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History Signals Slower Recovery for Industrial Workers

September 19, 2012 By Lee Egerstrom, Economic Development Fellow

Back in the early 1920s when the Great Depression had already set foot in rural America, Minnesota Gov. J.A.O. Preus and six other Midwest state governors convened a National Wheat Conference in Chicago to discuss what government could do to counter economic problems hammering the countryside and farm prices.

Industrial America may be in a similar situation today. Unemployed and underemployed workers are painfully aware of the slow, or “jobless” recovery that has followed the 2007-2009 Great Recession. What agricultural educators note and most other Americans forget is that the farm depression lasted form 1920 to 1941, much longer than the Great Depression for the nation. Are today’s working people facing a similar fate?

Agriculture offers lessons for modern Minnesota and modern American industry, said Tom O’Connell, a labor historian and sociologist at Metropolitan State University in the Twin Cities.

That makes the Chicago wheat conference worthy of note. “More than ten million men, women and children of the United States are directly interested in the production of wheat,” Preus and the governors declared in calling for the summit. It was reported in the July 2, 1923 edition of Time magazine - 89 years ago.

Nick Kominus, a veteran Washington, D.C. journalist, former government information specialist, and trade association executive found the Time magazine article about Preus and passed it along. While currently researching a book on USDA history, Kominus thought the Minnesota connection and the sheer changes in demographic numbers might be of interest for Minnesota 2020 and its readers.

What’s especially telling is how science has replaced physical labor on farms, and what that might suggest is happening now in other industrial sectors.

Back in 1920, Census Bureau and other data show there were 31.6 million people living on farms of a total U.S. population of 105.7 million people. There were 6.4 million American farms, and farmers represented 27 percent of the U.S. workforce.

A combination of studies from Census, the USDA Economic Research Service, and the Labor Department’s Bureau of Economic Analysis finds the following contemporary data:

There were 2.1 million farms ranging from large commercial enterprises to small exurban hobby farms in 2011; only 45.1 percent of the farm operators declared themselves as primarily dependent on farm operations in the 2007 U.S. Census of Agriculture, and the Labor Department’s bureau found people engaged in agriculture made up only 1.5 percent of the U.S. workforce in 2008.

Agriculture has gone through a huge transition. American manufacturing may be only midstream in such change.

The World Bank currently estimates that 40 percent of the global workforce is made up of farmers and agricultural workers. What happens when these agricultural land operators catch up with North America, European, South American and Oceanic-style agriculture physics (machines), biology and chemistry to displace farm and field workers?

“This is the dialogue that should be going on now,” said Metro State’s O’Connell. Up to 1.3 billion people by World Bank estimates may become accessible to cheap labor manufacturing once they are displaced by science on the world’s farms. This is consistent with the rural migration to cities and urban industrialization that has marked China’s development over the past two decades.

Anyone doubt outsourcing of American industry jobs to cheap-labor developing countries will continue in the future?

Steve Keillor, the Minnesota author (Cooperative Commonwealth, Minnesota Historical Society Press, 2000), historian and current adjunct professor of Minnesota history at Bethel University, said laborers probably should be looking at owning their own factories to build sustainable jobs and businesses, like they do in the Mondragon region of Spain. Then again, Minnesota history of such ventures doesn’t guarantee success.

Keillor noted that the former Knights of Labor union was a leader in developing this democratic capitalism with cooperage businesses. But coopers succeeded only in making the flour barrels for Minneapolis flour millers shortly before Minneapolis millers moved milling to Buffalo, N.Y., and other points closer to consumers. Then, canvas and paper packaging materials replaced barrels for storing and shipping bread and bakery flours.

Much of this election year's political rhetoric is based on putting things back in place as they were before the Great Recession (2007-2009). Looking back, Keillor said Minnesota’s cooperage business wasn’t a bad strategy, but it was terrible timing in the face of scientific changes hitting the industry.

For the present, O’Connell said public attention should focus on what changes are occurring to industry and manufacturing with an eye towards developing an industrial policy. Labor, the middle class, educators, and people who still have some influence on public policy should be looking at “where are we going,” he said. “That’s where we need a good dialogue.”

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