Tags: Rising | wages | workers | farms

WSJ: Rising Wages Aren't Enough to Bring Workers to Farms

WSJ: Rising Wages Aren't Enough to Bring Workers to Farms
(Dollar Photo Club)

By    |   Friday, 14 August 2015 07:02 AM

A shortage of workers is depressing farm output, but even offers of major wage increases aren't enough to attract job seekers to U.S. farms.

Fruit and vegetable output is falling 9.5 percent, or $3.1 billion a year, thanks to the shrinking agricultural work force, according to the Partnership for a New American Economy, a non-partisan group that backs a more open immigration policy.

The U.S. economic recovery—growth has averaged about 2.2 percent annually since the Great Recession ended in 2009—allows workers to find less strenuous employment, often in places where housing is cheaper, writes Wall Street Journal reporter Ilan Brat.

"In an industry notorious for poor working conditions, farm companies are wooing employees by raising wages faster than inflation and enhancing medical and other benefits," Brat states. "Even so, many farms say these efforts have failed to meaningfully address their worker shortfalls."

For example, wages of $17 an hour aren't enough to bring in adequate help, Alex Teague of Limoneira, the biggest U.S. lemon producer, tells The Journal.

In an illustration of the opportunities for workers outside agriculture, non-farm payrolls rose 215,000 in July, with the unemployment rate at a seven-year low of 5.3 percent.

Meanwhile, whatever the decline in U.S. agricultural output, commodities indices hit 13-year lows last week. So now must be time to exit the asset class with both feet running, right?

Quite the contrary, says Barron's columnist Andrew Bary. "It’s time to consider commodities," he writes.

"While the Standard & Poor’s 500, Nasdaq Composite, and other key equity indexes are near record levels, commodity stocks, including energy shares, are way below their peaks. Commodities are probably the most out-of-favor industry group in the stock market."

That's cat nip for value investors.

Indeed, "the commodities space represents great value versus the rest of the market,” Roland Morris, a commodity strategist and portfolio manager at Van Eck Global, tells Barron's. "There has been no place to hide--gold, industrial metals, and energy have all been weak."

Gold has dropped to a five-year low, trading at $1,114.60 an ounce Thursday, and oil has slid to a six-year low, with U.S. crude trading at $42.16 a barrel.

Meanwhile, the S&P 500 index stood at 2,083, less than 3 percent beneath its record high.

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A shortage of workers is depressing farm output, but even offers of major wage increases aren't enough to attract job seekers to U.S. farms.
Rising, wages, workers, farms
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2015-02-14
Friday, 14 August 2015 07:02 AM
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