Meat-Processing Firms Attract Hispanic Workers
to Rural America
Hispanics increasingly
meet labor demand arising from
industry restructuring.
William
Kandel
|
|
|
|
The
meat-processing industry is switching
to lower skilled labor and increasingly
relocating plants to rural areas. |
|
|
Hispanics
are moving into the meat-processing
labor force and helping to meet demand
for low-skill workers. |
|
|
Hispanic
inmigration mitigates rural population
decline and stimulates local economies. |
|
| This
article is drawn from . . . |
| New
Patterns of Hispanic Settlement in Rural America,
by William Kandel and John Cromartie, RDRR-99,
USDA, Economic Research Service, May 2004
“Restructuring of the US Meat-processing
Industry and New Hispanic Migrant Destinations,”
by William Kandel and Emilio Parrado, Population
and Development Review, 31(3) (2005):
447-471.
Consolidation
in U.S. Meatpacking, by James M.
MacDonald, Michael E. Ollinger, Kenneth E.
Nelson, and Charles R. Handy, AER-785, USDA,
Economic Research Service, February 2000,
Structural
Change in U.S. Chicken and Turkey Slaughter,
by Michael E. Ollinger, James M. MacDonald,
and Milton Madison, AER-787, USDA, Economic
Research Service, November 2005 |
| You
may also be interested in . . . |
| Impacts
of Hispanic Population Growth on Rural Wages,
by Constance Newman, AER-826, USDA, Economic
Research Service, September 2003
Rural Hispanics
at a Glance, by William Kandel, EIB-8,
USDA, Economic Research Service, December
2005 |
Over the past 40 years, the U.S.
meat-processing industry has been transformed by
changing consumer preferences for meat products,
which helped trigger a consolidation within the
industry and a geographic shift in the location
of meat-processing plants to rural areas. Technological
innovations have also enabled processing plants
to make substantial gains in efficiency. Despite
these and other changes, employment across the industry
has risen during the period, bucking trends in the
manufacturing sector. Increasingly, the demand for
workers in rural meat-processing plants has been
met by the Nation’s growing Hispanic population.
Between 1980 and 2000, the Hispanic share of meat-processing
workers increased from under 10 percent to almost
30 percent, while the Hispanic workforce itself
became mostly foreign born. While the rapid population
growth and geographic dispersion of Hispanics since
the 1990s has helped meet the labor needs of rural-based
meat-processing plants, Hispanic settlement has
also had social and economic implications for rural
communities.
Americans Change Their Eating
Habits
Consumption trends have influenced
labor demand in the meat-processing industry.
Throughout the 1950s, Americans consumed about
three times as much beef and twice as much pork,
per capita, as poultry. Since then, technological
innovations in poultry production, such as the
integration of chicken breeding and slaughtering
operations and increased use of specialized processing
technology, have increased plant efficiency and
enabled firms to reduce poultry prices. From 1960
to 1997, the retail price of whole chickens steadily
declined in real dollars from $1.38 to $0.62,
which bolstered demand. In contrast, the real
price of beef increased from $2.70 in 1960 to
$4.86 in 1982 before falling to $1.74 by 1997.
Poultry consumption received an
additional boost from fast food marketing, growing
consumer awareness of health considerations, and
the popularity of low-fat diets. Consequently, between
1970 and 2000, per capita annual consumption of
beef declined (from 80 to 65 pounds), while that
of chicken almost doubled (from 28 to 53 pounds).
After the mid-1980s, the beef sector implemented
production strategies and technologies similar to
those of the poultry sector and beef prices fell
significantly. But changes in consumption behavior
and relative prices of meat products over the previous
two decades had helped to permanently alter Americans’
eating habits. Thus, by the end of the 1990s, Americans
were consuming less beef, the same quantity of pork,
and twice as much chicken and turkey as in 1970.
Another trend affecting the meat-processing
industry was the growing domestic demand for pre-cut
and further-processed products. As more women
entered the labor force in the 1960s, American
consumers increasingly demanded convenient-to-prepare
food. Beef, pork, and poultry firms responded
by supplementing their slaughtering plants with
production facilities that further processed meat.
Cut-up meat products increased from a relatively
minor share of all meat production in the early
1960s to the dominant output by the 1990s. In
1963, for example, the poultry product mix sold
in American supermarkets consisted of 85 percent
whole birds and 15 percent cut-up products; by
1997, that proportion had reversed completely.
In addition to cutting up meat products for different
markets, many large pork and poultry plants also
season, cook, sort, and/or package meat prior
to shipment.
Changing consumer preferences and
the meat industry’s increased emphasis on
pre-cut and pre-packaged meat have also helped to
expand meat exports. The predominance of packaged
meat products facilitated the export of beef and
pork products. Changing preferences among U.S. consumers
led to a segmentation of products targeted to domestic
and international poultry markets. For example,
chicken breasts and other white meat are mainly
shipped to domestic markets, and chicken legs and
other dark meat are exported, primarily to China,
Mexico, and Russia. U.S. poultry exports, which
for decades rarely exceeded 5 percent of all poultry
production, increased from roughly 135 million pounds
in 1970 to 5.6 billion pounds by 1997, about 17
percent of production.
All of these trends affected employment
levels in the meat-processing industry, particularly
the poultry industry, where growth in consumption
was the highest. Between 1972 and 2001, employment
in the poultry processing industry jumped from
106,600 to 258,200, or roughly 150 percent. In
the beef and pork processing industry, employment
increased modestly from 240,400 to 253,100 over
the same period. Despite extensive mechanization,
growth in both carcass size and the sheer variety
of new and further-processed products, such as
boneless cuts and marinated and precooked meat
products, required additional cut-up and production
operations and workers, which generated considerable
demand for low-skilled manual labor in meat-processing
facilities.
Fewer Firms, Larger Plants
In response to growing competition
within the industry, new technological opportunities,
and changing consumption patterns, meat processors
gradually shifted production to larger, more specialized
plants, increasing profitability through economies
of scale. In the 1950s, for example, poultry-processing
operations began to contract with poultry growers
for specific sizes of birds at set prices while
providing growers with chicks, feed, vitamins, and
other necessary inputs. Although production processes
differed from the poultry-processing industry, other
meat-processing sectors subsequently initiated similar
practices with comparable outcomes. These changes
reduced producer costs, which benefited consumers.
Between 1960 and 1997, consumer prices declined
roughly 55 percent for poultry and 35 percent for
beef.
As smaller producers struggled
unsuccessfully within this increasingly competitive
sector, plant consolidations gradually led to an
industry dominated by fewer firms and large processing
plants. By the end of the 1990s, plants with more
than 400 employees accounted for most U.S. meat
production. Since the 1970s, the “four-firm
concentration ratio”—the proportion
of total production controlled by the four biggest
companies—has increased markedly. By the late
1990s, four firms accounted for roughly 50 percent
of all U.S. poultry and pork production and 80 percent
of all beef production. Both trends—increasing
plant sizes and industry consolidation—contributed
to the growing demand for low-skilled workers.
More Meat-Processing Plants Are
Located in Rural Areas
In addition to industry restructuring,
meat-processing firms have increasingly relocated
plants to rural areas to reduce livestock transportation
and feed costs, ensure more consistent quantities
of animals, and thereby use processing plants around
the clock and throughout the year because of fewer
interruptions in livestock supply. Economic incentives
offered by rural communities, along with the greater
likelihood that rural-based plants are not unionized,
have also induced firms to relocate plants.
Rural relocation varies by sector.
Chicken production has for many years been concentrated
in the rural Southeast; in 1993, the four leading
poultry-producing States were Arkansas, Georgia,
Alabama, and North Carolina, all with large proportions
of rural residents. In contrast, beef-processing
plants have tended to relocate from urban areas
to places near large feedlots where cattle are raised,
notably in Colorado, Nebraska, Kansas, Oklahoma,
and Texas. Hog-processing plants have relocated
to nontraditional regions outside the Midwest to
take advantage of lower land and labor costs in
rural areas of the West, Southwest, and Southeast.
In all regions of the Nation except
the Northeast, jobs in meat processing have shifted
from metro to nonmetro counties, reflecting an urban-to-rural
transition that began in the 1980s. The shift is
remarkable in light of the sizable increase in the
number of persons employed in the industry. In the
South, for example, meat-processing employment doubled
between 1981 and 2000 while the nonmetro share increased
from 66 to 76 percent. Over the same period, the
total number of U.S. meat-processing employees in
rural areas doubled from 147,000 (46 percent of
U.S. total) to 294,000 (60 percent of U.S. total).
Labor demand in meat-processing plants increasingly
could not be met in nonmetro counties in the Midwest
and Great Plains, regions that have lost population
consistently over the past 50 years. In contrast,
jobs were filled more easily in the nonmetro South
and West, where population has increased during
the past 50 years due to growth in the manufacturing,
service, retirement, and recreation sectors.
Hispanic Workers Constitute a
Growing Share of the Meat-Processing Labor Force
All of these conditions—changing
consumer preferences for more convenient foods,
industry consolidation and concentration, and relocation
to rural areas—contributed to either a growing
demand for, or a shortage of, low-skilled workers
in the meat-processing industry during a period
when overall manufacturing employment declined in
the U.S. In addition, stable or declining real wages
from meat-processing employment made it relatively
less appealing than alternative occupations and
careers for an increasingly well-educated native-born
workforce.
Historically, meat-processing
employment offered relatively stable and well-paid
employment for those with below-average education
levels. Faced with mounting competition in the
late 1970s, however, beef- and pork-processing
firms with unionized plants in the Midwest demanded
that workers accept wages comparable to those
of nonunion plants. Poultry processing firms based
in the Southeast had no tradition of unionized
plants, and real wages in the industry have remained
unchanged for roughly three decades. At the same
time, meat-processing plant work has become increasingly
deskilled as a result of greater technological
innovation. Thus, what had been an urban-based,
unionized, and often skilled workforce employed
in production plants, supermarkets, and butcher
shops in the 1950s gradually changed into a rural-based,
mostly nonunionized, and low-skilled workforce
concentrated within manufacturing plants by the
end of the 1980s, as it remains today.
Meat-processing wages continue
to exceed those of low-skilled employment in other
manufacturing sectors, but meat-processing work
is relatively hazardous. Employees in rural plants
may face greater challenges than urban-based workers,
such as a lack of conveniently located housing,
limited public and retail services, and longer,
more costly commutes. Not surprisingly, large rural-based
processing plants have difficulty filling employment
slots, and turnover rates approaching 100 percent
annually are not uncommon in some plants.
Although meat-processing is situated
within the broader U.S. manufacturing sector that
has seen employment levels decline, changes in meat-processing
itself—the organization of production, industrial
concentration, and plant relocation—have increased
demand for low-skilled workers. Foreign-born Hispanics
have helped meet that demand. Between 1980 and 2000,
the share of non-Hispanic Whites in the meat-processing
workforce declined from 74 to 49 percent. In contrast,
the share of Hispanics increased from 9 to 29 percent,
with the foreign-born segment of the Hispanic meat-processing
workforce increasing from 50 to 82 percent. Roughly
1 in 10 nonmetro Hispanics now works in meat processing.
Hispanic Population Growth Transforms
Rural Communities
The transformation of the meat-processing
industry over the past four decades has significantly
increased its labor demand and generated a workforce
with a growing Hispanic presence. In the Southeast,
for instance, a spike in the rural Hispanic population
during the 1990s is clearly linked to a growing
Hispanic representation in the poultry-processing
industry. Hispanic and foreign-born workers in meat
processing follow a pattern found in crop agriculture,
forestry, construction, low-skilled services, and
many other nondurable and durable goods manufacturing
sectors. As educational attainment for the general
population rises, and industrial restructuring and
greater employment options reduce the relative attraction
of low-skilled jobs, U.S. firms can be expected
to employ growing shares of Hispanic and foreign-born
workers.
Recent Hispanic population growth
in nonmetro counties outside the Southwest represents
one of the more profound social transformations
currently affecting rural areas, altering their
social and economic profiles as well as the broader
national perception of rural and small-town America.
Although a small share (10 percent) of all U.S.
Hispanics live in nonmetro counties, the rapid growth
of the U.S. Hispanic population—exceeding
100 percent in about half of all States over the
past decade—has significant implications for
rural communities. Hispanic population growth can
alter demographic trends, as it has throughout the
Central Great Plains, which since the 1950s has
steadily lost population due to increased agricultural
labor productivity and outmigration of young adults.
During the 1990s, Hispanic population growth actually
stemmed overall population decline in over 100 nonmetro
counties.
Moreover, new Hispanic residents
stimulate local rural economies as consumers, in
addition to contributing considerably to local sales,
property, and State tax revenues. Rural Hispanic
population growth also has significant policy implications
for social service provision. Because Hispanics
in new nonmetro destinations are often younger and
more economically disadvantaged than native-born
residents, they may place new demands on resources
allocated to local health care delivery, public
schools, and various forms of public assistance.
Rural communities seeking to attract companies to
locate plants in their districts will be in a better
position to integrate foreign-born newcomers and
augment their public services accordingly if they
are aware of these ramifications.
|
Download PDF version