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Labor Dynamics and Supply Chain Disruption in Food Manufacturing

In: Risks in Agricultural Supply Chains

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  • A. Ford Ramsey
  • Barry Goodwin
  • Mildred Haley

Abstract

Food manufacturing and processing is an important link between agricultural producers and consumers in the agricultural supply chain. The food manufacturing sector in the United States is both increasingly mechanized and increasingly concentrated. Consequently, labor risks in food manufacturing have changed over time with changes in industry structure. Labor risks were highlighted by the COVID-19 pandemic - particularly in the animal slaughtering and processing industry - where labor-driven disruptions resulted in temporary plant closures. We use county-level data on employment in food manufacturing and dynamic panel models estimated via generalized method of moments to examine employment and wage dynamics in the food manufacturing sector and animal processing industry. We then compare forecasts from the estimated models with changes in food manufacturing and animal processing employment and wages during the onset of the COVID-19 pandemic. Our results provide insight into the role of operational and disruption risks in food manufacturing. We find significant delays in adjustment to employment and quicker adjustment in wages. Although there is an unanticipated drop in employment in food manufacturing and animal processing in April of 2020, employment returned to predicted levels within two to three months. The response of wages and employment to the COVID-19 pandemic suggest a degree of resilience in food supply chains.
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Suggested Citation

  • A. Ford Ramsey & Barry Goodwin & Mildred Haley, 2021. "Labor Dynamics and Supply Chain Disruption in Food Manufacturing," NBER Chapters, in: Risks in Agricultural Supply Chains, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:14611
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    1. Joe Piacentini & Harley Frazis & Peter B. Meyer & Michael Schultz & Leo Sveikauskas, 2022. "The Impact of COVID-19 on Labor Markets and Inequality," Economic Working Papers 551, Bureau of Labor Statistics.
    2. Christopher N. Boyer & Dayton M. Lambert & Charles C. Martinez & Joshua G. Maples, 2023. "Beef and pork processing plant labor costs," Agribusiness, John Wiley & Sons, Ltd., vol. 39(3), pages 691-702, July.

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    More about this item

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco

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