An ag economist expects labor shortages to continue for the foreseeable future. Nick Paulson, with the University of Illinois, says labor is in short supply with fewer people in the workforce compared to pre-pandemic levels. “The outlook from our perspective is that’s probably not something that will change or adjust quickly, and we’ll continue to be operating in a tight labor market,” he says.
The unemployment rate has declined back below five percent, which he says is higher than the years leading into the pandemic, but is a low level by historic standards.
As inflation has caused costs to increase, Paulson says wage increases have also not kept pace.
“So, this is an increase in nominal wages but probably a negative real wage growth when you include the effect of higher prices,” says Paulson. Where applicable, he expects labor issues to speed up the adoption of robotics to meet worker shortages.
During a virtual Illinois Farm Economics Summit, a poll of approximately 200 participants found about half of ag firms needed more workers but were not yet desperate.
EDITOR’S TAKE:
Agriculture overall, including farmers/ranchers, is battling with labor shortages just like other sectors of the general economy in the U.S. Everyone from equipment dealers, ag retailers and coops to meat processors and food delivery companies are facing similar labor shortage issues. Couple low unemployment with a low labor participation rate and it becomes even more challenging to attract and retain qualified workers. Farmers/ranchers face additional challenges due to the demanding schedules and type of work performed in many instances.
As indicated by Paulson, this phenomenon will likely serve to accelerate the adoption of robotics and self-directed machinery on farms and ranches. Over time, this has already proven the case, but now the push will be on with even greater urgency. You can, however, count on one thing – agriculture will find a way around this challenge and come out the other side with even better results!
