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U.S. Industrial Transformation and New Latino Migration

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U.S. Industrial Transformation and New Latino Migration

Two important trends characterize the migration of Latinos to the United States today. First, the total Latino population has actually expanded at a faster rate in rural areas than in urban areas, in contrast with past patterns of settlement in cities. Second, half of all rural county Latinos now live outside the Southwest, where for centuries the largest concentrations of Latinos had settled.

This sweeping change in Latino migration has affected and been affected by the United States' ongoing industrial transformation, most notably in the meat-processing industry. The following analysis tracks changes in that industry, and may shed light on wider forces driving Latino migration, as well as the challenges this migration presents for policy makers and communities.

Table 1: U.S. States with fastest growing nonmetro Hispanic populations, 1990-2000

Source: calculated using 1990 and 2000 census data, SF1 files.

Changing Industry, Changing Migration

Like companies in several other U.S. industries in the past two decades, rural-based meat processing firms found themselves facing an increasingly educated domestic workforce that had greater employment options resulting from extended macroeconomic growth (see sidebar). While meat-processing wages remain relatively high compared with those of low-skilled employment in other industrial sectors, they also entail hazardous working conditions. Given the increasing demand for value-added food products from an ever-expanding population, larger plant sizes in increasingly rural locations, stagnant or declining real wages, and high employee turnover, meat-processing plants encountered difficulties in filling the demand for local workers. Moreover, the food-processing industry was becoming more and more competitive and price-sensitive, with improvements in profit margins measured in fractions of a cent. Because of difficulty or inability to locate local workers, managers gradually began recruiting foreign-born workers.

Links to Migration: The Changing Meat-Processing Industry
In many cases, new ethnic diversity in rural areas outside the Southwest coincides with or results from economic restructuring and associated labor force transformations. Such changes include increasing divisions between high and low-skilled employees and declining union influence. Outcomes often include stagnant or declining real wages and benefits, growing economic inequality, and a shift in economic risk from employers to employees accompanied by increasing employment instability.

Restructuring in the meat-processing industry has yielded these types of labor market outcomes. Despite variation among beef, pork, and poultry producers, a consistent sequence has appeared: 1) changing consumer preferences favoring greater value-added production; 2) industry consolidation and vertical integration, leading to larger firms; 3) relocation of production facilities to rural areas (see Table 2); and 4) declining relative attractiveness of meat-processing jobs.

Transformations in the poultry industry are particularly illustrative. In the 1950s, poultry producers adopted new technologies that precipitated steady declines in poultry prices relative to beef and permanently altered Americans' eating habits over the next several decades (see Figure 2). Increases in women's labor force participation in the 1960s, growing preferences for pre-prepared food, fast food marketing of poultry, and increased poultry exports, all contributed to greater poultry consumption. The industry responded by adding "further processing" operations, increasing processing plant sizes, and vertically integrating the entire production process. The result was substantial control of production, from start to finish, of large quantities of uniformly sized animals that could be processed quickly in mostly mechanized plants. Such transformations have produced an industry dominated by a handful of large and more technologically sophisticated firms (see Figure 3).

While working conditions have improved modestly over the past several decades, poultry processing remains a relatively hazardous and unpleasant occupation. Moreover, despite ever-increasing labor demand, average real poultry industry wages remain relatively unchanged since 1970. Consequently, as educated and experienced workers find more attractive and remunerative employment options elsewhere, the meat-processing industry has been employing increasing numbers of foreign-born workers. Industry critics contend that such employment practices constitute a concerted strategy to depress wages and benefits, while industry officials argue that fierce competition and labor shortages in rural areas leave them few other options.

Coinciding with this growing competition for workers, particularly in the booming tourist and retirement destinations of the Southeast, came an increase in the Latino proportion of the meat-processing industry's workforce. The Current Population Survey (CPS) data in Figure 1 show the Latino workforce proportion increasing from eight to 35 percent since 1980 (see Figure 1). Over the same period, the proportion of non-Latino whites declined from 76 to 41 percent, while that of blacks increased from 15 to 21 percent. The increasing proportion of Latinos and blacks occurred as absolute numbers of meat-processing workers were increasing, which suggests that the two groups may have been competing for the same low-skilled jobs. In addition, because CPS data historically undercount foreign-born persons who are reluctant to answer government surveys, the Latino component of the workforce shown in Figure 1 is most likely a conservative estimate.

These changes overlapped with—and to some extent may have helped spur—two important trends affecting the Latino population in this period. First, as shown in Census 2000 data, the extraordinary expansion of the rural Latino population exceeded urban Latino population growth and the growth of rural residents of all other racial and ethnic groups (see Table 1). Second, in 2000, for the first time in U.S. history, half of all rural county Latinos lived outside the Southwest. By the end of the 1990s, Latinos still represented only 5.5 percent of the entire nonmetropolitan county population but accounted for over 25 percent of its growth during the decade. Such growth was not geographically isolated; in rural counties, Latino population growth exceeded that of non-Latinos for every state except Hawaii. While relatively small in terms of absolute numbers, the Latino population's high growth rates in Midwestern and Southeastern states mirror significant industrial transformation and portend equally significant demographic and social change.

Latino population growth in rural areas can occur because of migration and natural increase. Migration, either from other countries or other parts of the United States, is often a response to economic conditions as well as information about employment opportunities that passes through highly effective social networks. Natural increase also results from international migration, which tends to be undertaken by young people about to form their own families, rather than older people not at risk of having children. In addition, Latino fertility rates (2.4 births per woman) in the U.S. are higher than those of all other racial and ethnic groups, including blacks (2.0) and non-Latino whites (1.8).

Latino population growth has increased significantly since the mid-1960s as a result of family reunification and country preferences outlined in the 1965 amendments to the Immigration and Nationality Act. However, in the past several decades, the abovementioned changes in industrial composition have also significantly affected population growth, especially in rural areas. Moreover, low-income neighborhoods in many traditional urban destination cities (such as Los Angeles, Chicago, and Miami) often present high barriers to successful settlement, such as expensive housing, high crime rates, and substandard schools. As recent migrants acquire information about employment opportunities elsewhere and extend their employment spells in the U.S. because of greater restrictions to frequent international migration, they are more likely to select alternative destinations.

These demographic changes raise important policy concerns related to recent Latino population growth in new rural destinations outside the Southwest. For some rural areas experiencing decades of gradual population decline, population growth brings positive impacts by generating new economic activity and greater government fiscal support. Yet immigrant population growth also challenges municipalities to meet increased demands for social services, particularly for persons with limited English proficiency. While immigrants typically occupy relatively less desirable low-wage jobs and pay their full share of taxes, their presence may depress the wages of native-born residents. Such mixed outcomes invariably create tensions. On the one hand, plant owners and economic development proponents tend to favor the economic benefits of Latino population growth. On the other, local residents frequently are wary of public expenditures, perceived or real competition for jobs, and influxes of neighbors of other races, languages, and faiths. Moreover, once immigrants have established themselves, they often support other immigrants from their home communities, fostering additional population growth.

Figure 1: Racial/Ethnic Composition of Labor Force in Meat Processing, 1980-2000

Source: Current Population Survey, 1979-2001, three year averages.

Table 2: Nonmetropolitan County Employment in Meat Processing, 1981-2000
  Total number of meat processing employees Percent in nonmetro counties
  1981 2000 1981 2000
Northeast 31,882 26,745 14% 13%
Midwest 117,417 162,370 45% 58%
South 115,856 225,026 66% 76%
Northwest 9,262 12,207 30% 51%
Southwest 44,194 63,785 27% 35%
TOTAL 319,336 490,621 46% 60%
Figure 2: Total U.S. Meat Consumption, 1970-2000

Source: MacDonald, James, Micheal Olinger, Kenneth Nelson, and Charles Handy. 2000. "Consolidation in U.S. Meatpacking." Agricultural Economic Report 785. Washington, D.C.: Economic Research Service, USDA.

Figure 3: Shipment Value Produced by Meat Processing Plants with 400+ Employees, 1963-1997

Source: MacDonald, James, Micheal Olinger, Kenneth Nelson, and Charles Handy. 2000. "Consolidation in U.S. Meatpacking." Agricultural Economic Report 785. Washington, D.C.: Economic Research Service, USDA.

Conclusions

Emerging patterns of Latino settlement appear to be increasingly responsive to industrial transformation over time. This contention is supported by data for other economic sectors that have undergone similar industrial transformations, such as agriculture, construction, and numerous durable and nondurable goods-manufacturing industries. While such data by themselves do not prove that structural change causes Latino population growth, they are clearly consistent with that causal relationship. As rising education attainment leads to better-paid employment options for the general population, manufacturing firms that do not or cannot relocate production overseas may adopt strategies to create similar fiscal conditions in the U.S. through the increasing employment of foreign-born workers.

Two sets of policy implications emerge from this data. First, industrial transformation often implies a corresponding growth in employment paths with relatively limited prospects for occupational and economic mobility. Growing proportions of Latinos in such transforming industries and accompanying rapid Latino population growth often foreshadow expanding socioeconomic inequality, a serious policy issue given the considerable growth rate and size of the "second generation" of native-born Latinos. Second, on a more immediate time-horizon, industrial transformation often signals the growth of local and regional Latino communities, particularly in rural counties that may be unprepared to address their social service needs.

Prepared for publication by the Migration Policy Institute, based upon a presentation at the 2003 Annual Meeting of the Population Association of America, Minneapolis, MN, May 1-3. Please address comments to William Kandel, ERS, 1800 M Street, NW, Room S2056, Washington, D.C. 20036, (202) 694-5021, [email protected].

DISCLAIMER: The views expressed in this article do not represent those of the Economic Research Service or the U.S. Department of Agriculture.