Structure of Wages and Benefits in the U.S. Pork Industry

Pork production has been evolving from relatively small, family-run operations toward large-scale operations with several employees. This study uses a national survey of pork producers and their employees to answer several questions about the structure of wages and benefits in this rapidly changing labor market. The findings include: 1) wages do not differ across regions of the country but, instead, reflect differences in worker skills and firm size consistent with a nationally competitive labor market; 2) there is no evidence that large producers have market power in local labor markets that enable them to pay lower wages than competitors; 3) rather; large firms pay higher wages, offer better benefits, and safer working environments than smaller firms; 4) the wage premiums in larger firms seem to be partly explained by the greater use of skill-intensive technologies in large firms; 5) the remaining wage premium in large firms seems to be consistent with returns to scale that are partly shared with labor; 6) salary, benefits, and a sage working environment all contribute to worker job satisfaction so that firms offering better working conditions and benefits can pay lower salaries than competitors with fewer benefits or inferior working environments.