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April 1996, Volume 2, Number 2

Rural and Farm Employment

About one-fourth of the 263 million US residents in 1995 lived in
rural or non-metro areas--it should be noted that both rural and
non-metro are "residuals" after determining the number of residents
in urban and metro areas. Urban places have 2,500 or more residents,
and metro counties have a city of at least 50,000, and a population
of at least 100,000. Almost all of California's agricultural
production occurs in metro counties.

USDA reported that 21.6 million persons of the total 137 million
who were employed in 1992 were in the food and fiber sector of the US
economy. The smallest part of the food and fiber sector involved
supplying inputs such as machinery and fertilizers to farmers--some
400,000 workers were employed to prepare farm inputs, half in
non-metro counties.

Farming employed an average 3.1 million farmers and farm workers
in 1992, plus 440,000 workers in agricultural services such as soil
preparation and farm management--40 percent of these farming jobs
were in metro counties.

Over 80 percent of all "agricultural jobs" involve preparing and
distribution food to consumers. About 3.3 million persons were
employed to process and market farm commodities in 1992, but 14
million were employed in wholesale and retail
establishments--including restaurants--to sell food to consumers.

Historically, the African-American unemployment rate has been
about twice the white rate, and the Hispanic unemployment rate has
been closer to the white than the African-American rate. But the
Hispanic unemployment rate in the 1990s has climbed, and it is now
closer to the African-American than the white rate.

There are several explanations for rising Hispanic unemployment.
First, about one-third of the nation's 23 million Hispanics in 1990
lived in California, where the 1990-92 recession was most severe.
California also has some of the fastest-growing low-wage
industries--California has 140,000 of the nation's 950,000 garment
workers, versus 94,000 in New York City.

Second, Hispanics tend to be less educated than whites and African
Americans, making them more likely to lose jobs in recession, and
making it harder for them to find new jobs in recovery. Third,
discrimination against Hispanics may have increased in the
wake of Prop. 187 and other anti-immigrant drives.

Many economists note that Hispanics are young and poorly educated,
promising persistently high unemployment rates. About 80 percent of
white adults were at least high school graduates in 1990, and 70
percent of African Americans, but only 53 percent of adult Hispanics,
and 46 percent of Mexican-Americans were high school graduates or

About 60 percent of the nation's Hispanics are of Mexican origin,
12 percent are Puerto Rican, six percent are Central American, and
five percent each are from Cuba and South America.

However, Hispanic unemployment rates may drop as the California
economy recovers. California's unemployment rate is still higher than
the US rate, but job growth in California in 1996 is once again much
faster than US job growth, a result of jobs created by trade,
entertainment, and high-tech to replace jobs lost in construction and
defense industries.

The US GDP was $6.8 trillion at the end of 1995. If growth is two
percent per year, then GDP increases by about $100 million per month.
US exports of goods were about $750 billion in 1995, and imports were
about $870 billion.

Over the past 20 years, by any measure, inequality in the US has
increased--the median income of US families in real dollars fell from
$29,900 in 1989 to $27,100 in 1993, or 3.25 times the poverty level
in 1989, and three times the poverty level in 1993.

Four major explanations have been advanced: technological change
that raised wages for educated workers and reduced them for workers
without a high school education; the shift to a service economy,
where the spread in wages is greater than in manufacturing; increased
trade, pitting US manufacturing workers more directly against lower
wage workers abroad; and increased immigration, which puts downward
pressure on wages at the bottom of the US job ladder. There is
widespread disagreement about the percentage of inequality explained
by each of these factors.

One recent poll reported that two-thirds of Americans blame trade
and immigration for stagnant wages and rising inequality.

R. Drummond Ayres, "California's economy shows signs of regaining
glitter," New York Times, December 19, 1995. James Bornemeier, "Study
paints positive picture of immigration," Los Angeles Times, December
11, 1995. "Hispanic employment rate lagging behind economy," San Jose
Mercury News, November 19, 1995.

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