Technological change and industrial restructuring in rural America in the 1990s
led some employers to demand more unskilled workers relative to skilled workers
(particularly males). Many of those unskilled workers were Hispanics who
now represent an increased share of the rural workforce due to the rapid
growth of the Hispanic population in the rural U.S. during the decade, especially
in the South and Midwest.
Recent ERS research found that shifts in labor demand significantly
affected wages for all rural workers regardless of gender and
skill level. Two types of changes occurred in labor demand over
the 1990s:
1) technological change or change in the skill mix of labor demanded
(unskilled, skilled, or professional), and 2) change in the total
labor demanded of each skill type. Changes in the skill mix favored
unskilled workers (not high school graduates) and to a lesser
extent professional workers (college-educated); but the change
in the
skill mix occurred in a small subset of rural industries. This
change positively affected the wages of unskilled workers in
those industries, broadly known to be service and manufacturing
industries.
On the other hand, larger changes in total labor demand strongly
favored skilled workers (high school graduates) and positively
affected skilled workers’ wages, especially for males.
Concurrent changes in the workforce due to the influx of Hispanics,
however, negatively affected the wages of skilled men. The wages
of other groups, such
as females and unskilled males, were not affected by the increased labor
supply of the Hispanic workforce. The results are not surprising
when considering
the large Hispanic population increases which occurred in specific regions.
Though the rural Hispanic population was small to begin with, it tripled
in more than a dozen States in the South and Midwest during the
1990s. Some rural
industries, such as meatpacking, were restructured in the 1990s, and many
of these industries now employ Hispanics as the majority of their
workforce. During
this period, the Nation’s share of Hispanics employed in agriculture
fell by 6 percent while the share employed in nondurable manufacturing increased
by almost 4 percent.
These results suggest that some rural service and/or manufacturing industries
hired unskilled labor as substitutes for skilled labor, but that this effect
is dwarfed by the larger increase in total demand for skilled labor occurring
in most rural industries. The integration of this new workforce presents challenges
to rural communities in terms of housing and public infrastructure, but it
also presents an opportunity to revitalize communities that have been losing
population.