UNDEREMPLOYMENT OF RURAL FAMILIES

PART I

PROBLEM AND SUMMARY

At the beginning of this inquiry the chairman of the Subcommittee on Low-Income Families wrote the heads of the departments of agricultural economics in each of the land-grant colleges and a few other colleges and universities that the subcommittee, as part of its general investigation of the problems of low-income families, would ike to obtain such materials on low-income rural families as were available in agricultural colleges and universities. The three questions asked were:

1. If there are areas in your State where low-income, open-country rural families are underemployed, please indicate the underlying causes.

2. What steps can and should be taken to increase the contribution each type of low-income rural family can make to the national economy in the long period of defense mobilization ahead?

3. Who, if anyone, has been active in improving the employment opportunities and production of these low-income families?

The Nation-wide character of the problem of rural underemployment is clearly demonstrated by the fact that the subcommittee received replies to these questions from respondents in 37 States, together with copies of a number of valuable local studies. These replies, summarized in part III of this report, present not only the observations of individual agricultural experts but, in many cases, a consensus of the entire staff working on problems of agricultural economics and rural sociology. They naturally exhibit considerable rezional variation in the nature of the problem as well as divergence of analysis. But all agree that there is a large amount of rural underemployment and low productivity that in essence constitutes our point 4 problem at home.

While the replies will be summarized later, many give such vivid local color and concreteness to the problem as to warrant sampling three of them at this time. Thus a respondent from the State of New York states the problem there in the following terms:

There is no doubt that underemployment exists among open-country residents in some parts of New York State. Underemployment is most evident in agriCaturally submarginal areas located beyond reasonable commuting distance to farm employment. These areas are widely scattered. They are not large idually, but include in the aggregate a group of people worthy of considerMany of the open-country unemployed are of the agriculturally disinheritedthey and the land they are on have been technologically displaced. Land and Pple move slowly out of agriculture. A man seldom leaves farming once he become established, even though his income may be very low, unless, of e, he actually loses his farm by foreclosure. Most of the movement out of aculture comes between generations. Even then it is slowed by the difficulty

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many young people meet in trying to get adequate training for reasonably remunerative nonfarm employment; slowed, also, by lack of information about nonfarm job opportunities and by a failure to understand the forces that have and will continue to push rather large numbers of farms in this State below the margin at which they can support a reasonable level of living. There seems always the possibility that if the old farm were farmed as it should be it would be as good as any. They lack a grasp of the nature of the technological-limited-marke squeeze that is slowly but very persistently shifting competitive advantages in favor of the farms that have the strongest physical resources.

The problem in other areas looks much different. This is interestingly shown by an excerpt from the reply made by a group of agricultural economists and rural sociologists on the staff of one of the educational institutions in the State of Virginia. They state:

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* * * we have low-income, open-country rural families which are underemployed in most regions of the State * * such conditions are more pronounced in the Piedmont section and in some of the mountain areas. The underlying causes seem to be:

(a) The lack of educational opportunity to acquire sufficient training to become a skilled worker or satisfactorily operate modern machinery and equipment i industrial plants.

(b) The lack of employment openings in industrial and service work.

(c) The agricultural policy programs which ration the right to produce certain commodities, such as tobacco, cotton, peanuts, etc., have apparently encouraged people to remain on small marginal to submarginal farms and accept under employment in an effort to eke out a living from the land, rather than seek alternative opportunities elsewhere.

(d) Undoubtedly many of the underemployed have a rather limited native ability and would, therefore, constitute a problem in most any case.

(e) It has been our observation that people are, to a great extent, creatures o habit and are, therefore, reluctant to break the ties of local environment and take the necessary risk to launch out for other employment. There is also a element of inability in many cases to get together the necessary money to tid over such a transition.

Alternative solutions for rural underemployment in particular areas are concretely and graphically described in this excerpt from a study of a community in the hardwood region of the southern Appalachian highlands-the quicksand area of eastern Kentucky:1

For two decades and more the economy of the quicksand area has failed t support itself. Many local people expect this situation not only to continue bu to become even more pronounced. There are, indeed, numerous factors operatin to this end. Population has a strong tendency to increase. The excessive period labor demands of the subsistence-farming units bind the people to the area at th critical seasons. Workers are inclined to leave their families at home, wher there is security and a sure, though small, livelihood, while they go out alone t work. These and the other powerful roots that the people have sunk into the home soil deter their migrating from the area more than temporarily.

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A symptom of the subsistence economy is underemployment. Working mem bers of the farm families are employed in part outside the land economy and i part in harvesting and processing timber products. Farm work fails to occup the other, major, part of their time. In 1940, the average worker was unemploye about 100 working days on which the weather was suitable for outdoor labo This large underemployment on farms results from the very unequal spread o farm-labor requirements over the year and from the fact that the worker continue to apply his labor to the land only up to that point where his marginal produc has a value to him at least as great as the value of leisure. On land of such po quality, this point is reached long before the worker has used all his available tim As a consequence, much time is spent in leisure. Front porches are frequent occupied at hours of the day when in other regions they would be deserted f the fields. This does not mean that the people of the area are lazy or uncommon leisure-loving. On the contrary, they continue their work upon resources f 1 Kentucky Agricultural Experiment Station Bulletin 507, pp. 53-55.

beyond the point which most workers would regard as too unrewarding for the .fort.

Failure to use improved resource-management practices is a fundamental part f the subsistence organization. In farming, units are limited to small size by the existence of high peaks of labor demand, so that the family is able to produce gly a small acreage of crops and a few livestock, principally for home needs. Labor peaks are heightened by the necessity for using poor land and by the high stor-intensity of the practices followed; nor is it usually economical to hire additional labor, even at the low wage rates that prevail locally, to lighten the family's work burden at the peaks, so poor is the quality of the additional land at would be brought into use under such a system. Furthermore, failure to tre labor, as well as initial failure to use improved farm-management practices, stars in large measure from the smallness of the family's cash income, which tends to perpetuate practices requiring a minimum cash outlay.

Out of the analysis of four alternative economies in the quicksand area, one conclusion, above all, appears: that, barring the emergence of entirely new resources, there are primarily two courses of development open to the area, courses "at are approximately opposite in their causes and in their effects upon the living of the people. One course is toward denser population, lower incomes, greater subsidy, the use of more cleared land for farming, and less forest: a subsistence economy. The other course is toward sparser population, higher incomes, less ssidy, less farm use of land, and more forest: an exchange economy (table 1). This Kentucky study is of major interest, furthermore, because it is one of the few to show in concrete measurable statistical goals what it is that needs to be done to remedy the problem of rural underemployment. In the table below, note that by moving over half of the population off the farm and increasing the percentage devoted to forest land, cash net income per family is increased sevenfold and Government subsidy reduced to zero.

TABLE 1.-Land use and population in 1940 and land use, population, employment, and income under the four assumptions, quick sand area, Kentucky

SUMMARY OF EXTENT OF RURAL UNDEREMPLOYMENT

1. Out of a total of 5,859,000 farm-operator families there are approximately 1,000,000 full-time able-bodied farm operators whose total

value of farm production, including farm products used in the home was under $1,500 in recent years. (Adjustment for underreporting of income might increase this limit to $1,800.)

Families on these farms had an average value of products produced including farm products used in the home, of $867. Workers on these small-scale farms are only one-third as productive in terms of sales per man as workers on the medium-sized commercial family farms (See pp. 13-14.)

2. There are approximately 600,000 full-time operators (with minimum of outside employment or income where both husband and wife are present, operator able-bodied and of working age) whose tota farm production, including farm products used in the home, wa between $1,500 and $2,500. (Adjustment for underreporting might increase these limits to $1,800 and $3,000.)

Workers on these small farms are only 60 percent as productive a workers on the medium-sized commercial family farms. (See p. 16.)

3. There are approximately 400,000 families on part-time farms husband and wife both present (operator able-bodied and of working age) where the combined farm and nonfarm income in 1944 wa $2,000 or less.

Workers in these families are only 50 percent as productive (ear incomes only 50 percent as large) as the average or typical rural non farm family. (See p. 17.)

These three groups of farm families make a total of 2,000,000 o over one-third of all farm families who are underemployed." The produce less than half as much each as families on medium-sized family farms. Full employment of the workers on these farms a average rates of production would add the equivalent of 1,600,00 workers to our total working force.

4. There were approximately 1,500,000 rural nonfarm families (non farm families living in the open country or in towns of 2,500 popula tion or less with family head of working age) who had family income of $2,000 or less in 1948.

In terms of income earned the workers in these families are onl 60 percent as productive as the workers in the average rural nonfarn family. Full employment of the workers in these families would ad approximately 900,000 workers to the effective labor force.

5. There are approximately 1,200,000 male hired wage worker whose main activity is farm work. These hired wage workers wer employed an average of 218 days at farm work and 14 days at nonfarn work in 1949 and earned an average of $980. Approximately hal are married. (These families are in part included in the nonfarm families and are not included as a separate group in the statistica summary.)

Underemployment among farm wage workers is a special problem Partly because of days not worked and partly because of inefficien employment, these workers appear to be only about half as productiv as workers on medium-sized commercial family farms.

If the workers in these five groups of rural families could be employe at jobs where they would produce as much as the average worker on the

The basic data throughout this report were taken from the 1945 agricultural census. The major chang which has occurred since 1945 is a general rise in all farm prices and incomes of around 25 percent. Data from the 1950 census were not available at the time this study was made.