Date

3-2010

Degree Name

BS in Agricultural Business

Department

Agribusiness Department

Advisor(s)

Carol Sexton

Abstract

Agriculture is an essential part of life in the United States due to the fact that everyone needs to eat. And, being that many commodities within agriculture, such as apples, are very labor intensive, the people that work in the industry are also very important. But while these laborers, many of who are legal or illegal immigrants from Mexico, are important to supplying Americans with food, many are compensated at a wage at or around the amount required by federal law. Since the apple industry is so labor intensive, discussions have been raised about how much the cost of labor affects the price of the fruit. In order to test the hypothesis that labor only minimally affects the retail price, the Leontief Input-Output Model, which uses a matrix representation of a nation’s economy, was used. When all of the variables, such as import price and total pounds of apples produced per year, were plugged into the equation, it was possible to calculate by how much laborers wages affect the price. The results of the model concluded that an increase in the minimum wage of farm workers would only slightly increase the retail price of apples for every dollar added to the hourly wages.

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