Laws: January, 2004 - Number #08

Employment/Unemployment. The US unemployment rate was six percent in October 2003, 5.9 percent in November 2003, and 5.7 percent in December 2003, as the labor force shrank to 146.9 million. Job growth remained weak: the US economy generated fewer than 100,000 jobs a month for the past 11 months, and has lost 2.3 million jobs since President Bush took office in January 2001. There are about 8.7 million jobless Americans, including two million unemployed six months or more, despite a resumption of economic growth and a rising stock market. The US labor force participation rate- the percentage of those 16 and older working or looking for work- fell from a peak 67.3 percent in 2000 to 66 percent in 2003. Almost 20 percent of the net new jobs in Fall 2003 were in restaurants. The National Restaurant Association says that restaurants account for 6.6 percent of US GDP and employ 11.7 million workers. Self-employment has been rising: 6.6 percent of those in the surveys conducted with 60,000 household say they are self-employed, up from 6.1 percent in January 2001. Payroll employment, derived from a survey of 400,000 of the 8.5 million US businesses or establishments, remained 2.3 million lower in December 2003 than in January 2001. Some economists say that the reason why the household and establishment surveys have been diverging is unauthorized workers, who are counted in the household survey, but not in the establishment survey. Strikes. Los Angeles suffered its tenth mass transit strike since 1960, and many of the 400,000 daily riders inconvenienced by a mechanics' strike in October 2003 were immigrants. The dispute centered on rising health care costs, and the union's control of a $17-million health insurance fund to which the Metropolitan Transportation Authority made payments. Some 70,000 clerks at Southern California supermarkets also went on strike in October 2003, as the supermarkets resisted union demands for employer-paid family health insurance because, they said, Wal-Mart stores, already the largest US food retailer, is coming to California with wages and benefits that are half the average of $18 an hour they pay. Unions say Wal-Mart should be forced to pay more, rather than to reduce wages and benefits in established supermarkets to Wal-Mart levels. Unlike the traditional supermarkets, employee turnover at Wal-Mart is about 50 percent a year (it says turnover in retail averages 70 percent a year), which may be one reason why Wal-Mart offers fewer benefits such as health insurance; about 62 percent of Wal-Mart employees are eligible for health insurance. Non-union Target, known for generous employee benefits, is restricting full health-care coverage to workers employed at least 32 hours a week. Wal-Mart, founded in 1962, revolutionized supply management by ordering only as needed rather than maintaining supplies in warehouses. Its first super centers were in rural areas that were bypassed in discount retailing, and its employees and customers proved to be very loyal. Groceries are the most unionized sector of US retailing, and labor is their largest "controllable" expense. California does not allow a tip-credit reduction in the minimum wage, meaning that the state's waiters must receive $6.75 an hour; 43 other states do, and waiters there are sometimes paid by their employers only $2.50 an hour. MSFW Services. The federal Migrant Education Program aims to maintain educational continuity for children who change schools frequently because their parents follow the crops. Most farm workers have only one farm employer per year, and most children of farm workers are not put in cars and driven from state to state as their parents work in the fields. Indeed, urban children may be more likely to change schools frequently than farm worker children, especially if their parent is homeless. The Fresno Bee on December 28, 2003 profiled a woman whose children changed schools four times in the 2002-03 school year in Fresno, and noted that 2,800 children were enrolled in Project ACCESS, which encourages parents to keep their kids at the same school, even if they move, by providing bus passes so they can get to the original school. The federal Workforce Investment Act of 1998 set up a nationwide system of 1,900 one-stop employment centers to distribute training grants and help workers with job placement services; their budget in FY04 will be $3.3 billion. Data. USDA's quarterly report, "Farm Labor" (http://jan.mannlib.cornell.edu/reports/nassr/other/pfl-bb/2003/), surveys farmers to report the wages and employment of hired workers. There were 1.2 million hired workers on US farms and ranches in October 2003, including 891,000 or 74 percent hired directly by farm operators and 306,000 employed by agricultural service firms such as farm labor contractors. Farm operators paid hired workers (including supervisors and mechanics) an average of $9.05 an hour; field and livestock workers earned an average of $8.47 an hour. The hired worker annual average wage rate for field and livestock workers, which becomes the Adverse Effect Wage Rate for US farmers seeking to hire foreigners with H-2A visas, was $8.42 for the entire US in 2003, up from $8.18 in 2002. The AEWR is set by region, generally several states, and for field and livestock workers was $7.94 an hour in North Carolina in 2003, up from $7.64-North Carolina farmers employ more H-2A workers than any other state. A 1991 USDA publication summarized historical farm labor data. Between 1910 and 1930, the average number of hired workers employed on US farms was relatively stable at about 3.4 million, fell to 2.4 million by 1950, and then declined gradually to 1.2 million by 1970. The number of "family workers," on the other hand, remained at about 10 million from 1910 through 1935, then fell to 7.5 million by 1950, and to three million by 1970. Beginning in 1975, farm labor data were collected via a probability sample rather than by voluntary reporters. Since the 1970s, the average number of hired workers employed on US farms has remained about 1.2 million, although about 300,000 are brought to farms by labor contractors. USDA divides farmers' expenditures into categories, for instance, for feed, labor, rent etc, and finds that hired labor accounts for 10 to 12 percent of farm expenditures, with the percentage rising for larger farms in the western states producing fruits and vegetables. An analysis of NAWS data on the hourly earnings of crop workers found that newcomers, defined as farm workers in the US less than one year when interviewed, earned up to 10 percent less than farm workers in the US longer. Similarly, unauthorized workers earned 10 percent less than authorized workers. The gap between the hourly earnings of unauthorized and authorized workers widened in the 1990s, as the share of the unauthorized rose from less than 10 percent to more than 50 percent. These data suggest a tiered farm labor force, consisting of a newcomer tier with very high turnover rates (newly arrived and usually unauthorized workers who do less than 100 days of farm work in the year they are interviewed and who may not stay in the farm work force), more experienced seasonal workers who tend to do 30 to 120 days of farm work a year, and who are about half authorized and unauthorized, and mostly authorized workers who have the most experience and who do the most average days of farm work each year. For example, over half of the authorized workers have over 12 years experience, compared to five percent of the unauthorized. USDA-NASS. 1991. Farm Employment and Wage Rates, 1910-1990. Statistical Bulletin 822. March.