Wages for farm workers and food processing will likely rise, if the past is any guide.
Figure 1: Farm worker wage, 2023$ (blue, left log scale), and share of civilian employment foreign born (tan, right scale), both sa NBER defined peak-to-trough recession dates shaded gray. iFarm worker wage seasonally adjusted by author using X-13, deflated using CPI-U. Source: NASS/USDA, BLS, NBER, and author’s calculations.
Figure 2: Average hourly earnings for food manufacturing for production and nonsupervisory workers, 2023$ (blue, left log scale), and share of civilian employment foreign born (tan, right scale), both sa NBER defined peak-to-trough recession dates shaded gray. Wage deflated using CPI-U. Source: BLS, NBER, and author’s calculations.
How did these higher labor costs fit into wholesale prices? Here are some key PPI components vs. foreign born employment share.
Figure 3: PPI component for fresh fruit, melons, nuts (blue, left log scale), and PPI component for meat, poultry, fish (pink, left log scale), and and share of civilian employment foreign born (tan, right scale). all sa NBER defined peak-to-trough recession dates shaded gray. Source: BLS, NBER, and author’s calculations.
Now, one could argue that the increases in these PPI components were just a symptom of the generalized increase in the price level (some would say monetary policy). However, we can examine the relative price of groceries. Here’s that picture.
Figure 4: Relative CPI-food at home to core CPI (blue, left log scale), and share of civilian employment foreign born (tan, right scale), both sa NBER defined peak-to-trough recession dates shaded gray. . Source: BLS, NBER, and author’s calculations.
Notice that the relative price of groceries started falling once the share of foreign born employment re-attained pre-family-separation trend.
So, don’t say you weren’t warned.