The name is absent

The key point is that displacement of labor with
a labor-saving technology in a given industry would
only decrease labor’s relative share in that industry if
elasticity of substitution is greater than one. This is
precisely what Lianos [11] found to be the case for
the U.S. agricultural sector in the aggregate since
World War II.

Ferguson and Moroney [4], however, found that
despite adoption of labor-saving technology in most
industries in the U.S. manufacturing sector, capital
deepening accompanied by an elasticity of factor
substitution less than one resulted in an increase in
labor’s relative share. This implies that there has been
greater ease of substitution of capital for labor in the
U.S. agricultural sector than in the manufacturing
sector. Hence, in spite of the introduction of labor-
saving technology, labor’s relative share increased in
the industrial sector. In the agricultural sector,
however, labor was more easily displaced by capital-
intensive, labor-saving technology and consequently,
labor’s relative share declined.

U.S. COTTON LABOR’S RELATIVE SHARE:
AN EMPIRICAL EXAMPLE

Rather extensive investigations [4, 9, 10] have
been made of changes in factor shares for selected
industries within the U.S. manufacturing sector. This
has not been the case for the crop or livestock
components of the U.S. agricultural sector.

Mechanization of cotton production in the U.S.
has been quite rapid. Cotton production prior to the
post World War II period was one of the most
labor-intensive major crops. The majority of labor
input for cotton production during the pre-war
period was required for the harvesting operation.²
Introduction of mechanical cotton harvesters after
World War II reduced labor requirements in harvest-
ing by approximately 95 percent [12].

Rate of adoption of mechanical harvesters was
quite rapid. In 1946 only one percent of U.S.-grown
cotton was mechanically harvested. By 1970 virtually
all (97 percent) cotton produced in the U.S. was
picked mechanically.

For most family and hired workers who had been
employed in cotton production this meant the end of
agricultural employment, and eventually compelled
many to go to towns and cities, (mostly in the North)
to live and seek employment. The resulting rural-
urban migration led to difficult socio-economic
adjustment problems for both migrants and affected
cities. For cotton farmers, the capital-intensive nature
of the new technology drastically altered farm organi-
zation and operation.

The question addressed in this section, however,
is: What happened to labor’s relative share within the
cotton sector? Real farm wages in the South in-
creased 50 percent from 1952 to 1969, the period of
the most rapid rate of adoption of cotton pickers,
while man-hours devoted to cotton production fell
over 80 percent. Furthermore, real value of cotton
production, including acreage diversion transfer pay-
ments, also fell by nearly 60 percent. Moreover,
labor’s relative share (S_l) in the cotton sector fell
from 39 percent in 1952 to 22 percent in 1969, a
decline of 44 percent (Table 2).

The mathematical derivation in the previous
section suggests that, given a labor-saving tech-
nological change in the cotton sector which displaces

TABLE 2. WAGE RATES, MAN-HOURS, VALUE
OF PRODUCTION AND LABOR’S
RELATIVE SHARE FOR U.S. COTTON
PRODUCTION, 1952-1969

SOURCE: United States Department of Agriculture publica-
tions [16, 17, 18].

^aAverage of four major cotton regions: South Atlantic,
East South Central, West South Central and Pacific. Deflated
by Prices Paid by Farmers Index, 1947-49 = 100.

^Deflated by Wholesale Price Index, 1947-49 = 100.
Price used is a composite of market price and support price
based on cotton program participation.

^cColumn one multiplied by column two divided by
column three.

²The other labor-intensive activity was “chopping” cotton. This operation has also been largely mechanized.

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