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The H-2A Program and AEWRs

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February 24, 2021

US farm employers may be certified by the US Department of Labor (DOL) to recruit and employ foreign workers to fill seasonal US jobs if they satisfy two conditions. First, they must try and fail to find local workers, and second, they must ensure that the presence of the migrant guest workers will not adversely affect similar local workers.

DOL is charged with implementing these conditions. Farm employers must advertise their jobs so that US workers know about them, and report to DOL whether US workers who apply are hired or rejected for valid reasons. DOL tries to prevent adverse effects by setting an Adverse Effect Wage Rate (AEWR), a minimum hourly wage that is higher than the federal or state minimum wage and aims to approximate the wage that would prevail if there were no guest workers.

Employers must offer and pay at least the AEWR to H-2A workers and any US workers who are employed alongside them. Farm employers complain that the AEWR is too high and is increasing too fast, while worker advocates argue that the AEWR sets a ceiling on farm wages, since US workers who want more than the AEWR to accept an advertised job do not need to be hired.

DOL relies on wage or earnings data from USDA’s Farm Labor Survey (FLS) to set AEWRs by state or region. FLS wage data are from a questionnaire sent to about 35,000 US farm employers in April and October that obtains information on the average hourly earnings of the workers farmers hire directly. The FLS does not collect data on workers who are brought to farms by labor contractors and other nonfarm employers. The average gross hourly earnings of field and livestock workers from the FLS for one year become the AEWR for the next year.

USDA cancelled the FLS in September 2020, and DOL responded with a proposal to freeze AEWRs at current levels in 2021 and 2022 and then adjust them each year based on changes in DOL’s Employment Cost Index, a survey of nonfarm employers. Worker advocates sued, and a federal judge ordered USDA to continue the FLS. USDA released 2020 FLS data in February 2021 and DOL used these hourly earnings data to set AEWRs for 2021.

AEWRs. The FLS average gross wage or earnings of US field and livestock workers was $14.62 an hour in 2020, up 4.5 percent from $13.99 in 2019. AEWRs vary by state, and are highest along the west coast at over $16 an hour in 2021, and lowest in the southeastern states at less than $12 an hour.

The largest increases in FLS earnings, and thus AEWRs, between 2020 and 2021 were in California, up almost nine percent to $16.05, in the mountain states of ID, MT, and WY, up almost seven percent to $14.55, and in the northern plains states of the Dakotas, KS, and NE, up six percent to $15.89. By contrast, AEWRs rose less than one percent in southeastern states to $11.81 in AL, GA, and SC and to $11.88 in AR, LA, and MS.

2021 AEWRs range from $11.81 in the southeastern states to $16.34 in the Pacific Northwest, and averaged $14.62 for the US

Between 2016 and 2021, the US AEWR rose by 20 percent, but there were significant differences by region and state. The fastest wage growth, up 35 percent over the five years between 2016 and 2021, was in CO, NV, and UT. The slowest five-year wage growth was in Florida, where AEWRs rose nine percent. Florida is the state with the most H-2A jobs certified.

AEWRs between 2016 and 2021 increased fastest in the mountain states, up 35%, and slowest in Florida, up 9%

Perspective. What could explain the slower increase in wages in the southeastern states and the faster increase in the mountain and western states? The southeastern states have the highest number of H-2A jobs certified and are the states where the H-2A share of crop employment is highest (over 90 percent of H-2A jobs certified are on crop farms).

H-2A workers are in the US for an average of six months, so the 275,000 H-2A jobs certified were equivalent to 137,700 full-time jobs in 2020. Average employment on crop farms in 2020, including workers hired directly and those brought to farms by nonfarm employers such as labor contractors, was 888,300 in 2019. This means that H-2A workers filled 16 percent of average employment in US crop agriculture in 2020.

In California and Washington, H-2A workers filled a smaller share of average employment in crop agriculture, and AEWR increases between 2016 and 2021 were larger than the 20 percent increase for the entire US. By contrast, in Florida, Georgia, Louisiana, and North Carolina, where H-2A workers fill a high share of jobs in crop agriculture, AEWRs rose slower between 2016 and 2021.

The increase in AEWRs was slowest in the southeastern states where H-2A workers were a higher share of UI-covered crop workers

The chart showing the H-2A share of crop employment on the left Y-axis, and the change in the AEWR between 2015 and 2021 on the right Y-axis, must be interpreted with caution. Average crop employment data are from the Quarterly Census of Employment and Wages, which includes H-2A workers in CA and WA, but not in the southeastern states. The relatively large number of H-2A workers in southeastern states, and their exclusion from unemployment insurance and thus QCEW data in these states, mean that there are more full-time equivalent H-2A workers in LA and GA crop agriculture than the average employment of UI-covered US workers on these states’ crop farms.

For example, Georgia farmers reported hiring 49,000 workers in the 2017 COA (Table 7 state data), including 18,300 for 150 days or more, while Louisiana farmers reported 23,000 workers, including 10,400 for 150 or more days. By contrast, average QCEW employment in Georgia crop and livestock agriculture was 13,900 in 2017, including 70 percent in crops. In Louisiana, average crop and livestock agriculture was 4,700, including 85 percent in crops.

The COA and QCEW data are not directly comparable. Both count jobs rather than unique workers, but COA jobs can be a few days or weeks, while QCEW average employment approximates full-time equivalent or year-round jobs.

In CA and WA, by contrast, H-2A workers must be included in unemployment insurance, so their employment and earnings are in the QCEW data along with data on US workers. In these states, H-2A employment is a smaller share of average crop employment.

Outlook. DOL certified a record 275,430 jobs to be filled by H-2A workers in FY20, including 40,800 during the first quarter of FY20. In FY21, DOL certified almost 49,000 jobs, up almost 20 percent.

DOL certified 20% more jobs in the 1st quarter of FY21 compared to the 1st quarter of FY20

Applications Received
FYTD Q1 (Oct-Dec) Q2 (Jan-Mar) Q3 (Apr-Jun) Q4 (Jul-Sept) % Change FY 2020
4,556 4,556 -- -- -- 28.5%

 

Applications Processed
FY Q1 (Oct-Dec) Q2 (Jan-Mar) Q3 (Apr-Jun) Q4 (Jul-Sept) % Change FY 2019
Total Processed 2,720 2,720 -- -- --
 - Certified 2,570 2,570 -- -- --
 - Denied 71 71 -- -- --
 - Withdrawn 79 79 -- -- --
Positions Requested 51,181 51,181 -- -- --
Positions Certified 48,929 48,929 -- -- --
Processed Timely 97.6% 97.6% -- -- --

 

Review of Positions Certified FY 2021Q1 (% of total certified FY 2021Q1)
Top 10 States of Employment Florida 16,435 33.6%
Arizona 6,101 12.5%
Georgia 3,366 6.9%
Washington 3,205 6.6%
Louisiana 2,831 5.8%
California 2,765 5.7%
Texas 1,843 3.8%
South Carolina 1,315 2.7%
Mississippi 801 1.6%
North Carolina 744 1.5%

In FY20, over 35% of the H-2A jobs were certified in the 2nd quarter

Applications Received
FY Q1 (Oct-Dec) Q2 (Jan-Mar) Q3 (Apr-Jun) Q4 (Jul-Sept) % Change FY 2019
14,131 3,545 6,129 2,681 1,776 8.0%

 

Applications Processed
Determination FY Q1 Q2 Q3 Q4
Total Processed 14,063 2,111 6,820 3,095 2,037
 - Certified 13,552 1,991 6,654 2,964 1,943
 - Denied 247 62 73 67 45
 - Withdrawn 264 58 93 64 49
Positions Requested 286,900 43,178 100,248 88,136 55,338
Positions Certified 275,430 40,844 97,375 85,044 52,167
Processed Timely 296.8% 97.8% 96.8% 95.9% 96.0%

 

Review of Positions Certified FY 2020 EOY (% of total certified FY 2020 EOY)
Top 10 States of Employment Florida 39,064 14.2%
Georgia 27,614 10.0%
Washington 26,832 9.7%
California 25,453 9.2%
North Carolina 22,052 8.0%
Louisiana 11,332 4.1%
Michigan 9,912 3.6%
Arizona 8,602 3.1%
New York 8,482 3.1%
Kentucky 6,952 2.5%

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