Jul 13, 2022
Study shows link between ag labor shortage and inflation

State agricultural groups and U.S. Representatives are urging Congress to pass ag labor workforce changes in order to combat inflation.

At a July 12 press conference, U.S. Reps. Dan Newhouse (R-Washington), Mike Simpson (R-Idaho), Doug LaMalfa (R-California) and Jim Baird (R-Indiana) rallied for support of the bipartisan efforts of Sens. Mike Crapo (R-Idaho) and Michael Bennet (D-Colorado), who have led the charge to get a farm labor bill introduced and passed in the Senate.

The House of Representatives passed the Farm Workforce Modernization Act in both 2019 and 2021.

Ag farming labor issues
U.S. Rep. Mike Simpson (R-Idaho) speaks outside of the Capitol Building in Washington, D.C., on Feb. 26, 2020 during a press conference to urge the Senate to take up agriculture labor reform.

“This is a vitally important issue for America,” Simpson said. “We passed it twice in the House. We want the senate to act on it and we want them to do it this year.

“I am living proof that you can actually talk about immigration and go out and win an election.”

At the press conference, Texas A&M University Associate Professor Sean Maddan released data from a new economic study on the link between stabilizing the agricultural workforce and decreasing inflation and consumer prices. The study shows that ensuring farmers have a stable, secure, reliable and legal workforce is crucial to keeping America’s grocery shelves stocked, combating inflation, and lowering food prices (including milk, eggs, meat and produce) for all domestic consumers.

“Overall, the findings in this study tended to support the conclusion that policies on non-citizen admissions and immigration have a profound association with the economy,” Maddan said. “The relationships denoted above are strong, statistically significant relationships and definitely warrant further research and consideration.”

The Texas A&M study’s topline findings include:

  • More migrant and more H-2A workers are related with lower inflation.
  • More migrant and more H-2A workers are associated with higher average wages and minimum wages.
  • More migrant and more H-2A workers are associated with lower unemployment.
  • More denied petitions for naturalization are associated with larger consumer prices and higher inflation.
  • More petitions for naturalization are associated with lower inflation.

The data for this research were collected from official sources that include the Bureau of Labor Statistics, Federal Reserve Bank of St. Louis, U.S. Customs and Border Protection and USDA. Information was collected from 1960-2020 for most data points, associated with meats, poultry, milk and eggs.

National Council of Farmer Cooperatives Chuck Connor put the bill in historical context and pointed out its vital role in securing the nation’s food supply.

“For more than a decade, a wide range of agriculture groups have come together to push for a solution to the agriculture labor crisis in a united effort… Yet, it’s the events of the past few years — from the COVID to the war in Ukraine — that have highlighted, for me, a fact that often gets overlooked in this debate: our national security is tied to our ability to feed ourselves, and that ability is currently under extreme threat because of the agriculture labor crisis.”

National Council of Agricultural Employers President Michael Marsh added: “A nation unable to feed itself has impaired its national security. A bipartisan coalition of leaders in the House of Representatives successfully negotiated and passed ag labor reform. We now need the Senate to act. We applaud U.S. Senators Michael Bennet of Colorado and Mike Crapo of Idaho for their bipartisan leadership in that Chamber and look forward to helping them advance their version of this critical legislation in the U.S. Senate.”

The full study can be found at www.tamiu.edu/coas/documents/tamiu-abic.pdf.

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