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QCEW: Who employs California farm workers?
May 19, 2020
During the second quarter of 2019, California had 1.6 million businesses covered by unemployment insurance, including 71 percent with fewer than five employees and 2,800 with 500 or more employees. There were 17.7 million UI-covered employees in the state, including eight percent who were employed by businesses with fewer than five employees and 21 percent who were employed by businesses with 500 or more employees.
Agricultural employment in California is more concentrated in large businesses than nonfarm employment in the state. California had almost 17,000 agricultural businesses (NAICS 11) during the second quarter of 2019, including 53 percent that had fewer than five employees and 135 with 500 or more employees. The less-than-five employee agricultural businesses accounted for only three percent of total agricultural employment of 458,000, while the 135 large agricultural businesses with 500 or more employees accounted for 30 percent of total agricultural employment.
The concentration of agricultural employment in larger businesses is more apparent if businesses and employment are grouped into three categories: less than 10 employees, 10 to 99, and 100 or more. A smaller share of agricultural businesses have less-than-10 employees, 70 percent versus over 80 percent for nonfarm businesses, and they employ a smaller share of employees, seven percent versus 15 percent in nonfarm businesses.
At the large end of the spectrum, only two percent of nonfarm establishments had 100 or more employees during the second quarter of 2019, and they collectively employed 45 percent of all California workers. Five percent of agricultural businesses had 100 or more employees, and they collectively employed 65 percent of agricultural employees.
Crop and animal agriculture follow the same pattern: 60 percent of the 9,300 crop businesses (111), 50 percent of the 2,600 animal businesses (112), and 40 percent of the 4,500 support businesses (115) had fewer than five employees, while 40 crop farms, no animal farms, and 95 support firms had 500 or more employees in the second quarter of 2019.
The small businesses that are the majority of employers hire very few workers. Only five percent of the 173,300 crop employees were hired by the smallest crop businesses, eight percent of the 28,400 animal employees, and one percent of the 253,300 support employees. The largest 40 crop businesses with 500 or more employees hired 25 percent of all crop employees and the 95 largest support firms employed 38 percent of the support employees.
A year earlier, during the third quarter of 2018, some 1.1 million or over 70 percent of California’s 1.6 million employers or establishments employed fewer than five workers, and they collectively employed 1.4 million of the total 17.8 million workers. At the other end of the business-size spectrum, 2,700 establishments employed 500 or more workers, and they collectively employed 3.6 million or 20 percent of the state’s UI-covered workers.
Most of California’s farm and nonfarm businesses have relatively few employees, but most employees are employed by a relative handful of large businesses. The 900 agricultural (11) businesses with 100 or more employees during the second quarter of 2018 hired two-thirds of all agricultural employees. Employment in support services for agriculture (115) was more concentrated: 560 support businesses hired 78 percent of all agricultural support employees during the second quarter of 2019.
Size of business data are available by two-digit NAICS at the county level for the third quarter of the year. The 100 largest agricultural businesses in Fresno county during the third quarter of 2018 employed 70 percent of the county’s 51,700 agricultural employees.
More detailed data at the four-digit level are available by special request, but many of the cells are blank due to data confidentiality. During the third quarter of 2019, there were almost 17,000 agricultural businesses with 475,300 employees. Two-thirds of these businesses were in fruits (1113), vegetables (1112), greenhouses (1114), and crop support (1151). These FVH businesses had over 425,000 employees or over 90 percent of total employment in California agriculture.
Some employment by size of business is suppressed. Most cells have data for businesses with fewer than 100 employees, so that summing employment for less-than-100 employee businesses and subtracting from total employment in a 4-digit NAICS gives an estimate of the share of employment in a commodity employed by more and less-than-100 employee businesses.
During the third quarter of 2019, about 35 percent of all employment in California agriculture was with businesses that had fewer than 100 employees. The range was wide. Almost all of the employment in animal NAICS categories was in establishments with fewer than 100 employees, including 90 percent of employment in cattle and dairy businesses. By contrast, only 20 percent of the employment in crop support businesses and 40 percent of employment in fruit and vegetable businesses was with less-than-100 employee businesses.
Most agricultural workers work for large employers
During the 2nd quarter of 2019, California’s agricultural employment was more concentrated on large farms than the state’s nonfarm employment
Over half of California agricultural businesses (NAICS 11) had fewer than 5 employees during the 2nd quarter of 2019
Most California farm employers are small and hire a small share of all workers, while a handful of large farm employers hire most farm workers, creating an X-diagram
Over half of animal employees (NAICS 112) were employed on the 30 percent of farms with 10 to 49 employees during the 2nd quarter of 2019
12% of nonfarm support businesses (NAICS 115) had 100 or more employees, and they employed 78% of agricultural support workers during the 2nd quarter of 2019
Nonfarm support businesses (NAICS 115) created an X-distribution during the 2nd quarter of 2019: a large share of small businesses had a small share of employment, while a small share of large businesses accounted for most support employment
90% of the 475,300 agricultural employees during the 3rd quarter of 2019 were employed in FVH commodities, including over half in crop support
35% of agricultural employees during the third quarter of 2019 were employed in businesses with fewer than 100 employees. The share of employees in smaller businesses was larger for animal agriculture and smaller for FVH farms, including crop support