per FTE in 1991. Among industry groups there were substantial differences in overall
levels of labor productivity, however, only flowering plant nursery firms showed a
different trend, with value produced per FTE increasing between 1987 and 1991. The
rate of decline in labor productivity after IRCA (1988-1991) did not appear to differ
from the rate prior to IRCA (1984-1987). Therefore, we conclude that IRCA did not
likely influence the trend already underway. The decline in labor productivity is
attributed to increasing competition leading to lower product prices in the industry.

Capital-Labor Intensity is an indicator of the balance of labor and capital resources
utilized. It was measured as the ratio of total managed capital (owned plus leased) to
employment (FTE). Assets and liabilities were evaluated at book value stated on
company financial statements, including investments in land, buildings, improvements,
equipment, and plant inventories. Leased capital assets in land, buildings, and
equipment were evaluated at current market value.


As shown in Figure 2,
capital-labor intensity
varied irregularly from
year to year, which may
reflect the changing
sample of firms. All
firms and profitable
firms had similar levels
for most years of the
study period. For all
firms, capital managed
per employee increased
slightly from $74K in
1984 to $80K in 1987,
then declined to $62K
in 1990 before
rebounding to $83K in
1991. Profitable firms
also showed a
significant rebound in
capital managed per


Figure 2--Capital managed per worker (FTE).
owned and leased capital.


Capital managed included


employee in 1991 following a period of general decline during 1988 through 1990.
The pattern of trends was apparent for all industry groups. Field nurseries had higher
levels of capital managed per FTE, reflecting their greater mechanization and lower
labor intensity with respect to capital as well as production space.

Labor Costs are perhaps the most important indicator of trends in labor economics.
In this analysis, labor costs included all wages, salaries, payroll taxes, and fringe
benefits for all employees. To remove effects of varying firm sizes, labor costs were


 100
 All ffrms -
 Highly profitable firms- -
 90





 FE
 I \I


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 \ I*



S 60 I \ '


 1984 1985 1986 198B7 198S8 1989 1990 1991
 Year