Tasks such as picking, pruning, or planting can be easily measured and tracked, making piece rates feasible. In these cases, productive workers can earn considerably higher incomes under a piece rate scheme than under an hourly wage scheme: Moretti and Perloff find that US agricultural workers paid by piece rate earn 26% more than their hourly counterparts. This number is slightly misleading, and certainly not causal, considering that workers select into particular work in part based on the compensation scheme. Rubin and Perloff note that piece rate workers tend to be disproportionately young or old: “[a]pparently, prime-age workers find that higher earnings in piece-rate jobs do not compensate for the difficulty of more intensive effort, more variable incomes, and possible greater injury risk or shortened farm-work career” . However,these selection issues are irrelevant if the goal is to understand how piece rates affect the productivity of workers who select into such work in the first place.Harvesting fresh blueberries is a labor intensive process. Berries grow in small bunches and ripen at differing times. This means that a single blueberry bush can be harvested multiple times each season. However, since each berry-bunch contains both ripe and unripe berries, pickers must harvest fruit carefully by hand. Mechanized blueberry harvesters exist, but they are imprecise and are used primarily for harvesting berries destined for the processing market.16 Berry-pickers collect fruit in small buckets fastened on the front of their bodies. Once the buckets are full, the workers carry their harvest to a weigh-station at the end of a field row. Workers pour their berries into standardized bins which are then weighed, packed into trucks, square plastic pot and driven to a refrigerated packing plant. Because blueberries are delicate and perishable, they must be refrigerated quickly after being picked.
When workers bring their berries to be weighed, a foreman closely watches the process to ensure quality control. If a picker’s fruit is intermingled with too many twigs, leaves, or unripe berries, the foreman will warn the picker that their quality must improve to keep their job. The farms I study both utilize an automated system to track workers’ productivity and calculate payroll. Each picker is given a unique barcode that they wear as a badge, and each fruit tray is assigned its own barcode as well. When a picker brings their fruit to be weighed, the weigher scans both the picker’s barcode and the tray’s barcode to record the tray weight. The picker then receives a receipt of their weigh-in. The farmer likes the barcode system because it is quick, automatic, reliable, provides real-time data, and replaces a cumbersome paper-and-pencil system. Pickers like the barcode system because they are able to witness the fruit-weighing and are thus confident that the farmer is paying them honestly for the fruit they pick. At the beginning of each work day, around 6:00 or 6:30 a.m., the farmer sets the day’s piece rate wage and posts the wage in a public spot for all workers to see. Workers are paid the piece rate for each pound of berries they harvest, and the rate does not change throughout the day. The piece rate does, however, change over the course of the season . As fruit becomes more abundant on the bushes through May and June, picker productivity rises. Farmers therefore generally lower the piece rate wage throughout the season as more and more berries ripen. Anecdotally, farmers say they lower their piece rates “when there’s a lot of fruit in the field” with the goal of maintaining a relatively stable effective hourly wage for the average berry picker. If any one worker picks a small enough quantity of fruit that their effective hourly wage for the day falls below the legal minimum wage, the farmer pays them according to the hourly minimum wage. In these cases, the farmer often then gives the picker in question additional training and a warning that they may be fired if they do not quickly improve.
Anecdotally, the hourly minimum wage is most likely to bind during a new employee’s first few days on the job as they develop their skills as a fruit picker. If a worker consistently falls below the minimum wage cutoff, they frequently quit on their own accord or are effectively fired and asked not to return the next day. Because blueberries are delicate and highly perishable, they are not bought and sold in a central commodity market. Instead, individual producers set short-term contracts with different marketers or buyers to provide a certain quantity of berries in particular packaging at a particular time. These contracts are set on a near-daily basis, and prices can change quickly throughout the season. While there is certainly some quality differentiation within the blueberry market, buyers and marketers view different producers as close substitutes. This means that individual producers have relatively little, if any, market power. I thus take California blueberry contract prices as an accurate reflection of a competitive market price for blueberries in the state. Blueberry prices in California are highly seasonal: prices are quite high at the beginning of the season in April, and much lower near the end of the season in June. This seasonality in price is largely explained by variation in aggregate production throughout California, and variation in the availability of blueberries from other global producers. In the early spring, the United States imports fresh blueberries at high prices from Mexico or other countries since domestic production is agronomically infeasible. By mid-to-late-June, farms in northern states such as Washington, Oregon, and Michigan begin to produce berries in large quantities, driving down the market price. California blueberry farmers therefore face a relatively short season when it is profitable to harvest and sell their fruit. While blueberry bushes continue to yield berries through June and into July, labor costs are too high relative to market prices at that time for California farmers to justify continued production. To summarize, the California blueberry season begins agronomically, but ends economically.
While the harvesting process is identical for conventional and organic berries, organic bushes produce fewer berries per bunch. Thus, pickers of organic berries spend more time finding and harvesting berries than do their conventional counterparts. Additionally, fruit quality is more variable in organic blueberries. This leads to a smaller proportion of berries ultimately reaching market.As described in the previous section, the farms I study use a digital fruit weigh-in system to track worker productivity and generate payroll data. I utilize data from these weigh-ins to conduct my analyses. In particular, I observe the weigh-in time, the berry picker’s unique employee identifier, the field where the berries were picked, and the weight of the picker’s harvest. I divide the harvest’s weight by the time elapsed since the picker’s previous weigh-in to obtain a weight-per-hour measure of worker productivity. For the first weigh-in of the day, I use time elapsed since morning check-in to calculate this measure. As reported in table 1.1, average productivity pooled across both farms is just over nineteen pounds picked per hour. This number, however, masks significant heterogeneity across farm, day, and worker. At the San Diego farm, which grows organic berries, average productivity is slightly under fourteen pounds per hour, while at the Bakersfield farm, which grows conventional berries, average productivity is over twenty-two pounds per hour. Figure 1.3 plots the distribution of workers’ average productivities, while figure 1.4 plots the distribution of each day’s average productivity, in both cases separated by farm. These two figures highlight substantial variation in picker skill, as well as in daily productivity. In southern California and the central valley, where the farms I study are located, temperatures peak in the mid-to-late afternoon. To avoid the hottest part of the day, most pickers begin work as early as 6:00 a.m. and end around 3:00 p.m. This pattern is reflected in figure 1.5: most fruit picking ends by mid-afternoon. The average picker works around eight hours each day, as shown in figure 1.6. Under California law in my sample period , 25 liter pot agricultural workers do not earn overtime pay until after working ten hours in a single day. In my data, only the San Diego farm ever lets pickers work more than ten hours in any given day. Farms employ pickers on a day-to-day basis, either directly or through a labor contractor. Some pickers only work for a day or two, but others work continuously for several weeks or months as shown in figure 1.7. A handful of pickers return to their respective farm each year. Indeed, several employees in my data work for a farm in two or all three of the years I study. Unfortunately, I do not observe each worker’s initial date of hire, so I am unable to confidently measure lifetime worker tenure on either farm.I utilize high-frequency temperature data sourced from the MesoWest database maintained by the University of Utah.
In particular, for each year, I find the temperature monitor closest to each farm with hourly or finer temperature readings. In order to protect the identity of each farm, I cannot share the precise locations of these monitors, but they are all between 1.2 and 14.8 miles away from their respective farm. Temperature readings are available at least hourly, with some available at fifteen-minute intervals. I match temperature observations to each “picking period” – the span between two of a worker’s sequential weigh ins – using a time-weighted average of observed temperature. Figure 1.8 describes in detail how I calculate this time-weighted average. By using individual picking periods as my unit of observation, and matching these periods to time-weighted temperature measurements, I am able to exploit variation in temperature throughout each work day that accurately captures the heat exposure faced by outdoor laborers at different points of their shift. Figure 1.9 displays the distribution of time-weighted average temperatures within my data. There are few observations with extremely high temperatures, largely due to the fact that berry pickers usually end work in the mid-afternoon, before the hottest part of the day.While I know each farm’s daily piece rate wage from the its payroll data, I obtain information on market prices for California blueberries from the Blueberry Marketing Research Information Center of the California Blueberry Commission . As an official agricultural commission, the CBC legally requires all blueberry producers in the state to report daily production and sales figures. The CBC then publishes daily summary statistics of these data through BMRIC. Individual blueberry producers are able to access a daily BMRIC report online that summarizes the high, low, and weighted average prices received by blueberry producers throughout the state on the previous day. Separate statistics are provided for conventional and organic blueberries. In order to capture the information a farmer could have accessed on any particular day, I use each day’s most recent previous BMRIC report as the relevant measure of market prices. Because BMRIC publishes a daily report each weekday except for holidays, the relevant market price data for harvest data collected on a Thursday is from the Wednesday prior. Similarly, the relevant market price data for harvest data collected on a Monday is from the Friday prior. Based on personal conversations, the blueberry farmers I study track these BMRIC reports quite closely throughout the season. From April to June each year, both market prices and piece rate wages fall as the California blueberry season progresses. Figure 1.10 documents this relationship across the three years and two farms in my dataset. Recall that the San Diego farm grows organic blueberries while the Bakersfield farm grows conventional berries. This distinction accounts for why the two farms face differing market prices in the same year. Market prices and piece rate wages are highly correlated over time, due in large part to seasonality in blueberry production. Figure 1.11 plots each farm’s daily total production over time for each season. At times of high production, blueberry bushes are likely to be full of easily-pickable ripe berries. This abundance of fruit leads farmers to cut the piece rate as described in the previous section. In order to disentangle the various factors that affect farms’ piece rate wages in my empirical exercises, I control both for seasonality in production as well as the field where berries are harvested.In my subsequent econometric analyses, I estimate the causal effects of piece rate wages and temperature on picker productivity.