TY - JOUR
T1 - Food system labor and bargaining power
AU - Richards, Timothy J.
AU - Rutledge, Zachariah
N1 - Funding Information:
The authors gratefully acknowledge funding from the Agricultural and Food Research Initiative, National Institute for Food and Agriculture , grant no. 2018-08554 and USDA Economic Research Service cooperative agreement no. 58-3000-0-0045 . All conclusions remain the authors and do not reflect the official position of the USDA.
Publisher Copyright:
© 2023
PY - 2023/8
Y1 - 2023/8
N2 - Historically, pandemics lead to labor shortages, and the COVID-19 pandemic of 2020-21 proved to be no different. While there are many explanations for supply-chain issues reported in a number of industries, the proximate cause for ongoing problems in producing, processing, and delivering food to consumers has been attributed to a lack of labor. If this is the case, then the apparent shortage is likely to manifest in greater bargaining power by workers in the food and agriculture industry, defined generally, during the COVID pandemic. In this paper, we test whether the COVID-19 pandemic is associated with greater bargaining power among food and agriculture workers using a structural model of labor search-and-bargaining, and examine the effect of policy responses to COVID-19 on labor-market outcomes. Using data from the American Community Survey (ACS, Bureau of Census) for wage outcomes in 2019 and 2020, we find that the COVID pandemic was responsible for a 5.7% increase in bargaining power for employed workers. Our counterfactual simulations examine the impact of two labor-market interventions – minimum-wages and unemployment insurance – on equilibrium wages. We find that lower minimum wages leave more employment surplus to employers, allowing them to bid up equilibrium wages, while more generous unemployment insurance reduces the supply of labor, and increases equilibrium wages.
AB - Historically, pandemics lead to labor shortages, and the COVID-19 pandemic of 2020-21 proved to be no different. While there are many explanations for supply-chain issues reported in a number of industries, the proximate cause for ongoing problems in producing, processing, and delivering food to consumers has been attributed to a lack of labor. If this is the case, then the apparent shortage is likely to manifest in greater bargaining power by workers in the food and agriculture industry, defined generally, during the COVID pandemic. In this paper, we test whether the COVID-19 pandemic is associated with greater bargaining power among food and agriculture workers using a structural model of labor search-and-bargaining, and examine the effect of policy responses to COVID-19 on labor-market outcomes. Using data from the American Community Survey (ACS, Bureau of Census) for wage outcomes in 2019 and 2020, we find that the COVID pandemic was responsible for a 5.7% increase in bargaining power for employed workers. Our counterfactual simulations examine the impact of two labor-market interventions – minimum-wages and unemployment insurance – on equilibrium wages. We find that lower minimum wages leave more employment surplus to employers, allowing them to bid up equilibrium wages, while more generous unemployment insurance reduces the supply of labor, and increases equilibrium wages.
KW - Bargaining power
KW - Food system labor
KW - Search-and-matching
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U2 - 10.1016/j.foodpol.2023.102502
DO - 10.1016/j.foodpol.2023.102502
M3 - Article
AN - SCOPUS:85166664649
SN - 0306-9192
VL - 119
JO - Food Policy
JF - Food Policy
M1 - 102502
ER -