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How
the Food Processing Industry is
by Katherine
Fennelly and Helga Leitner Working
Paper No. 59 About the Authors: Katherine Fennelly Katherine Fennelly is a professor at the Hubert H. Humphrey Institute of Public Affairs of the University of Minnesota. Her research and outreach interests include leadership in the public sector, the human rights of immigrants and refugees in the United States, and the preparedness of communities and public institutions to adapt to demographic changes. Dr. Fennelly has been Dean of the University of Minnesota Extension Service, a faculty member and department head at the Pennsylvania State University, and a faculty member at Columbia University School of Public Health. She is bilingual in Spanish and English and has worked and traveled extensively throughout Latin America. Dr. Fennelly has served as a consultant to scores of organizations, ranging from the Kellogg Foundation to the Ministry of Health of Chile. She holds a certificate of studies from the University of Madrid, a master’s of philosophy, a master’s of health education and a doctorate in adult education from Columbia University. Helga Leitner Helga Leitner received her Ph.D. in Geography and Urban and Regional Planning from the University of Vienna, Austria. She is currently Professor of Geography at the University of Minnesota, and has held visiting lectureships at the University College, London, the University of Vienna, Munich and the University of Indonesia, Jakarta. She has published a book and numerous articles on immigrant incorporation into European cities, the politics of immigration and citizenship, as well as on issues of urban and regional development and sustainability in Europe and the US. Her current research with Katherine Fennelly investigates immigrant-host society relations and the immigrant experience in small town America. Abstract In
this paper we argue that the diversification of rural Minnesota is
largely the result of the restructuring of the food processing
industry, and the subsequent
recruitment of low wage laborers. We begin with a brief discussion
of demographic changes in the state as a whole, and in rural Minnesota.
This is followed
by an analysis of the relationship between the location of food
processing industries
and the diversity of the population, using different measures of diversity.
We conclude with a discussion of the benefits and challenges
that “new diversity” poses
for rural communities.About the Authors: Suggested Citation Fennelly, Katherine (Ph.D.) and Helga Leitner (Ph.D.). “How the Food Processing Industry is Diversifying Rural Minnesota,” JSRI Working Paper #59, The Julian Samora Research Institute, Michigan State University, East Lansing, Michigan, 2002. How
the Food Processing Industry is Introduction Minnesota has often been characterized as a largely “white” state, with little diversity, populated by persons of European ancestry-an image that is not wholly undeserved. Data from the 2000 census confirm that the vast majority of Minnesotans are White, non-Hispanics (89%) and that 86% of Minnesota residents claim European ancestry.1 During the past decade, however, Minnesota has experienced a rapid increase in foreign-born residents of largely non-European ancestry that has received much attention in the print and broadcast media. The new immigrants from Asia, Africa and Latin America have been presented as creating Minnesota’s “new diversity.” The St. Paul Pioneer Press, for example, ran a 12-part series called “The New Faces of Minnesota” in the fall and winter of 2000. Such discourse generally focuses on the characteristics of new immigrants, without examining the underlying geographic and economic forces that lead immigrants to settle in particular parts of the state. In this paper we argue that the diversification of rural Minnesota is largely the result of the restructuring of the food processing industry, and the subsequent recruitment of low wage laborers. We begin with a brief discussion of demographic changes in the state, as a whole, and in rural Minnesota. This is followed by an analysis of the relationship between the location of food processing industries and the diversity of the population, using different measures of diversity. We conclude with a discussion of the benefits and challenges that “new diversity” poses for rural communities. Demographic Changes in Minnesota The rate of increase in numbers of immigrants coming to Minnesota since 1990 has been dramatic, and there has been a related increase in the percentage of persons of color in the state. Between 1990 and 2000, the Black and Asian populations approximately doubled, and the Latino population grew by 166% — the fastest rate of increase in the Midwest (McConnell, 2001). The majority of Latinos in the state are Mexicans and Mexican-Americans, although increasing numbers of Central Americans have come to Minnesota seeking jobs in recent years. Most Latinos enter the U.S. as immigrants; a smaller, but unknown percentage enter the country without visas. The Mexican-origin population includes a mix of U.S. citizens and permanent residents (including long term residents of Minnesota) and Mexicans from both sides of the Texas-Mexico border. The latter group can be further subdivided into individuals who come to Minnesota for seasonal work in agriculture, and those who have settled here.2 Rural Latinos lag behind rural Whites and urban minorities on many economic indicators.3 Minnesota is among the top 10 states in numbers of refugees; since 1989 the percentage of immigrants who are refugees has ranged from 14-44% in Minnesota, as compared with 6-16% in the U.S. as a whole.4 This means that the origin of foreign-born Minnesotans is strongly influenced by areas of the world from which refugees are fleeing. As a consequence, Minnesota has been the primary or secondary site of relocation of large numbers of refugees from Asia, the successor states of the former Soviet Union and from countries of Africa. Asians were the first refugees to arrive in Minnesota in significant numbers. In the mid-1970’s, after the U.S. withdrawal from Indochina, large numbers of Hmong, Vietnamese and Laotians came to the United States, and several thousand were resettled in Minnesota. Thousands of Cambodians were also displaced by the Indochinese war and by political turmoil and famine under the Khmer Rouge regime. In 2000, there were close to 42,000 Hmong in Minnesota, about 18,500 Vietnamese, and between 5,500 and 6,500 Cambodians (U.S. Bureau of the Census, 2002). African refugees are more recent arrivals to Minnesota. Thousands of East Africans have fled to other parts of Africa, Europe and North America as the result of civil wars and famine in Somalia, Eritrea and Ethiopia. Between 1992 and 1999, 29,000 Somali refugees arrived in the United States (U.S. Bureau of the Census, 2002) and the largest number moved to Minnesota. More recent refugee arrivals to Minnesota have fled conflicts in Sierra Leone, Zaire and the Sudan; in the latter country several hundred predominantly Christian refugees from the south have been settled in Minnesota after fleeing conflicts with the Moslem-backed government in northern Sudan (Holtzman, 2000). The vast majority of immigrants and refugees in Minnesota settle in the Twin Cities metropolitan area. However, particularly during the past 15 years, increasing numbers of immigrants and refugees have moved to small towns and cities. This dispersal of immigrants into rural Minnesota has been closely associated with the changing geography of food processing. The relocation and expansion of food processing plants into rural areas in Minnesota, and the Upper Midwest more generally, creates a demand for low wage labor that cannot be met locally.5 Food processing businesses attract Latinos, Asians and Africans seeking jobs that do not require high level skills or English language proficiency. In the south-central region of the state, as many as a third of the employees in food processing plants are estimated to be Latino (Bushway, 2001). Ads and informal information networks describing the availability of steady jobs on evisceration, processing and packaging lines at $8-$12 per hour attract these workers to rural communities. Others are recruited by company recruiters or labor contractors6, or through employees who receive recruitment bonuses. Rural Transformations Since the 1950’s — and particularly during the farm crisis of the 1980’s — population losses have plagued many rural Minnesota communities (Amato and Amato, 2000). One 1995 demographic study projected a 50,000-population loss in rural agricultural communities by the year 2025. With the demise of small farms and an exodus of young people from rural areas came the loss of retail services, and an increase in the size of an aging population in need of costly health and social services (Gale, 2000). As a result, rural communities were left at a distinct disadvantage compared to urban and suburban areas. Fonkert (2001) compared rural and metro counties between 1987 and 1997, and found that the mean per capita income in rural communities ($20,569) was $9,000 less than that of metro communities. These changes have coincided with a restructuring of farming and the livestock industry, characterized by dramatic increases in the scale of production, heightened concentration of market power among relatively few companies, and increased vertical integration (Flora et al., 1999).7 Meat processing industries rely increasingly on contracts with local farmers to supply them with young hatchlings, piglets or calves, and with corn and soybeans for feed (USDA, 2000). The availability of these commodities is one reason for the widespread relocation of packing plants from urban to rural areas in the Midwest, and for their expansion (Broadway, 2000). Other reasons include lower wages in remote areas, less union activity (Drabenstott, 2000; Krissman, 2000) and lower transportation costs since animals are slaughtered, deboned, processed and packaged in one facility (Flora et al., 1999; Broadway, 2000). Meat and poultry processing has grown to be a multi-billion dollar business in Minnesota, employing thousands of people in rural plants scattered across the state, with concentrations in the south-central region. In 1996, the meat industry in Minnesota employed 14,746 workers. Employment in that sector rose 32.3% in the state between 1988 and 1996, compared to only 21% in the U.S. during the same period (Reirner, 2000). Table 1 lists food processing plants in rural Minnesota that employ at least 100 employees.
Local officials in some communities view the processing of agricultural products as a means of generating employment and sustaining population numbers. To attract meat and poultry processing businesses they offer tax incentives and relax environmental regulations (Broadway, 2000). Krissman (2000) describes the international labor recruitment efforts that companies employ to maintain a steady flow of low wage workers. He notes that poverty in the country of origin is an inadequate explanation for large scale migration of undocumented workers, and describes international networks that provide labor intensive industries with a continuous flow of immigrant workers. U.S. and foreign-born Latinos from Mexico and Central America, Asians from Vietnam, Cambodia and Laos, and Africans from Somalia and Sudan, comprise the majority of new workers in these plants, and their arrival has slowed — and in some cases reversed — the population loss in rural food processing communities. In 1997, the Minnesota State Planning Agency conducted case studies of 12 “turn around counties” — counties that had lost population in the 1980’s, but gained population between 1990 and 1995. One of the factors they listed as contributing to the population growth was the “in-migration of immigrants and Latinos in counties with meat packing and food packing industries.” (Minnesota Planning, 1997). Measures of Diversity in Communities with Food Processing Businesses In order to examine the relationship between the location of large food processing plants in rural9 Minnesota we mapped the location of large food processing businesses10 and the percentage of school children living in homes where English is not the primary language (see Fig. 1).11 Each circle on the map represents the area within 20 miles12 of a large food processing plant.13 The labels are the names of 16 cities or towns in which the plants are located (the plant names in each location are shown in Table 1). The geographic units on the map are school districts, shaded according to the percentages of children in K-12 schools in the district who live in homes where English is not the primary language. The highest percentages of non-English speaking families are in the patterned districts (10-38%), followed by the solid gray-shaded districts (6-9.99%), and white (0-5.99%). Although the correlation is not perfect, there is clearly a strong relationship between the location of food processing plants and foreign languages spoken in the homes. The greatest concentrations of non-English language households are found in Worthington, Butterfield, St. James, Madelia and Faribault — sites of major pork, poultry and vegetable processing plants, such as Swift & Co., Monfort Park Inc., Campbell Soup, Butterfield Foods, Tony Downs Food, Jennie-O and Faribault Foods (see Table 1). Another proximate measure of diversity is minority enrollment in public schools. Unfortunately, measures of race/ethnicity reported by school districts do not distinguish between immigrants and non-immigrants. Africans and African-Americans, Asians and Asian Americans, Latinos and U.S.-born Chicano/Latinos are categorized as “Blacks” “Asians” and “Hispanics,” respectively, and all three categories combined are reported as “minorities.”14 However, in rural Minnesota communities with few U.S.-born minorities, race/ethnicity is a reasonably good proxy for concentrations of new immigrants.15 Table 2 shows the percentages of minority students enrolled in kindergarten and in K-12 classes in rural school districts16 near food processing plants in the school year 2000-2001. In that year K-12 minority enrollment in these districts ranged from 5% in Windom to 35% in Worthington. Five of these districts near food processing plants had one-fifth or more minority students.
The percentage of minority students currently enrolled in kindergarten classes is a measure of diversity that can be used to make rough estimates of future trends.17 In the school year 2000-2001, 11 of the 16 rural districts surrounding large food processing plants in Minnesota had kindergarten classes with a fifth or more minority students, and four (Worthington, Madelia, St. James and Butterfield City) had a third or more (see Table 2). The city of Worthington, in the 1990-91 school year for example, had only 8% minority children (primarily Latino). Ten years later the percentage was 35% in K-12 classes and 51% in the kindergarten class. Table 3 shows percentage changes and numerical increases or decreases in enrollment for total K-12 students and for minority students over the same 10-year period. Ten of the 16 districts experienced increases in minority enrollment of over 100% between 1991 and 2000, at a time when a number of these districts had net losses of population and school enrollment. While the median increase in minority enrollment for the decade was 187%, in some districts, such as Willmar, Owatonna and Faribault, minority enrollment rose over 500 students each. The numerical increase in minority students has compensated for the majority enrollment decline in many of these districts. As Table 3 and Fig. 2 show, overall K-12 enrollment figures would have declined dramatically in 12 of the 16 districts were it not for the absolute increase in minority students.
Discussion and Conclusions Food processing is one of the fastest growing industries in the U.S. There are over 26,000 food processing plants in the U.S., employing 1.5 million workers. The explosive growth of the industry creates a demand for low-wage workers that cannot be met with U.S.-born employees. Much of the success of food processing plants is part of a larger phenomenon described by Allensworth and Rochin (1998) as ‘peripheralization of the core,’ in which employment becomes increasingly deskilled, with lower wages and less desireable working conditions. “The processes of restructuring and immigration reinforce each other — restructuring of industry creates demand for low-wage workers, while the availability of low-wage workers allows for continuing industrial restructuring.” In rural Minnesota, communities with large food processing plants, these processes have helped turn around population losses and school enrollment decline, while significantly diversifying their ethnic and racial make-up. Long-term fiscal impacts attributable to an influx of immigrants are complex and difficult to measure. In rigorous research sponsored by the National Research Council (Smith and Edmonston, 1997) found that most studies overstate the negative fiscal impacts of immigration on communities because “they generally include U.S.-born children of immigrants while they are of school age (and hence costly), while excluding them at later ages when they are in the labor force and contributing to the economy” (p.9) The authors conclude that “combining the costs of all programs, there is little difference between immigrants and the native born” (p.11). In Minnesota, Kielkopf (2000) used 1998 EEOC survey data of private sector firms with over 100 employees for a regional input-output analysis of the economic impact of Latino workers in south central Minnesota — the region of the state with the most food processing plants. He estimated that through direct, indirect and induced18 effects the Latino workforce contributed $484 million annually to the regional economy — almost 10% of total economic growth. Kielkopf also estimated that Latino workforce led to an increase of $45 million in state and local tax revenues and $76 million in federal tax revenues, almost double the expenditures for additional services for the Latino population at the local, state and federal levels. In this paper we have demonstrated that there is a strong correlation between the location of food processing plants and increases in minority and non-English-speaking residents in rural Minnesota. Because school funding formulas in most states are based upon average daily enrollment (American Association of School Administrators, 2000), new immigrants and their families have helped to stem or slow down school budget declines in many communities. In Minnesota, the median per pupil revenue is $7,975 (Korkins, 2001). In addition, school districts receive one FTE teacher per 40 Limited English Proficiency (LEP) students, and LEP students are weighted an additional 0.15 in the school funding formula (Thompson and Silvernail, 2000). Geller (2001) has calculated that the increase in Latino pupils alone in school districts in south central Minnesota added $8 million to school districts budgets. In spite of the economic benefits of increased school enrollments and working adults, analysts also generally acknowledge the challenges faced by rural communities with large numbers of new immigrants. Ironically, although the federal government benefits most from taxes paid by immigrants, it has devolved many of the costs of basic services to states, counties and municipalities, thus placing a disproportionate burden on localities experiencing rapid immigration. Providing sufficient decent and affordable housing to the new immigrants constitutes a major challenge for receiving towns. Minnesota had one of the lowest rental vacancy rates in the United States in 1999 (Office of the Legislative Auditor, 2001). In a policy brief on affordable housing, the Children, Youth and Family Consortium (2001) calculated that a family needs an income of $24,000-$25,000 per year to afford the average apartment rental cost of $600 in Minnesota. Entry-level food processing jobs typically pay less than this and the lack of safe, affordable housing in rural communities is frequently cited as a problem of crisis proportions. The result is overcrowded rental units and a proliferation of trailer parks. The lack of alternatives also leads to exploitation of immigrants by some unscrupulous landlords. When immigrants move to rural communities they not only need housing and social services, but also what Chavez (1992) has referred to as “links of incorporation… secure employment, family formation, the establishment of credit, capital accumulation, competency in English and legal status” (p.5). If these links remain out of the reach of workers in low-wage jobs, the result will be a marginalized population and increasing frictions between new and long-term residents. Indeed, studies of immigrant-host relations in food-processing towns, such as Garden City, Kan. by Broadway (2000), and our own research in a food processing town in rural Minnesota, suggest that rapid immigration of poor and culturally distinct workers and their families creates tensions. Many established residents resent the influx of new immigrants (Leitner and Fennelly, 2002). In her research on the incorporation of immigrants into the receiving communities, Lamphere asks whether new immigrants are “being incorporated into local economies, gaining access to higher paying jobs and acquiring skills, or… facing discrimination and finding themselves trapped in low-wage unstable employment.” Since most of the immigrants to rural Minnesota are relatively new, it is too early to know what opportunities they will have for upward mobility. However, the concentration of immigrant workers in low-skilled, low-paying jobs, the absence of unions and the high turnover rates in food processing plants provide few grounds for optimism. Indeed, restructuring of the food processing industry, including de-unionization, plant closures and relocations and corresponding losses of jobs and income, has profound consequences not only for the new immigrants, but also more generally for rural communities highly dependent on this industry. If population diversity is to bring new vibrancy and revitalization to rural communities, local authorities and businesses need to work together to develop comprehensive plans that promote economic development and “links of incorporation” for all residents. References Allensworth,
Elaine and Refugio Rochin. 1998. “Ethnic Transformation
in Rural california: Looking Beyond the Immigrant Farmworker.” Rural
Sociology 63, no. 1:26-50. Endnotes 1 First ancestry is reported in the 2000 Census Supplemental
Survey (U.S. Census Bureau, 2001). The percentage of European/Canadian
ancestry
was calculated by the author with a denominator which excluded individuals
who mentioned “U.S. or American” ancestry, or whose ancestry
could not be classified.
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