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July 2004, Volume 10, Number 3

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Wages, CLRA, Productivity

FELS http://www.fels.org) reported that its farm employer-members paid an average $7.70 an hour to entry-level general laborers in Spring 2004, and that most farm production workers earned $8 to $9 an hour, including pruners, irrigators, milkers and tractor drivers. The most common benefit provided to year-round workers was vacation pay, 63 percent of employers provided this benefit, followed by health insurance, about 40 percent, holiday pay (an average six days), 44 percent, and housing, about a third.

Less than 10 percent of farm employers provided benefits to seasonal workers, but almost 10 percent provided them with holiday pay (an average six days), nine percent provided housing, and less than five percent provided health insurance.

The California Assembly approved an increase in the state's minimum wage from $6.75 to $7.75 by 2006. The federal minimum wage rose from $4.75 to $5.15 in 1997, and Democratic Presidential candidate John Kerry proposed raising it to $7 an hour by 2007. Federal minimum wage rules are scheduled to change in August 2004, so that only workers earning less than $455 a week will normally be entitled to 1.5 times their usual wage for work over eight hours a day or 40 hours a week. Under California law, workers must earn at least twice the minimum wage of $6.75 an hour or $540 a week to be exempt from overtime pay requirements.

In some cases, nonfarm businesses such as wineries employ farm workers. In a study of 1,160 farm labor contractors in 2000, a quarter had SIC codes other than 0761 ((Farm labor contractors and crew leaders). Average employment of FLCs, and the wages they pay, could be underestimated in employment data that classify firms by their primary activity.

Sharecropping. The California Rural Legal Assistance organization has been in the forefront of efforts to eliminate sharecropping in strawberry production, under which farmers or nonfarm operators such as coolers and marketers provide land, seeds and equipment, and sharecroppers, their families and hired workers provide the labor to care for the crop, usually in exchange for 50 percent of its value after it is harvested, cooled and sold. When workers are hired by integrated operations such as Coastal Berry, wages and benefits are about 40 percent of the $25,000 an acre cost of producing fresh strawberries.

Most California strawberry pickers and sharecroppers are Mexican immigrants. Sharecropping can be a route to upward mobility for those with little capital, and some pickers ask coolers to become sharecroppers. However, sharecroppers with few assets are vulnerable to low berry prices.

The Santa Maria area of central California has 5,700 acres of strawberries that generated revenues of $143 million in 2003. Many Santa Maria sharecroppers are from San Martin del Estado, a village in Oaxaca, and relatively high returns in 2003 encouraged some to double and triple their sharecropped acreage, which required them to hire pickers. As prices fell over the season, some stopped paying pickers, and the federal and state governments came after them for back wages and payroll taxes.

Some of the sharecroppers who stopped paying wages have contracts with Sunrise and Frozsun, sister Santa Maria companies that contracted with 99 sharecroppers to grow berries on 1,500 acres in 2004. One Sunrise sharecropper said that, at June 2004 prices, he could offer workers only $2.50 per 18-pound box, but since pickers averaged only 2.5 boxes an hour, they earned less than the $6.75 an hour minimum wage and quit.

If sharecroppers do not pay wages, are the coolers liable? In one case, lower courts held that Apio Inc. of Guadalupe was not jointly liable with sharecropper Isidro Munoz, who leased land from Apio to grow 500 acres of strawberries and went bankrupt without paying 180 pickers. Munoz signed the English "farmer agreement" even though he speaks only Spanish, and the question pending before the California Supreme Court is whether the agreement signed by Munoz, which allowed Apio "to enter the fields and maintain the growing business operations" at any time, made Apio a joint employer with Munoz and thus liable for the unpaid wages.

California has 28,000 acres of strawberries, and the major growing areas include the Watsonville/Salinas area, followed by the Oxnard area, the San Diego/Orange County area and the Santa Maria area.

Sharecropping has a long history and takes many forms. The most common mental image in the US is the sharecropping that arose in the southeast after the Civil War, when sharecroppers grew their own food in addition to cotton, had considerable autonomy in how they farmed their cotton, but were often prevented from leaving the area by debts; this type of sharecropping diminished with cotton mechanization. In the Midwest, beginning farmers continue to engage in share-leasing to become farmers, sometimes becoming a partner of a retiring farmer (perhaps a relative) to learn while providing labor in the hope of eventually taking over the farm.

In higher value and risk crops such as strawberries, there is often share-labor, in which the share cropper provides primarily labor, although he must provide enough management so that the buyer of the crop does not become his employer. However, with the share cropper providing mostly labor, there is often a socio-economic difference between the parties in share-labor arrangements. In the Santa Maria area, share-labor strawberry arrangements have historically been between coolers and sharecroppers who were considered independent contract farmers. In the Watsonville/Salinas area, by contrast, share-labor strawberry arrangements were often between strawberry growers and sharecroppers that some court decisions found to be employees.

CRLA did not charge $500 in late-payment penalties to the CRLA Foundation when it did not pay its rent on time, which led the Modesto-based Western United Dairymen to charge that CRLA was mis-spending federal funds in spring 2004. The federal Legal Services Corp provided $5.9 million of CRLA's $8.6 million in funds in 2001. The Dairymen's real target was the Center for Race, Poverty and the Environment, part of the CRLA Foundation that often sues to block the establishment of so-called mega dairies.

Productivity. Productivity growth has been faster in agriculture than in nonfarm industries, enabling farm output to increase even as farmers and farm workers moved to nonfarm jobs. Much of the productivity growth in fruit and vegetable agriculture was due to capital-labor substitution, machines replacing people, but some technologies make workers more efficient, so that fewer are needed.

One fast-spreading technology that increases worker efficiency is conveyor belts that move slowly through fields, minimizing the need for workers to carry the produce they have picked to the end of rows and reducing slips and falls on uneven ground. For example, $125,000 conveyor belts in strawberry fields eliminate the need for harvesters to carry full flats of berries to the end of the row, enabling most workers to pick at least 50 percent more berries. Some 25 conveyor belts are being used in the Oxnard area, and some growers have reduced the piece rate they pay harvesters from$1.50 a 12-pint flat to $1.20 a flat. To offset worker fears of earnings losses, most guarantee that workers will earn at least their old wages.

The German-made Pluk-o-Trak, a driverless machine that creeps down rows of fruit trees and uses hydraulic arms to lift the workers it carries into trees, eliminating ladders, is being used to pick pears near Medford, Oregon. The harvesting-aid machines cost $30,000 to $60,000 and are being tried in places with shrinking seasonal work forces, such as Colorado.

Agriculture has not participated in the major "people" innovations that increased worker productivity in the 1990s: workplace voice, or involving workers in management decisions, work design changes, such as team work, and incentive-based compensation that uses profit-sharing to align worker and firm incentives. The productivity gains from fully involving workers in management decisions were especially large for unionized US firms.

Several groups of farm workers complained of pesticide poisoning on Kern county grape farms in May 2004, prompting Sen. Dean Florez (D-Shafter) to introduce a bill that would establish a fund to help pay the medical expenses of those exposed to pesticides. The fund would get money from penalties and settlements paid by pesticide-law violators.

Some 250 farm workers were displaced when a levee broke in the delta region of the San Joaquin Valley, flooding 12,000 acres in the Upper and Lower Jones tracts. Some of those displaced reported they were paying $2 a night to live in migrant camps that were flooded, and most moved into a homeless shelter in Stockton. The 400-foot levee break was declared a federal disaster, qualifying local public agencies but not farm workers for federal aid.

UI. Unemployment insurance normally provides up to 26 weeks of assistance to laid off workers. Across the US, UI benefits averaged $260 a week (the average in California was $248 a week), and 10 million jobless workers received $42 billion in 2003. About 44 percent of unemployed workers collected all the UI payments to which they were entitled (50 percent in California), and the average duration of UI payments was 16 weeks (18 weeks in California). Congress in March 2002 approved an additional 13 weeks of UI benefits for all jobless workers, which extended the average duration of unemployment by about two weeks.

Beginning July 1, 2004, California workers are entitled to up to six weeks of Paid Family Leave, financed by a 0.08 rise in their State Disability Insurance tax, bringing it to 1.18 percent.

Health. SB 2 requires California employers with 50 or more workers to "play or pay" for employee health insurance, that is, to provide health insurance to their employees (50 to 199 workers beginning in 2007) or to employees and their families (200 workers or more beginning in 2006), or to pay an undetermined fee into a state-operated pool that would offer health insurance to uncovered employees beginning on January 1, 2006.

Employees become eligible if they work at least 100 hours a month and have been employed by the same company for at least three months. Employers would pay at least 80 percent of the cost of health insurance, or fees roughly equal to that amount, and workers would pay no more than 20 percent; the total costs of the new program is $7 billion a year.

SSA. The Social Security Administration issues "mis-match" letters to employers when the name and number submitted by newly hired workers on W-4 forms does not match the information in its databases. Some employers have fired workers after receiving mis-match letters from the SSA, saying that they may be fined by the IRS, prompting protests and a new policy: SSA now sends a mis-match letter first to the employee and then, after several weeks, to the employer, who has 60 days to respond to SSA.

Melinda Burns, "Sharecroppers squeezed by demands of dealers and workers," Santa Barbara News-Press, July 6, 2004. Marjie Lundstrom, "Pesticide Poisoning Seen As Part Of The Harvest," Sacramento Bee, May 25, 2004. Michael Doyle, "New inquiry begins for CRLA," Fresno Bee, January 24, 2004. Wells, Miriam J. 1987. Sharecropping In The United States: A Political Economy Perspective. In Michael Chibnik. Ed Farm Work and Fieldwork: American Agriculture in Anthropological Perspective. Cornell Univ Press. 211-43. Wells, Miriam J. 1996. Strawberry Fields: Politics, Class, and Work in California Agriculture. Cornell University Press