John Phipps: Is Rural America Now The Epicenter Of Today's Labor Woes?


By U.S. Farm Report

via AgWeb - July 27, 2022


From Scott Emich in St Peter, MN:


ďIn rural America every 40 miles or so there is a manufacturing plant for a national business.† How are the small independent businesses that are the grain elevators, welding shops, independent seed dealers, local Co-opís, etc.† going to continue to be able to find labor at the wages that they can pay?† There is going to be a big discrepancy between the national businesses and the locals in pay scale. I fear even more for the small-town main street.Ē


Great question, Scott. Like you I see evidence of this all over my county. We have some light manufacturing in the single town of size (9000), and every one has a sign or ad about hiring. Some fast-food outlets are not opening the dining rooms due to lack of personnel. Finding help is also a constant gripe among farmers. But this is not so much about being rural, but rather being at full employment.


While economists bicker about the definition of full employment, at 3.6% we canít be far away. The idea there is a pool of slackers sitting and drawing government aid is inaccurate. At worst, this pool is no bigger than it ever was. Labor force participation is 82.6%, the best since 2019.


Total employment is 158 million, the same as before the pandemic. Meanwhile, real wages (which have been adjusted for inflation) continue to drop, suggesting there is no compelling demand for labor. Rural employment faces some unique issues, however...