Where's the farm labor?Where's the farm labor?

Do you remember the great Wendy’s commercial a few decades ago featuring an elderly lady asking, “Where’s the beef?” All across the United States, help wanted signs are numerous leaving employers wondering, “Where’s the labor?”

One of my good friends, Doug Johnson of Moody's Analytics, goes one step further. He believes it is not about a labor shortage, but a work ethic and productive labor shortage. A major question presented during a recent Federal Reserve webcast was, “What have we learned about labor markets and labor supply that was not obvious before the pandemic?”

First, stimulus checks and extended unemployment benefits are effective in creating labor shortages. Generous checks and benefits resulted in labor shortages, which were exacerbated by safety concerns as the coronavirus quickly spread. Larger companies quickly raised wages to attract and retain workers. However, many small businesses, including farms and ranches, were constrained in their ability to increase wages which has resulted in closure and consolidation.

Next, many businesses and industries are very dependent on foreign labor. Issues at the border have accelerated labor shortages for these companies. The agriculture industry is very dependent on these individuals who are needed in a timely manner during planting and harvesting.

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Another factor that was occurring before the pandemic, but was accelerated by the pandemic, was working remotely and the migration from high-cost urban areas to lower cost rural areas. More of your next-door neighbors may be individuals who cashed out in other areas of the country and moved to your location. Flush with equity and sometimes cash, this has resulted in appreciating housing and land values in rural areas.

The labor shortage will accelerate the movement to replace labor with automation. John Deere just unveiled a tractor with a remote operator. Your local processing plants, Walmart, and other large firms have strategies on the drawing board to replace labor with automation.

Finally, many farmers have commented that their most dependable workers are baby boomers. However, this demographic has limited knowledge of new technologies which can present a steep learning curve. Some employers have mentioned that they have hired younger employees to teach the senior generation of workers how to utilize new technology effectively.

The question for the future is not, “Where’s the labor?” but, “Where’s the productive, dependable workforce?” The new workforce will have to be digitally literate, able to critically think about data and information, and must be able to communicate effectively.

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The pandemic accelerated labor supply issues and increased demand for qualified workers. It appears that these issues may be with us for at least a decade. Any other black swan event like the COVID-19 pandemic could upset the supply and demand balance of labor in the future.

Source: David Kohl, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.