[PDF] Higher Wages Dont Always Mean a Higher Standard of Living





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We uncover vast geographical differences in material standard of living for a given income level. Low income residents in the most affordable commuting zone 



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Higher Wages Dont Always Mean a Higher Standard of Living

Jul 27 2017 One might assume that these farm management challenges come with a benefit—higher wages for crop workers means a higher standard of living.



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a higher standard of living I shall call this the “dominance par- tial ordering ” The dominance partial ordering is of course very familiar



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1 farmdoc daily July 27, 2017

a Higher Standard of Living:

Rural Cost-of-Living and Farmworker Wages

Travis Grout and Jennifer Ifft

Charles H. Dyson School of Applied Economics and Management

Cornell University

July 27, 2017

farmdoc daily (7):136

of Living: Rural Cost-of-Living and Farmworker Wages." farmdoc daily (7):136, Department of Agricultural

and Consumer Economics, University of Illinois at Urbana-Champaign, July 27, 2017.

Permalink: http://farmdocdaily.illinois.edu/2017/07/higher-wages-dont-always-mean-higher-standard-of-living.html

Differences in the cost of living across U.S. complicates ongoing farm labor challenges. Farm industry

groups, agricultural media, and even the popular press have covered declining availability of farmworkers

as well as the increasing cost of farm labor. Many farms have been struggling to find crop workers and to

afford competitive wages. As described in a recent farmdoc daily article, rising wages and expanding

mandates for worker benefits will substantially increase farm labor costs over the next decade in states

that account for the majority of U.S. fruit and vegetable production1. One might assume that these farm management challenges come with a benefithigher wages for crop

workers means a higher standard of living. However, absent for this discussion has been the cost of living

in rural areas, which varies dramatically across the U.S and influences just how far farm wages will go.

For example, an average full-time crop worker in New Jersey would have earned roughly $1,600 more

than a counterpart in Pennsylvania in 2016, but these higher wages were offset by higher living costs in

New Jersey's agricultural heartland. After budgeting for housing, food, health insurance, and other necessities, the average Pennsylvania crop worker would enjoy about $2,500 more in annual

discretionary income. In a similar vein, the actual impact of minimum wages also largely depends on living

costs. A minimum wage worker in rural Washington might be considered middle class, whereas a rural antly higher) minimum wage would likely struggle to make ends meet.

State-to-state differences like these have important implications nationwide for agricultural employers

trying to attract farmworkers. These differences are likely to increase in the next five years as major

minimum wage increases take effect in Arizona, California, New York, Oregon, and Washington.

However, the effects of these minimum wage hikes may be partially counteracted by rural cost of living in

these states, which is rising faster than in other major agricultural states.

Methodology

we looked at cost of living in the 15 states that had the highest ratio of agricultural labor expenses to total

agricultural production expenses (excluding Alaska, Hawaii, and states with less than $500 million in crop

sales reported in the 2012 Census of Agriculture). Our analysis used average crop worker wages

2 farmdoc daily July 27, 2017

reported in the Bureau of Labor Statistics (BLS) Occupational Employment Statistics survey2. These figures reflect average wages for manual laborers and exclude supervisors, farm operators and their family, equipment operators, and specialist agricultural workers. Minimum wage information came from state departments of labor (or equivalent). Rising minimum wages

from 2012-2016 are part of a longer-term trend. Since the federal minimum wage reached its current level

in July 2009, 27 states have increased their respective state-level minimums. Some (notably California)

have narrowed or closed minimum wage exemptions relating to agricultural workers; however, many state

minimum wage laws still include exemptions for some such workers (e.g., family members, minors, locals

seasonally employed) or establish different minimum wages for different parts of the state. For example,

counties in upstate New York will have a minimum wage of $12.50 per hour by 2021, compared for $15 for New York City and $14 for Long Island and Westchester County. Our analysis uses the minimum

wage that applies to an adult worker in a rural area. We do not separately consider piecework, since state

labor laws require, in principle, that piece-rate work provide at least a minimum wage to workers3.

Finally, to compare farmworke

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