LABOR POLICY AND THE OVER-ALL ECONOMY



merce and government and construction with a reservoir of labor in
more—and perhaps better—ways than the historic migration to the
big cities.

You are far better qualified than I to interpret these trends in farm
labor. The rapid rate of increase in agricultural productivity is, how-
ever, a fundamental factor in the decline of agricultural employment.
It is obvious that due to the use of machinery, chemicals, and scientific
farming methods, fewer and fewer people are needed to produce food
and fiber for our ever growing population, and fewer are hired.

FARMERS FIND INDUSTRIAL WAGES ATTRACTIVE

Another factor is the pull of higher cash wages in industrial occu-
pations. That wage differential is very substantial, notwithstanding the
fact that farm wages have more than tripled since the early years of
World War II, outstripping relatively (but by no means absolutely) the
rate of increase in industrial wages.

On the average in 1956 farm cash wages were only a little over
one-third of factory cash wages. These figures—about 70 cents'an hour
for farm labor and $2 an hour for factory labor—include neither
perquisites for farm labor nor “fringe benefits” for factory labor.
Fringe benefits were estimated by the Chamber of Commerce at as
much as 20 percent of total wages in 1955 for a representative group
of nonagricultural firms. Still another factor, of course, is shorter hours
of work in industry.

We all recognize the tremendous variation in wages and in condi-
tions of employment in the several agricultural areas of the country,
and we know that these generalizations are certainly not universally
applicable. But, in general, the high wage agricultural areas, such as
California and the Central West, are also high wage industrial areas.

Notwithstanding the reduced total demand for farm labor, my
understanding is that it is currently difficult to secure and to retain
year-round farm workers who have sufficient skill for modern farm
methods. In view of the industrial competition for labor with the types
of mechanical skill which many farm workers have, these shortages
likely will persist, forcing the farm wage level gradually into a some-
what more competitive relationship with nonagricultural wages—or
increasing the number of farmers or members of farm families with
a second nonagricultural job.

FOREIGN WORKERS GIVE FLEXIBILITY

Farm labor supply currently differs in one important respect from
the industrial labor supply. This is in the use of foreign contract

39



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