Economic Impacts of Mechanization or Automation on Horticulture Production Firms Sales, Employment, and Workers' Earnings, Safety, and Retention

Using a socioeconomic database collected by face-to-face interviews of nurseries and greenhouses, empirical models were estimated to measure the economic impacts of mechanization or automation on annual gross sales, annual employment, and workers' earnings, safety and retention. The survey was conducted among 215 randomly selected wholesale nurseries and greenhouses located in eight southern states from Dec. 2003 to Nov. 2009. The level of mechanization or automation (LOAM) observed among the participating wholesale nurseries and greenhouses averaged 20% of the major tasks performed by workers. Nurseries and greenhouses that reported greater annual gross sales demonstrated higher levels of mechanization, implying economies of scale associated with technology adoption by these wholesale horticulture production firms. The increase in total workers' earnings associated with improved mechanization indicated that nurseries and greenhouses were able to pay their workers higher wages and salaries. The increased levels of mechanization produced neutral effects on employment and raised the value of the marginal productivity (VMP) of labor, implying that technology adoption by wholesale nurseries and greenhouses did not displace any worker but instead improved total workers' earnings. Growers that reported higher levels of mechanization hired fewer new workers with basic horticultural skills, especially among horticultural firms which operated both nursery and greenhouse enterprises. The length of training period for basic horticultural skills was not influenced by the level of mechanization, but was significantly extended when nurseries or greenhouses hired more new workers without basic horticultural skills. The number of work-related injuries increased as a result of improvements in mechanization, which primarily consisted of back strains, cut fingers, shoulder and ankle strains, and eye injury. The workers' retention impact (WRI) of the level of mechanization turned out to be neutral or indeterminate since almost all of their workers were with them during the past 2 years before conducting the interviews. Overall, advances in mechanization or automation generated enhancing effects on the annual gross sales of horticultural production firms, enabled them to retain and pay better wages for their workers, hired fewer new skilled workers, and reported more work-related injuries.