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US and CA Farms and Hired Labor Expenses, 2012

US and CA Farms and Hired Labor Expenses, 2012
 

October 2012 Volume 18 Number 4

Labor Shortages, Congress


California farmers reported labor shortages in summer and fall 2012. FLC Brad Goehring in San Joaquin county said 2012 is "the worst year that I've ever experienced in labor," with 40 percent fewer workers than desired. Some coastal strawberry growers reported that workers who can earn more harvesting tree fruit are leaving for the San Joaquin Valley, forcing them to scramble for pickers who are quick to jump to other growers who offer higher piece rates or better yields.

Farmer comments demonstrated weak links to seasonal workers. Peach farmers around Marysville, California in July 2012 said: "Usually, each year the migrant workers show up. This year we keep thinking maybe they'll show up tonight, maybe they'll be here tomorrow morning. Nobody's really showing up yet." Growers of cling peaches that are often canned typically pay $16 to $20 per 1,000 pound bin to pick peaches, and say that a "good worker" can pick five to seven bins a day.

Word of a shortage of peach pickers attracted 100 local applicants. However, peach growers said that, without experience, local workers could not pick fast enough at the piece rate they offered to earn the minimum wage.

Manuel Rios, owner of the 200-employee Rios Farming Company in St. Helena, said that seasonal workers normally show up in September seeking jobs. He said: "This year we haven't had any people show up. We've had to go out and find them." Rios pays $10 an hour to start.

In August 2012, raisin growers said that contractors were warning them of fewer workers. Wineries were offering $325 a ton for the Thompson Seedless grapes that can be used to make wine or dried into raisins, up 20 percent from 2011, prompting some raisin growers to mechanically harvest their grapes for wine rather than hand pick green grapes and dry them into raisins, even though raisin prices are also high. Piece rates to hand harvest raisin grapes rose from about $0.27 to $0.30 a tray in 2012.

Manuel Cunha of the Nisei Farmers League said that 27,000 workers were needed to harvest California's 200,000 acres of raisin grapes. Hand-harvested raisins must be drying on the ground by mid-September for growers to get insurance payments if rain damages their drying raisins.

Cunha said there is a "very, very real squeeze." He predicted that workers who could earn more harvesting raisins than other commodities would move to raisins so that "we will hear of other commodities not getting harvested." Cunha said that labor contractors told him that their crews are 25 to 30 percent below "normal" levels.

However, Cunha told the Capital Press on October 15, 2012 that he did not know of any San Joaquin Valley crops that were not picked for lack of labor. Cunha attributed sufficient farm labor in 2012 to a smaller-than-usual raisin grape crop.

Naturipe?s Tom Am Rhein said "labor has been very tight. There's been some degree of crop loss as a result." Bill Gass of the Santa Cruz Farm Bureau attributed fewer farm workers to "the next generation is not following in their [parents' footsteps]? many of the potential workers from Mexico are afraid to cross the border because of drug cartel activity near the borders [and] a lot of the workers are now going into construction, food service or hotels so there's more competition in finding farm labor."

The National Immigration Forum sponsored a conference call on September 19, 2012 that included assertions that fruits and vegetables are "rotting on the vine" because of "the agricultural industry's labor crisis." Craig Regelbrugge urged Congress to move from STEM to STEAM, or to include agriculture with science, technology, engineering, agriculture, and math as areas in need of foreign workers. Regelbrugge also complained that the Obama administration has been too aggressive in conducting audits of agricultural employers' I-9 employment eligibility verification forms. Regelbrugge asserted that most farms are "fully compliant with the law" but that individual farms after audits discover that up to 80 percent of their workers were unauthorized.

Ralph Broetje of Broetje Orchards in Washington employs about 1,200 workers year-round and hires 800 to 1,000 seasonal workers each year. When 2,000 workers were employed in September 2012, Broetje said that he would have preferred to have 200 more seasonal workers picking apples into bags from aluminum ladders. Broetje, who says that the fastest pickers earn $1,000 a week at piece rate wages, is advertising around the US for apple pickers.

Maureen Torrey of Torrey Farms in New York reported similar difficulties recruiting sufficient seasonal workers. Nan Walden of Farmers Investment in Arizona's Santa Cruz valley, the world's largest grower and processor of pecans with 6,000 acres, complained that the state's SB 1070 drove unauthorized workers from the state.

The Wall Street Journal on October 10, 2012 reported that Washington state expects a 109-million box apple crop, about the same as the 2010 record crop of 110 million boxes. Apple prices are high because of below-normal harvests in Michigan and New York.

Some farmers said they would not pick all of their apples because of too few workers at prevailing piece rates, which are typically $20 per 1,000-pound bin (two cents a pound). Steve Nunley said he raised piece rates for picking Gala apples from $18 to $24 a bin, but Martin Estrada of Monkey Ridge Ranch said that some pickers found his rate increase from $22 to $28 a bin insufficient and went elsewhere.

In 2011, apple growers persuaded Governor Christine Gregoire to declare a labor emergency so they could hire prisoners, but their low productivity has dampened calls for a similar declaration in 2012.

The Western Growers Association said its grower members reported 20 percent fewer workers in 2012 than in 2011.

The American Farm Bureau Federation in October 2012 announced a new plan to legalize unauthorized workers in the US to do farm work. Qualifying unauthorized workers in the US would receive five-year work permits. Workers outside the US would have a choice of one-year visas that tie them to a particular employer (or two employers, such as one for eight months and another for four months) or 11-month contracts to work for any "registered" farm employer, and then spend at least 30 days a year outside the US before returning. Workers with 11-month contracts could lose them if they were jobless in the US more than 30 days.

The AFBF proposal aims to give farm employers a choice between contract workers who are tied to their farms and workers who float from farm to farm. The current H-2A program requires employers to provide housing and pay a higher-than-minimum Adverse Effect Wage Rate; the AFBF proposal requires the payment of the federal or state minimum wage and does not require the employer to provide housing or transportation to the work place.

The California Farm Bureau Federation urged employers to complete an on-line survey that asked for information on how many year-round and peak seasonal workers they hired, with the maximum category 101 or more year-round and 301 or more seasonal workers. The survey asked "what actions have you taken as a result of labor shortages this year, and what will you do differently next year?" The options, such as delayed activities, changed crops, and planted less, did not include stepping up recruitment efforts and raising wages.

Mellano & Co, a 400-acre flower farm near Oceanside California, said that it had 10 percent fewer than the usual 100+ farm workers in 2012, resulting in some flowers not being harvested. Mellano says he cannot raise wages to attract and retain workers because of low-cost flower imports from Mexico, Colombia and Ecuador. FLCs seeking workers to harvest Valencia oranges for piece rate earnings of up to $100 a day say that workers prefer to harvest avocados, where the work is easier and piece rate earnings are higher.

Mountain Meadow Mushroom Farms in Escondido reported hiring extra workers to produce 100,000 pounds of mushrooms a week under piece rate wages. Some of the newer workers hired did not earn the state's $8 an hour minimum wage at the farm-set piece rate wage.

Labor shortages should result in higher wages. President Eisenhower's Secretary of Labor, James F. Mitchell, in 1959 said that continued immigration deprived farm workers "of the automatic action of a free labor market, in which a labor shortage tends to bring about its own correction" in the form of higher wages.

Congress. The House and Senate held hearings September 13, 2011 and October 4, 2011 in response to complaints of farm labor shortages. The House Subcommittee on Workforce Protections featured testimony from Joe Bailey of Bailey Nurseries, who complained of difficulty finding workers to fill 900 seasonal jobs (but not 500 year-round jobs). Bailey began to use the H-2A program in 2008 after enrolling in E-Verify, and obtained a third of its 500 seasonal workers via the H-2A program.

Bailey stopped using the H-2A program in 2011 in part because the two-thirds of its seasonal workers who were local hires also had to be paid the Adverse Effect Wage Rate required for H-2A workers. Bailey recruited 350 local workers to fill 500 seasonal jobs in the Minneapolis area in April-May 2011, and said that over half quit before the end of the season.

Libby Whitley of Mid-Atlantic Solutions complained that DOL's Office of Foreign Labor Certification rejected or returned for correction far more employer H-2A applications in 2011 than in earlier years, forcing farm employers to appeal to DOL's Office of Administrative Law Judges (www.oalj.dol.gov/PUBLIC/INA/REFERENCES/CASELISTS/TLC_DECISIONS_FY2012.HTM), where employers say they prevail in 90 percent of cases. DOL usually rejects employer job offers that require applicants to have experience, which frustrates employers who say that they want to hire workers with experience pruning trees or performing other farm tasks.

DOL explained that the large number of rejections and appeals in the first half of FY11 resulted from the failure of many farm employer applicants for certification to provide sufficient documentation. DOL modified its procedures in January 2011 so that it could give employers more time to provide required documentation rather than reject their applications.

The Senate hearing featured the Georgia Commissioner on Agriculture calling for a "guest worker program for the 21st century." The head of the Western Growers Association (WGA) said there was a "labor crisis" due to I-9 audits and ICE raids, and Farm Credit East testified that mandatory E-Verify would drive many "vulnerable" farms out of business. WGA testified that there were labor shortages in Arizona, a state that requires employers to participate in E-Verify, and in California, which does not mandate employer participation in E-Verify.

Senator Dianne Feinstein (D-CA) said: "I have also come to the conclusion that Americans do not, and do not want to have the stamina and do not want to do those [farm] jobs." Senator Jeff Sessions (R-AL) countered: "I do believe that farmers can find employees that work on their farms from American citizens."

Studies. Tom Hertz and Steven Zahniser reviewed recent wage trends. Two data sources, the employer-reported NASS Farm Labor Survey and the BLS QCEW, show real farm earnings peaking in 2009 and falling since then. The CPS and the NAWS, which obtain data from relatively small samples of farm workers, report lower earnings of about $10 an hour in 2009, but the CPS shows rising wages between 2009 and 2011.

An analysis of commodities and counties where average weekly earnings as measured by the QCEW rose by 40 percent or more between 2010 and 2011 found some with fairly sharp increases, albeit often for detailed sectors with relatively little employment.

Carolyn Veneri proposed a three-part test of occupational labor shortages. She defined a labor-short occupation as one in which employment increased at least 50 percent faster than the average of all occupations, wages rose at least 30 percent faster than average, and the occupation in question had an unemployment rate at least 30 percent below average. She found few labor shortages.

Several states have tried to create programs to help farmers to hire guest workers. Colorado's Department of Labor in 2008 created a pilot seasonal farm worker program and listed lawyers and agents who could help farmers to obtain workers via the H-2A program. State efforts to help employers use current programs such as H-2A are lawful.

US House. 2011. Committee on Education. Subcommittee on Workforce Protections. September 13. Serial 112-37. www.gpo.gov/fdsys/pkg/CHRG-112hhrg68264/html/CHRG-112hhrg68264.htm US Senate. 2011. Committee on the Judiciary. Subcommittee on Immigration, Refugees, and Border Security. October 4. Serial J-112-45. www.gpo.gov/fdsys/pkg/CHRG-112shrg71756/html/CHRG-112shrg71756.htm Hertz, Tom and Steven Zahniser. 2012. Is There a Farm Labor Shortage? Veneri, Carolyn. 1999. Can occupational labor shortages be identified using available data? Monthly Labor Review. Vol 22. No 3. pp 15-21 www.bls.gov/opub/mlr/1999/03/contents.htm
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