the state (Office
of Migrant Services, 1998). One immediate short-term impact from of the
disappearance of farmworkers would be a farm labor market shortage. In
such labor market conditions, the wages paid to farmworkers would have
to increase to induce entry of new workers into the farm labor market.
If high school students and other people not in the labor market are recruited
into the farm labor market, it is unlikely that wages would increase enough
to meet the demand for labor at current levels of agricultural production.
Over the long-term, the increased claims against farm income and the resultant
decrease in farm earning potential is a disincentive for growers to remain
in labor intensive agriculture.
Rather than substitute migrant labor with local labor, an alternative
option available to growers is to substitute migrant workers with mechanical
harvesters. However, this option is not viable either. Not only is mechanization
of agriculture less than complete, but also growers prefer workers to
machinery because farm wages continue to fall relative to the price of
machinery. If crops are harvested mechanically rather than by hand, the
return would be lower because of the ability to hand harvest crops multiple
times. In those cases where growers are able and willing to substitute
machinery for labor, machine manufacturers and service providers would
be substituted for labor as claimants against aggregate farm income. Even
if economically feasible, growers may not be willing to substitute machines
for migrant labor because the adaptation of machinery would lock growers
into particular crop production and marketing options over multiple growing
seasons (Martin and Martin, 1994). The negative effects on the environment
from the use of machinery would constitute a social cost to society.
In addition to the options of replacing migrant labor with local workers
or machinery, farm operators have the option to switch to alternative
agricultural production that is not labor-intensive. They also have the
option to sell or lease their farmland and leave agriculture altogether.
The option of switching to alternative agriculture could have serious
consequences on the earning potential of individual farm operators as
well as on the structure of agriculture. Under this scenario, the most
significant impact to growers would be the lost revenue from producing
less profitable crops. This decrease in earning potential could negatively
impact the overall operation of farms because in many instances labor-intensive
agriculture is the only profitable agriculture; it is used to subsidize
the rest of the farming operations (Trupo, Paul, Jefffrey Alwang, and
R. David Lamie, 1998). For agriculture, the loss of farmworkers would
undoubtedly lead to some farmland use changes into pasture and mechanized
field crop production. It would also mean less diverse farming operations
and, hence, higher risks for farm operators. A related potential impact
for farmers choosing to remain in agriculture despite the loss of MSFWs
is the negative effect on land prices. In the absence of MSFWs, the earning
potential of farm operators is assumed to decrease. As farm income decreases,
the future value associated with the productivity of the farmland would
also decrease. This decease in land prices could also affect local tax
revenues (Trupo, Paul, Jefffrey Alwang, and R. David Lamie, 1998).
Rather than remain in agriculture and produce less profitable crops,
evidence suggests that farm operators are more likely to get out of agriculture
and sell or lease their farmland. That is the case in Virginia, for example,
where 80% of farmworker employers surveyed reported they would retire
from farming and sell their farms rather than engage in alternative crop
or livestock production (Trupo, Paul, Jefffrey Alwang, and R. David Lamie,
1998).
The decision by farm operators to leave farming impacts agriculture in
avariety of ways, depending on whether the land is sold or leased to other
farm operators or sold to developers. Assuming farmland is sold or leased
to other farm operators, the impact would be fewer farmers, absentee farmland
ownership or farmland ownership consolidation, larger farms, and a less
diverse agricultural industry. If, on the other hand, growers sell their
land to developers, less farmland and fewer farmers and farms would result.
Thus the loss of the migrant and seasonal farm labor market could also
potentially impact the availability and ownership of farmland in addition
to the profitability, number, size, and diversity of farms in a local
area.
But the economic impacts from the loss of the migrant and seasonal labor
markets extend beyond the change in the economic performance of MSFW-dependent
farm operators and the resultant changes in the structure of agriculture
(e.g., the size of farms, number of farms, product diversity, rural land
ownership, and land use changes), in a local area. For example, sectors
with firms that sell inputs or value-added services to MSFW-dependent
agricultural producers will also be impacted if these producers choose
to sell their operations altogether or switch to less labor-intensive
crops or livestock production. The loss of this market to the local economy
is important in light of the fact that the costs of producing and marketing
labor-intensive agriculture are greater than the costs of producing, harvesting,
and selling traditional grain crops (Trupo, Paul, Jefffrey Alwang, and
R. David Lamie, 1998). Irrigation and grading and packing equipment, as
well as costs associated with migrant housing purchase, construction,
maintenance, and utilities, directly impact the local economy. Although
growers bear many of the higher costs associated with more profitable
labor-intensive agriculture, from the community perspective, these costs
represent an increased income flow to the local economy compared to income
flows to the local economy from traditional grain crops or livestock production.
Another industry impacted by the loss of the MSFW labor market is food
manufacturing. Food manufacturing is impacted in two ways because it relies
on the output of migrant dependent agriculture as well hires migrant labor
directly in its operations. Given some farmworkers are employed in the
processing sector, their absence could present labor shortages in that
sector and possibly higher wages for existing workers. Over the longer
term, the loss of the farm labor market would likely mean a loss in the
number of growers engaged in fruit and vegetable production as well as
a reduction in fruits and vegetable acreage. This, in turn, can cause
food processors difficulty in acquiring the necessary production volume
to achieve economies of scale in processing operations. If an insufficient
volume of local production is available, the processing sector may find
it too costly to continue operations.
Thus, in addition to the primary and multiplier impacts to the local economy
associated with the immediate loss of economic activity in the food processing
sector, local economies could see a reduction in processing, canning,
and freezing production altogether. The loss of the processing sector
that could result has implications for many other business operators in
a local economy, in addition to farm operators that rely on MSFWs. These
include farm operators that do not rely on MSFWs, but sell to the processing
sector, suppliers of other inputs to the food manufacturing industry,
and the local public sector that would incur a reduction in tax revenue
associated with the loss of economic activity in the food manufacturing
sector.
The impacts on agriculture and the food manufacturing industries will
vary depending on whether migrant dependent agricultural employers remain
in agriculture and switch to other crops or livestock production, or they
get out of agriculture all together and sell or lease their farmland.
But the agriculture and food processing sectors are not the only private
industry sectors impacted from the absence of MSFWs. Also impacted are
the retail and service providing sectors directly utilized by the MSFW
population. The benefits from farmworker expenditures extend to the grocery,
consumer goods, clothing, gasoline retailers, and other service sectors
of the local community. These farmworker household expenditures also produce
a fiscal impact associated with the tax revenue collected by the public
sector. This injection of spending will have further expansion effects
as local residents spend and respend their dollars. The loss of the MSFW
population would cause the direct and indirect effects from the spending
of farmworkers income in the local area to vanish.
The nonprofit and public sectors that service the migrant and seasonal
population will also be impacted by the loss of the migrant and seasonal
farm labor market. The general perception is that migrant farmworkers
are “strangers in the fields” at their temporary workplaces.
Their special needs and problems are not met by their employers or by
local assistance programs in the areas where they temporarily reside.
This explains why federal and state initiatives now exist to address the
needs of migrants. Since the 1960’s, the Departments of Education,
Health and Human Services, Labor, Agriculture, and other federal and
state
agencies have put in place various migrant labor programs to service
their needs. The various child care, health benefits, food stamps, job
training,
legal assistance, elementary, high school and college assistance, and
housing programs now available to migrants are typically operated by
private
nonprofit and public entities that receive transfer payments to provide
these services. In the case of nonprofit corporations, these transfer
payments help pay salaries, supplies, emergency assistance, medical care,
and food stamps. The also provide a variety of program and services to
benefit the migrant and seasonal farmworker community.
Reference has been made to the tax revenue reductions associated with
the loss of economic activity in the local economy. The public sector
also benefits from the direct administration of migrant farmworker programs
available to the migrant and seasonal farmworker population. Salary payments
and other expenditures associated with the administration of these programs
represent a direct infusion of funds to the various sectors of the local
economy. As in the case of private and nonprofit sector expenditures,
these transfer payments also will have a multiplier like impact on the
local economy.
The faith-based organizations, in particular, provide a variety of program
and services to benefit the migrant and seasonal farmworker community.
Over the years these nonprofit sector entities have devoted a fraction
of their budgets to providing services related to the presence of MSFWs.
In the absence of farmworkers in the region, however, these expenditures
would likely be diverted to other local needs.
Methods and Limitations
There are many types of community impacts associated with an economic
event, like the temporary use of migrant workers in agriculture. Demographic
impacts, for example, reflect changes in the size, location, and composition
of the population that can result from this development event. Fiscal
impacts result from changes in local government revenues due to expenditures
of the farmworkers and employers that impact the local tax base. Economic
or monetary impacts are associated with the changes in the level and distribution
of local employment, income, sales, and wealth. The presence of farmworkers
also has longer-term impacts on land use and farm structure, including
farm size, number of farms, and the diversity of agricultural production.
This study is largely limited to the economic or monetary impacts of the
farmworker population on the local economy of a 6-county region in southeastern
Michigan. Providing a detailed assessing of all the aforementioned effects
on the rural area from the presence of the migrant and seasonal agricultural
workers requires an extensive analysis of primary and secondary data and
a serious time and financial resource commitment. Such an endeavor is
beyond the scope of this paper.
Even when the multitude of potential changes in a community’s social,
demographic, environmental, land use, industrial diversity and concentration,
and fiscal dimensions are excluded from the analysis, estimating the
monetary
impacts of the MSFW population in rural areas remains a challenging task.
Chief among the reasons for the difficulty is the availability of even
the most basic information necessary. This problem is made even more
complicated
when a county or regional focus, rather than a state focus, is adopted
for analysis.
In estimating the economic loss to the local economy of southeastern Michigan
from the absence of farmworker population, the following monetary losses
will be analyzed: the loss in value of production from the forgone production
of MSFW–dependent crops; the decline in community revenue from the
loss of farmworker expenditures in the local economy; the loss in community
income from the decline in transfer payments to MSFWs, and the loss of
community income from the reduction in farmworker housing costs. The
direct impact on the economy from the expenditures of faith-based organizations
on the MSFW population was not factored into the analysis. Also not considered
in the analysis was the value of the foregone factor input costs associated
with labor-intensive agricultural production. The indirect forward linkages
associated with food manufacturing were also not factored in. Although
the impact of the absence of farmworkers in the area on the processing
sector is deemed important, it was difficult to identify the relationships
that exist between the agricultural production in a local area and its
linkages to the local processing sector. Also, no attempt was made to
measure the indirect and induced effects caused by additional rounds of
spending by directly and indirectly impacted firms and sectors in the
local economy. Although a variety of input-output programs are available
to estimate these indirect and induced effects, it is believed that these
models would only have a distorting effect on the calculations. The unique
consuming patterns of the MSFW population and the exporting nature of
agricultural production, which complicate its relationship with the processing
sectors, makes the use of these models hazardous to estimate these effects.
Given these complications, only the direct impact estimates are provided.
These are based on what is deemed reliable data based on surveys, interviews,
and the Agricultural Census.
Table 1 is a simplified model for conceptualizing the net monetary gain
to the community from the farm labor economic development event. The steps
undertaken in this study to quantify the economic contributions of the
MSFWs to the region, as well as the methods and data used in the analysis
are described as follows:
1. Private Sector Monetary Changes:
(a) Estimates were made of the total farm labor related expenditures by
growers used to maintain the farm labor population during their working
months. These expenditures mainly include direct housing and utilities
costs.
(b) farmworker earnings and the amount spent locally were estimated from
a farmworker survey conducted in the summer of 1997.
(c) Changes in cash receipts from high-value crop acreage were used to
estimate the value of lost production from the disappearance of MSFWs.
The dollar value of production from crops utilizing farm labor was compared
to the dollar value of production from the next best alternative crop,
assumed to be traditional grain crops. The crops utilizing MSFWs were
estimated using a survey conducted by the Office of Migrant Affairs in
cooperation with Michigan Statue University Extension. Estimates on the
dollar value of production were obtained from the Michigan Agricultural
Statistical Service.
(d) The number of migrant and seasonal farmworkers in the six county region,
their earnings, and how they spent their earnings were estimated. Data
on the number of MSFW was obtained from an interview with an agricultural
employment specialist from Michigan Works, a private placement company.
Nonprofit and Public Sector Monetary Changes
Nonprofit organizations servicing the MSFW population were identified
and transfer payments to this population were estimated. A survey of all
the agencies providing farmworker services was conducted to get estimates
on these expenditures. These were than divided between the public and
nonprofit sectors.
Even though a comprehensive analysis of all the impacts associated with
the presence of MSFWs in a receiving rural area is not provided, the monetary
impact analysis conducted is still useful. Identifying the impacts on
the private, public, and nonprofit sectors of the local economy will enable
community stakeholders and farmworker advocates and employers to point
to the contributions of the MSFW population. The findings represent one
type of information to help communities better understand the links between
migrant labor and the local economy. It will help dispel community concerns
that the MSFW population is a drain on the local economy. With an improved
understanding of the contribution so of the migrant population, the community
will be better poised to take steps to maximize the benefits to the local
economy from the presence of this population.
MSFW-Dependent Agriculture and MSFWs in
Southeastern Michigan
Nineteen twenty marks the arrival to southeastern Michigan of the first
Mexicans from south Texas to migrate to work in agriculture. The need
for Mexican labor is inextricably linked to the sugar beet companies that
started operations in the region at the turn of the century. Local workers
could not be relied upon to do backbreaking fieldwork, and farmers would
not even agree to plant sugar beets unless the refining mills could guarantee
an adequate supply of labor. Before 1920, sugar beet companies recruited
large numbers of Belgians, Hungarians, Moravians, and Bohemians from nearby
cities to work in beet fields. After 1920, the sugar beet companies found
it necessary to recruit from outside the immediate area of southeastern
Michigan and northern Ohio. They began recruiting “Mexicans”
from the Laredo area of south Texas, which they transported up by train
at the start of the season and returned at the end of the season by the
same means. By the 30’s some workers began coming in their own vehicles.
After the 1935 farm labor strikes in the region, “Texas Migrants” became
the main source of labor. Blissfield, in Lenawee County became the main
dumping point for Mexicans seeking agricultural work throughout
Michigan (Rosenbaum, 1996).
Today, MSFW-dependent agriculture in southeastern Michigan is no longer
just sugar-beet production; it’s quite diverse and demand for MSFWs
cuts across a large variety of field operations. Thirty-nine of the 46
labor-intensive crops grown in the state are grown in Michigan’s
southeastern region. As Table 2 below shows, MSFWs are rarely hired specifically
for field crops like sugar beets anymore. Workers predominate in the
planting
and harvesting of fruits and vegetables; field crop employment still
exists, but serves to fill unemployment gaps as employers attempt to
retain workers
until fruits and vegetables are ready for harvest. Increasingly, MSFWs
are being hired to work on floricultural and Christmas tree operations.
Table 2 provides the various field crop, vegetables, fruit, berry, and
floricultural MSFW-dependent commodities produced in each county in the
region. Monroe, with 32 different labor-intensive crops, registered the
most diverse labor-intensive production in the region. Washtenaw and Lenawee
followed with 28 and 26 labor-intensive crops, respectively. Jackson registered
only three labor-intensive commodities. All six counties relied on MSFWs
in some aspect of the hay harvest operation. Five of the counties were
MSFW-dependent in pumpkins, potatoes, apples, strawberries, soybeans,
nursery, and bedding plants. The number of labor-intensive commodities
averaged over 19 per county in the region.
As Table 2 shows, it is a mistake to think of MSFWs as only employed in
fruits and vegetables. Field crops, floriculture and nursery also are
migrant labor dependent. It is also a mistake to think that MSFWs are
only used in harvesting operations. Although the harvesting task is performed
in most crops, the majority of the crops rely on migrant labor for multiple
tasks. Asparagus was the only commodity where MSFWs were used solely in
harvesting operations. The large number of crops dependent on migrant
labor also contributed to the diverse number of tasks performed by migrant
labor in the region. Table 3 identifies the types of work performed by
MSFWs on a crop by crop basis for the agricultural commodities grown in
the region.
Not much information is available on MSFW-dependent agriculture in southeastern
Michigan beyond the information in Tables 2 and 3 from the Office of Migrant
Services for the State. To get a better picture of MSFW-dependent agriculture
in the region, Table 4 combines several data sources to estimate the number
of acres of MSFW-dependent agriculture and the value of production for
each county. Keep in mind that information was not available on all the
MSFW-dependent crops. In some instances data was withheld for some counties
to avoid disclosing data for individual farms. Nor was comparable data
on floriculture crops and Christmas tree production available. Because
of these limitations, information is recorded in Table 4
for only seven of 17, three of 11, 19 of 26, 17 of 32, and 10 of the
28 labor-intensive crops grown in Branch, Hillsdale, Lenawee, and Monroe
counties respectively. Note that Jackson County was excluded from Table
4 despite the presence of a migrant labor camp housing 25 farmworkers
and 10 seasonal workers residing elsewhere (see Table 5). The Census data
show that Jackson County produced such labor dependent crops as asparagus,
cantaloupes, squash, pumpkins, tomatoes, sweet corn, apples, watermelon,
and blueberries. It was excluded from this section of the analysis because
the Office of Migrant Services survey used to identify the labor-dependent
crops did not register any of the fruit and vegetable crops grown in the
county as dependent on MSFWs. Presumable the 35 workers registered for
Jackson County worked in hay, potatoes, or soybeans (Table 2). In the
case of potatoes, the Census withheld the data to avoid disclosure. Soybeans
and hay were excluded from the analysis in Table 4 because they were included
in the category of field crops that were not considered MSFW dependent
for purposes of this study.2
It was also assumed that all the farms growing the crops in Table 4 relied
on migrant and seasonal labor, which may not be the case if self-pick
or family only operations exist. Because the value of production figures
on a county by county basis were not available, state average value of
production figures for labor-intensive crops were multiplied by the crop
acreage in each county to estimate the total value of production for the
crops in each county in southeastern Michigan. All things considered,
given that all the labor-intensive crops in the floriculture sector and
most crops in field crop sector are excluded, it is believed that the
estimated total value of production for labor-intensive crops in southeastern
Michigan represents a lower limit of the total value of production involved.
The limitations of the information in Table 4 not withstanding, a number
of salient features about MSFW-dependent agriculture in the region are
nevertheless discernable. The data suggest a wide range in the significance
of MSFW dependent agriculture across the counties in the region. The counties
can be organized into three tiers in terms of labor-intensive agricultural
activity and its dependence on MSFWs. Lenawee and Monroe are at the high
end of MSFW dependence, followed by Washtenaw and Branch Counties in the
middle, and Hillsdale and Jackson at the low end. Lenawee Country ranked
first in acreage and total value of production from labor-intensive crops.
It accounted for 47% and 46% of the total acreage and value of production,
respectively. Monroe County ranked second with 26% and 36% of the total
acreage and value of production, respectively. These counties combined
for a total of 73% and 82% of the total acreage and value of production
in the region, respectively. Branch and Washtenaw County combined for
13% and 16% of the total average and value of production in the region
respectively. Hillsdale contributed around 1% of the acreage and 1% of
the region’s total value of production from
labor-intensive agriculture. Jackson County relied on MSFWs for only
three crops and data was not available on these crops to measure its contribution
to total acreage and value of production from labor-intensive agriculture
in the region.
The 3-tier classification of counties identified on the basis of their
contribution to acreage and value of production is supported by information
in Table 5 on where workers reside and where employers are located. The
migrant and seasonal farm workforce in southeastern Michigan in 1997 is
estimated at 1,257. Lenawee and Monroe Counties accounted for 67% and
74% of the workforce and farmworker employers, respectively. Branch and
Washtenaw Counties combined for nearly 29% and 16% of the workforce and
farmworker employers, respectfully. Jackson and Hillsdale accounted for
less than 4% of the workforce and 11% of the farmworker employers, respectively.
Table 5 also shows that the majority of the workers are in the migrant
stream; only 10% were considered seasonal workers. Given the predominantly
migrant character of the workforce, the overwhelming majority (83%) resided
in labor camps, most of which were located in these two counties (Table
6). The number of living units in each of the camps in the region also
supports the three county tier categorization of where labor-intensive
agricultural production is concentrated in the region (Table 7).
The migrant population is usually housed in labor camps although about
17% of the workers do not avail themselves of labor camp housing provided
by their employer and instead rent their own housing in the towns and
villages nearby the place of work (Table 6). Although growers are not
obligated by law to provide migrant housing, housing is an essential element
in securing an adequate supply of seasonal agricultural workers. Sometimes
there is a rental fee, but usually the employer absorbs the housing expense.
It is suspected that employers without labor camps relied on growers with
labor camps to house their workers, but the extent of this practice is
not known. Seasonal workers usually commute from their residence to the
place of work.
State and federal regulations ensure that migrant labor camps meet certain
minimum standards. When five or more migrant workers occupy a site, it
is required that the labor camp be inspected and licensed by the Michigan
Department of Agriculture. According to the Department, there were 38
licensed labor camps in the region. The number of labor camps housing
less than five workers is not known.
The licensed camps met minimal standards such as roofs free from leakage
and structurally sound, screened doors and windows, structurally sound
floors, electricity, water, etc. If a camp is found to have serious deficiencies,
the issuance of a license is not recommended. Marvin G. Johansen, Environmental
Manager for the Department in charge of inspections, estimates that growers
spend approximately $75 monthly in utilities and labor camp maintenance
per living unit during the period of occupancy (May, 2000), which averaged
5.5 months over the 6-county region. It is estimated that total housing
and utility expenditures in the region for the seasonal are at about $79,534
(Table 7).
The migrant and seasonal workforce in southeastern Michigan consists of
both workers in family units and stag workers (solo men). The 156 family
units accounted for 733 workers, or nearly 54% of the total workforce.
About 11% of these family-working units were seasonal; the rest were migrant.
Owing to the fact that an overwhelming number of families were in the
migrant stream, most (81%) lived in labor camps. As in the case of migrant
families, the overwhelming proportion (83%) of migrant stag workers resided
in labor camps.
The family unit composition of the workforce accounts for the difference
that exists between the size of the farmworker population and the farmworker
workforce in the area. The migrant and season population in southeastern
Michigan is larger then the migrant and seasonal workforce because not
all the family members are farmworkers. In an average size family unit
of 6.04 persons, only 47% worked. Another 38% the family members are of
non-workers below the age of 12 and the remaining 15% consists of non-working
adult members. When the non-working family members are added to the 446
stag workers and 811 family workers in the region, it is estimated that
the migrant and seasonal population in the region consists of 2,168 people
(Lenawee County Farmworker Survey, 1997).
Survey data for 1996 from Lenawee County farmworkers show differences
in income depending on whether the worker is a member of a migrant family,
a resident seasonal family, or if the migrant worker is stag. While migrant
workers earned an average income of $2,228, seasonal workers earned an
average of $5,057, and stag workers earned an average income of $2,000.
If these estimates are extended across the region, the 733 migrant family
workers earned a gross income of $1,633,124, the 134 resident seasonal
workers earned a total of $677,638 and the 390 solo migrant workers earned
an a combined income of $780,000. The combined total in income earned
from these three groups is estimated at $3,090,762 (Lenawee County Farmworker
Survey, 1997).
The survey data also show that not all farmworkers had the same propensity
to consume in Michigan and locally. Different expenditure patterns were
observed for each of the three groups of farmworkers. Migrant seasonal
farmworkers spent 47% of their income earned in the region in Michigan.
Eighty percent of that was spent locally. Resident seasonal farmworkers,
on the other hand, spent most of their earned (86%) in Michigan. Sixty-eight
percent of the income spent in Michigan was spent locally. By contrast,
stag workers spent just 30% of their income in Michigan. Most of those
expenditures (86%) were made locally. When the expenditures of the three
groups are aggregated at the state level they amount to $1,584,337, or
51% of earned wages. When aggregated at the local level, these expenditures
amount to $1,211,578, or 39% of total income earned.
Seven public and non-profit organizations were identified as providing
services to migrant and seasonal farmworkers in the region in 1997 (Table
6). These agencies administered at least $1,238,391 in revenue to service
the farm labor population. Over 72% of the funds were administered through
state departments although the funds represent federal as well as state
funds. These state agencies administered the Migrant Education, Food Stamps,
Day Care, Aid to Dependent Children, Family Medicaid, Migrant Hospitalization
programs, and other medical and emergency service programs. The remaining
nonprofit agencies administered approximately 28% of the revenue. These
agencies administered health, child care, and employment program services.
As can be seen, the variety of sectors impacted by the presence of farmworkers
is significant. In the case of the public sector operated programs, the
figures show only the cost of services provided. The figure would be larger
if administrative costs were factored into the analysis.
The proportional representation of family units and/or stag workers in
the farmworker workforce makes a significant difference in the amount
of income from transfer payments that flows into the region from federal
and state sources. Children specific programs, like the Migrant Education
Program, Telamon’s Migrant Head Start program or FIA’s Day
Care or Aid to Dependent Children, would be eliminated if the workforce
consisted of only stag workers.
When these programs are eliminated, the transfer payment flow into the
region is reduced by at over 66%.3
The reduction in the transfer payments flow is actually greater since
children also benefit from the other FIA programs that are not specific
to children. In addition, stag workers are less likely to use migrant
services compared to family workers for a variety of reasons. For one,
fewer may qualify since some of these programs require that the beneficiary
to be a legal resident and there is also a higher likelihood that the
proportion of undocumented workers is greater for stag workers that for
family workers. In addition, stag workers are younger on average, so they
are less likely to utilize health services.
Contributions of MSFWs in Southeastern Michigan
Measuring the economic contributions of the MSFW population to the local
economy of southeastern Michigan relies on the information from the previous
two sections. The straightforward discussion follows the model presented
in Table 1. The findings are then used to gauge the potential economic
impact on the local economy of the H-2A national policy initiative currently
being debated in congress.
It was indicated in Table 4 that MSFW-dependent agriculture in the 6-county
area of southeastern Michigan generated a production value of $27,649,878
from the use of 14,454 acres. This represents an average of $1,912.95
an acre. Assuming MSFWs are not available and growers remain in agriculture
and switch to growing traditional field crops, which earned an average
value of production in Michigan of $281 per acre, the production value
from this acreage would have been $4,061,574. Thus the use of farm labor
would have contributed an extra $23,588,304 (Table 10). Lenawee and Monroe
accounted for over 82% of the increased value of production.
The proportion of wages earned over the season that are spent locally
can be used to estimate changes in business sales in the region. In the
previous section it was demonstrated that farmworker expenditures contributed
$1,211,577 to the local business community. But employment compensation
needs to first be subtracted from value added to avoid double counting
the income contributions to the local economy. This is because almost
all farmworkers are employed rather than contracted.4
When the earned income ($3,090,762) is subtracted from the added value
of production from MSFW-dependent agriculture in the region, value added
is $20,497,542. With this adjustment the contribution to the private sector
from increases in value added and farmworker expenditures amounts to $21,709,119.
Housing maintenance and utilities are expenses associated with MSFW-dependent
agriculture that are factored in when estimating value added. Because
these expenses are deducted from cash receipts to estimate value added,
and since these costs are not expenses associated with traditional field
crop production, they represent an addition contribution to the local
economy despite being an expense to agricultural employers. In 1997, these
expenditures amounted to $79,534.
When these expenditures are combined with the income to the growers and
the business community, the total private sector impact from MSFW dependent
agriculture is estimated at $21,788,653. It is worth pointing out that
94% of the contribution is accrues to agricultural employers. An additional
5.5% is accrued by the business community, primarily the retail sector.
Although relatively speaking, business expenses are a small amount, for
particular individual firms near the labor camps and the surrounding area,
the amount of business income generated from farmworker customers can
be substantial.
An additional source of income, to the private sector actually comes from
state and federal transfer payments that are administered through the
public and non-profit sectors in the region. The service sector, especially
the health, education, and child care industries are major beneficiaries
of the estimated $1,238,391 in transfer payments that annual flow into
the region. It was not possible to estimate for this study how this revenue
was divided between employee compensation expenses that accrued to the
public and private sectors, and service expenses that accrued to the private
sector.
Based on our calculations of direct effects, the farmworker population
contributed to a net monetary gain of $23,399,804 to the state economy,
of which $23,027,044 was spent on the regional economy of southeastern
Michigan (Table 11). These estimates are considered conservative because
they exclude the majority of the field crops that rely on MSFW for hoeing
and weeding, and all the floriculture and nursery commodities. Even so,
given 1,257 farmworkers were employed in the region, the contribution
per farmworker to the local economy is estimated at over $18,000.
As was anticipated, the injection of income into the local economy from
stag labor is less than that of family workers. They not only spend less
of their earning, but they also receive less income from federal and state
income. Agricultural employers could potentially pay less in housing because
less housing would be needed for the same amount of workers.
The state’s agricultural employers have a long tradition of relying
on domestic family units to meet their labor needs. Another deterrent
is that the cost of using H-2A rather than domestic labor is considered
more costly because of the transportation and income and employment guarantees
employers have to provide to these workers. But the interest in foreign
workers is growing and the H-2A program is slowly beginning to take hold
in Michigan. Although data is not available to make quantitative estimates
of their impact, it is reasonable to conclude that their net positive
impact on the local economy would be less than that of domestic workers.
In addition to injecting less money into the local economy because of
their lower propensity to consume locally and their lower need for services,
they would also constitute a larger leakage because of the higher costs
agricultural employers would have to incur for their services.
Conclusion
This chapter has demonstrated that the farmworker population represents
a significant economic development event to the region and the state.
Labor-intensive agriculture represents a net benefit to both the producers
and the community. The monetary impact of the farmworker population would
be greater if the current migrant stag workers were replaced with migrant
and seasonal family working units. The use of legal foreign workers through
the H-2A program or some other program would reduce the positive impact
of this event to the community.
Communities should consider taking positive steps to maximize the benefits
to the local economy from the presence of the MSFW population. A diverse
and large number of community interests seem to benefit from the presence
of the farmworker population. These stakeholders should be made aware
of the impact the farm labor population on their industries. Issues related
to the farmworkers should not be left to just economic or equity value
advocates. Consideration should be given to regional and community income
as well as farm income when making arguments on behalf of the farmworkers.
Improving community attitudes towards the MSFW population should also
be an integral part of any strategy to maximize the positive economic
impact that the farmworker population has on the local economy.
References
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of Migrant Labor on Waushara County Economy,” Beloit College.
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Endnotes
1 Although a broad
array of policy proposal were offered and reviewed at the 1980 national
conference on seasonal
agricultural labor markets in the United States, Emerson emphasized the
importance of considering farmworker policy within the broader spectrum
of poverty, regardless of the occupation. This view of the farm labor
problem recognized the dynamic nature of the labor markets. According
to Emerson, viewing farmworker policy within this border spectrum of
poverty
was important because, “a focus solely in the context of the existing
farm labor market tends to point one in the direction of maintaining current
participants within the market rather than considering the overall welfare
within the economy.... “ (p.504). Within this broader perspective,
income maintenance programs were thought to offer considerable appeal
over various programs that targeted specific occupational groups (Emerson,
Robert D., “Summary” in Seasonal Agricultural Labor Markets
in the United States, (1984) Emerson, Robert D., editor, pp.482-523).
Clearly, the sentiment at the time was to give attention to moving workers
out of farm labor. Aiding the transition of displaced and current farmworkers
out of the unskilled labor pool into more remunerative and stable employment
remains a preferred policy approach. It can be contrasted with the approach
to protecting and aiding those remaining in agriculture through legislation,
regulation, and direct services.
2 The large acreage associated with these crops would
have distorted the acreage figures for the more labor-dependent crops
in the table. The weeding and hoeing and the baling and moving hay tasks
performed by MSFWs on these crops respectively, although sequentially
essential to the production process of these commodities, represent a
relatively minor addition to the value of production of these crops.
3 FIA’s expenditure on its Day Care program in
Lenawee and Monroe County alone totaled $283,700. Figures for its Aid
to Dependent Children program were not available.
4 In estimating value added to the U.S. economy the Economic
Research Service subtracts contract labor but not hired labor expenses
from farm cash receipts. (Michigan Department of Agriculture, p.8).
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