Beef and pork processing plant labor costs

Abstract

Federal and state legislators recently enacted policies to fund new and renovated small and local meat processors expansion with the aim of increasing the meat-processing sector's resiliency. Wages must be competitive to attract employees for these new and renovated plants to be competitive. No previous studies have examined what has happened to employee labor costs at United States (US) meat-processing plants since the early 2000s. This study estimates how meat-processing firm size affects employee wages in the US. We use average employee wages for beef and pork processing plants from 2007 to 2019. We find larger plants pay higher wages than smaller ones, which is likely attributable to lower fixed costs resulting from economies of scale. Findings suggest that facilities with more than 500+ employees will most likely offer wage that are high enough to recruit workers in for this industry. Small plants will need to increase real wages that are higher than historical averages. Thus, if smaller facilities increase the sector's resiliency, then it will likely come at a cost in terms of higher wage bills. [EconLit Citations: Q12, Q18].