In states where small farms pay unemployment, farm workers tend to find better jobs

Agricultural workers from small farms that do not provide unemployment insurance spend fewer weeks unemployed and often take jobs that earn less than other workers when they are rehired, says a new study from North Carolina State University. "Displaced workers from states like North Carolina that do not require small-farm employers to purchase unemployment insurance spend 4.6 fewer weeks unemployed and then earn 9 percent less than displaced manufacturing workers," says Newswise, a research-reporting service.

The study reports displaced agricultural workers in states that do require small farms to have unemployment insurance have experiences similar to those of manufacturing workers; both are able to use their unemployment benefits to find jobs that are better matches and have higher salaries. "Workers look for good matches when re-entering the workforce, but job searches take time," said Dr. Ivan Kandilov, assistant professor of agricultural and resource economics and a co-author of the study. "Workers with unemployment insurance are able to take the time to find a better match, which usually means a better salary. If you don’t have unemployment insurance, you need to get back to work faster. So you wind up taking a worse match, which usually means a lower salary."

The study was published in the April 2010 edition of American Journal of Agricultural Economics. "It examined data from the 10 states with the most agricultural employees through the Displaced Workers’ Survey, a large labor survey that is part of the Current Population Survey," says the release. The findings were similar when Hispanic and seasonal workers were removed from the data, suggesting unemployment was the key factor, not seasonality or legal status.

"Federal regulations require purchase of unemployment insurance if employers pay cash wages to employees of $20,000 or more in any calendar quarter or they employ 10 or more workers on at least one day in 20 different calendar weeks in the current or preceding year," the release says. States can impose additional requirements. (Read more)