Minimum Wages and the Farm Labor Market

Abstract

On February 1, 1967, the agricultural labor force of the United States became covered, for the first time, by Federal minimum wage laws and other statutes of the Fair Labor Standards Act [20; 21]. The extension of the law covers agricultural employers for a given calendar year who, during any calendar quarter of the preceding calendar year, use more than 500 man-days of agricultural labor. The calculation of mandays excludes the employer's immediate family and excludes piece-rate hand harvest workers who commute daily from their permanent residence to the farm and who have been employed in agriculture less than 13 weeks during the preceding calendar year. Employees paid on piece-work basis other than the occasional local labor just described must receive at least the minimum wage for hours worked (i.e., wage is computed by summing earning from piece work and dividing this by the hours worked in the week). The employer must make up the earnings to the statutory minimum if necessary. The statutory minimum wage for covered agricultural workers was $1.00 per hour beginning February 1, 1967, $1.15 as of February 1, 1968, and $1.30 as of February 1, 1969. Farm employees are exempt from overtime provisions. The law permits calculation of the minimum wage to include the value of wages in kind provided the worker. These wages in kind include the cost to the employer of furnishing the employee with board, lodging, etc., but such benefits must be received by the employee and his acceptance must be voluntary and uncoerced. The purposes of this study are to set forth a model of the farm labor market and to use this model to analyze the impact of minimum wage legislation. In section II, the model is pr sented. A brief discussion of the data used to estimate the model is provided in Section III. Sections IV and V contain the results of the empirical work. In the former section, the complete model is estimated for the entire period containing both preand post-minimum wage data. In Section V, the model is estimated for the period prior to enactment of the minimum wage and is then used to predict wage rates and employment during the minimum wage period.