Farmers in U.S., Mexico & Central America must compete for shrinking agricultural labor workforce

Agriculture is unlike most other key sectors of the North American economy in that its comparative advantage has rested on having access to abundant labor willing to do the work instead of on the accumulation of education and formal credentials. Agricultural labor trends are evolving, however, raising labor supply questions for the United States, Mexico and Central America.

For example, Mexico, which is still the largest supplier of hired labor to U.S. farms, is in the transitional phase of being both farm labor exporter and importer, increasingly relying on workers from Guatemala as its own agricultural workforce shrinks. And with the production of labor-intensive crops expanding in Mexico and the Northern Triangle (El Salvador, Guatemala and Honduras) as agricultural jobs become less attractive throughout the region, there could be a growing tension between labor supply and demand.

In Ripe with Change: Evolving Farm Labor Markets in the United States, Mexico, and Central America, economists Philip Martin and J. Edward Taylor of the University of California, Davis examine the region’s farm labor market dynamics. The report focuses on changes in the volume and composition of production, the supermarket revolution in Latin America, as well as on trends in training and education, and their implications for workers and migration. (The Spanish-language report brief can be found here.)

While the share of the total workforce employed in agriculture is high in Mexico and Central America relative to the United States, it is falling fast. Across Mexico and Central America, educational attainment is increasing and incomes are rising — though these advances and demographic trends are evolving at different speeds in each country, the report finds. Mexico and El Salvador are seeing their populations age and total population growth slowdown. In contrast, birth rates remain high in Guatemala and Honduras.

“There is evidence that the supply of farm labor in the region is decreasing and that, in the future, farmers throughout the region will find themselves competing for a dwindling number of local farm workers,” Martin and Taylor write.

Source: Migration Policy Institute, Farmers in U.S., Mexico & Central America May Increasingly Have to Compete for Shrinking Agricultural Labor Workforce amid Evolving Regional Dynamics, MPI Report Finds, February 6, 2013.