Rural Laws: April, 1998 - Number #1

The General Accounting Office released a report in March 1998 on changes in communities in Nebraska and Iowa that had large meatpacking work forces. The GAO assembled employment, education, Medicaid and crime data for 23 counties with meatpacking plants, including 10 counties in Nebraska and 13 counties in Iowa.

The GAO concluded that the demographic and economic changes due to meatpackers hiring immigrant workers had mixed effects. On the one hand, the immigrants stabilized populations in many counties that were losing residents and meatpacking counties typically had faster increases in per capita incomes and retail sales then the state as a whole.

On the other hand, there were sharp increases in the number of LEP children in public school, and very high turnover among workers--18 to 83 percent a year--led teachers to complain that it was very hard for children to get the full benefits of education. Many meatpacking counties received funds from the Migrant Education program--unlike most farm worker assistance programs, ME considers eligible for services the children of workers to migrate to an area to do nonfarm food processing work, which is classified as manufacturing in US data.

There were increases in the use of Medicaid, but primarily among children and elderly residents. Similarly, the familiar story of rising crime associated with the changing work force turned out to be more complex in practice. In Nebraska, the average number of serious crimes reported rose sharply between 1986-87 and 1994-95, but in Iowa, many of the counties with major meatpacking plants had fewer crimes in the mid-1990s than in the mid-1980s.

There was widespread agreement that the housing market had changed as a result of the changed work force, especially for inexpensive rental housing such as mobile homes.

The INS estimated that 25 percent of the meatpacking work force in Nebraska and Iowa was not authorized to work in the US. In 1995-96, some 123,000 workers were employed in US meatpacking. Entry-level hourly wages were $6.15 to $8.20 and weekly wages averaged $415.

Dodge City, Kansas, population 21,000 in 1990, was profiled on January 29, 1998 in the New York Times as a city in which local youth move away and Mexican and other Latino immigrants arrive to fill jobs in meatpacking plants. Hispanics are 75 percent of the work force at Dodge City's two largest meatpackers: Excel Corp., part of Cargill Foods, with about 2,500 workers; and National Beef Co., part of Farmland Industries Inc., with 1,300 to 1,400 workers. Hispanics are a similar percentage of the work force in meatpacking plants in Garden City, 50 miles to the northwest of Dodge City, and Liberal, 75 miles to the southwest.

The Excel human resources manager, Jim Maher, said that Excel recruits via its current employees: they tell their relatives about available jobs. Starting pay is $8.64 an hour, rising to $12. Annual turnover is 50 percent, meaning that Excel issues over 5,000 W-2 statements each year to maintain a 2,500-person labor force.

Most of the Latinos arrived after 1990, so that small communities have experienced rapid demographic change. In Dodge City, for example, Hispanics are 43 percent of the 5,100 students, and 54 percent of the elementary pupils. High turnover in the plants makes it hard to educate children, who regularly return to Mexico. The school relies on bilingual aides and a newcomers' course for those who arrive with no English.

Dodge City's 1998 population is estimated to be over 25,000, and Hispanics are making their mark as home buyers. Banks and stores are also seeking bilingual employees. The Dodge City Daily Globe publishes a tabloid weekly in Spanish, and school and law enforcement officials are studying Spanish.

Dodge City is part of Americana. Founded in 1872 as a trailhead for cattle driven from Texas, its sheriffs were Bat Masterson and Wyatt Earp (the fictional Matt Dillon).

Nebraska has the lowest unemployment rate in the US--1.6 percent in 1997. Despite unfilled jobs, many young people leave the state for the East and West Coasts after completing their education. On February 28, the New York Times noted that Hispanic and Southeast Asian immigrants are moving into the plains states, but these states are "still losing young adults in their 20s." According to one study, half of the college graduates leave Nebraska and "The higher the ACT (college prep test) score, the greater the chance of them leaving."

Privately owned Murphy Family Farms is the largest US pork producer; it owns 275,000 sows, twice as many as number two Carroll's Foods. In an October 13, 1997 article, Forbes Magazine estimated that North Carolina-based Murphy nets $150 million a year on revenues of $775 million, and that the company would be worth about $1.5 billion if it went public.

Most Murphy pigs are raised by 500 independent growers under contract. Forbes described one contract farmer who borrowed $325,000 to raise 5,000 piglets for seven weeks for $3 a piglet; Murphy supplies the piglets and the feed. The cost of feed is about two-thirds of the cost of raising a pig from birth to its 250-pound slaughtering weight 30 to 33 weeks later. Pigs consume three to four pounds of feed for every pound of weight they gain.

Poultry. DOL inspectors examined 51 of the nation's 174 poultry processing plants in October-November, 1997, and found that 60 percent violated the Fair Labor Standards Act overtime laws, usually by underreporting the hours worked by chicken catchers, who travel from farm to farm to catch chickens. The National Broiler Council said the 60 percent violation figure was due to DOL's defining chicken catchers as nonfarm employees entitled to overtime pay after 40 hours of work a week, rather than as farm workers not entitled to overtime.

DOL noted that over half of the poultry plants unlawfully made workers pay for clothing and protective gear that the companies required workers to wear. Some poultry processors require their workers to clock out for breaks, so that time spent removing protective clothing and redressing is not paid time.

Poultry processing plants have very high turnover, giving some of the rural communities in which plants are located labor forces that include more migrants than many seasonal farming areas. The poultry industry as a whole has a turnover rate approaching 100 percent, meaning that the average worker in the typical plant lasts six months at that plant. Virtually all plants continuously post help-wanted signs.

Tyson, the largest poultry processor, has an average 73 percent turnover in 84 US chicken processing plants in 21 states. With 72,000 processing employees, this means that Tyson has over 1,000 unfilled jobs on most days. Most Tyson employees earn $7 to $8 an hour, or $14,000 to $16,000 a year.

Tyson's labor force is 49 percent non-Hispanic white, 29 percent Black and 19 percent Hispanic. The Hispanic percentage is increasing rapidly, and Tyson has developed a number of programs, including English and computer classes, GED and naturalization classes, and financial planning. Tyson encourages and rewards managers who learn Spanish or another second language.

Neither Tyson nor anyone else studies what happens to employees who leave--the focus seems to be on recruiting new hires rather than tracking ex-employees. Most poultry companies rely on networks of current employees as well as independent recruiters to find additional workers. Many of the labor recruiters for poultry processors are based in the Rio Grande Valley; they prefer to send newly arrived workers from Mexico to the poultry plants in the north for fees that range from $150 to $250 a worker.

Upon arrival, workers complete forms and are shown safety videos and then are put to work. Newly arrived immigrant workers are generally grateful for the jobs; most worker complaints revolve around the fast and continuous pace of work, insufficient breaks and too little time for breaks, and employer deductions for housing and work equipment.

Many meat and poultry plants are located in rural areas, so that an influx of immigrant workers soon changes the ethnic composition of the population, and leads to major housing, schooling, health care, and policing challenges. Rogers, Arkansas, a city of 17,000 in northwestern Arkansas, went from few Hispanics to 25 percent Hispanic residents between 1990 and 1997. Local leaders sponsored soccer leagues to promote interaction and understanding, and one local bank aggressively marketed its services to Hispanics, helping them to establish credit histories, teaching them to write checks even if they do not speak English, and promoting home ownership. Homes that cost $75,000 are about five times the average poultry worker's annual earnings.

The Washington Post on March 24, 1998 summarized the Rogers experience adapting to the influx of Hispanic workers. The article emphasized that the mayor welcomed the newcomers, many of whom moved to Rogers from elsewhere in the US because the earnings-housing price ratio was far better in Arkansas. With two earners, poultry workers can earn $25,000 to $35,000 a year, and thus can afford to buy houses that cost $75,000 to $100,000. The article noted that an anti-immigrant group formed in reaction to the influx and that many residents do not believe the newcomers are making a sufficient effort to learn English.

Siler City, North Carolina has grown from 5,000 to 8,000 residents in the 1990s, as Hispanic immigrants arrived to work in poultry plants, construction and service industries. Hispanics are now estimated to be 40 percent of the town's population and in 1997, Siler City hired its first bilingual police officer.

A series of stories in the January Clarion-Ledger (MI) explained that poultry processor B.C. Rogers Poultry, Inc. of Morton, Michigan opened a recruitment office in March 1994 in Miami to recruit workers for its Mississippi poultry processing plants. B.C. Rogers had 530 Latino employees in January 1998.

The Mississippi Poultry Association says there were eight poultry processing companies operating in Mississippi in 1997, down from a high of 13 in the 1980s. Mississippi ranks fifth in broiler production, with $1.4 billion in sales in 1996; broiler production is concentrated in Scott, Smith, Jones, Simpson, Leake, Newton and Wayne counties.

According to the Environmental Protection Agency, about 450,000 US farming operations confine animals. The largest 6,600 are operations big enough to raise 1,000 cattle, 2,500 hogs or at least 30,000 chickens.

Lois Romano, "A community adapts to newcomers," Washington Post, March 24, 198. Pam Belluck, "Nebraska Fights to Keep Its Home-Grown Talent Home," New York Times, February 28, 1998. Shirley Christian, "Latin Immigrants Fuel Dodge City's Meat-Packing Boom," New York Times, January 29, 1998. GA). 1998. Community Development: Changes in Nebraska's and Iowa's Counties With Large Meatpacking Workforces GAO/RCED-98-62, February 27. http://www.gao.gov/new.items/rc98062.pdf