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April 1996, Volume 2, Number 2

House Rejects Guest Workers

Congress in March took up proposals by Senator Alan Simpson
(R-WY)--S S269 and S1394--and Representative Lamar Smith
(R-TX)--HR2202--to deal with legal and illegal immigration.

On March 21, the House approved the part of the Smith bill that
seeks to reduce illegal immigration by a vote of 333-87. However, the
House voted 238-183 to drop the reductions and changes in the legal
immigration system proposed in the bill. The Senate Judiciary
Committee on March 28 voted 13-4 to send both bills to the full
Senate for consideration April 15-17.

The House approved, by a vote of 257-163, and with Speaker
Gingrich's support, a so-called "Proposition 187" amendment that
permits states to deny public education to illegal alien children,
and to prohibit states from offering federally financed welfare
benefits to illegal aliens. Parents who are illegal aliens could not
apply for welfare assistance for their US-born and thus US-citizen
children. US-born children of illegal alien parents could still get
AFDC and Food Stamps, but a third party would have to apply for such
benefits on behalf of the children.

The House on March 21 rejected by a 242-180 vote an effort by
growers to launch a new guest worker program. On March 5, 1996 the
House Agriculture Committee approved 25 to 14 an amendment by Rep.
Richard Pombo (R-CA) to the House immigration bill that would grant
temporary work visas to 250,000 foreign farm workers, with the
ceiling to be reduced by 25,000 each year. The existing temporary
farm worker program admitted about 17,000 H-2A workers in 1995.

Background. In February 1995, the National Council of
Agricultural Employers released a proposal for a supplementary
foreign worker program to fill temporary or seasonal US jobs. One
year later, Rep Elton Gallegly (R-CA) unveiled the NCAE proposal as
the "Alternative Agricultural Temporary Worker Program" or "Temporary
Agricultural Worker Amendments of 1995...to provide a less
bureaucratic alternative for the admission of temporary agricultural
workers."

There are about two million workers employed at some time during a
typical year on the nation's crop farms, and a DOL survey estimates
that 25 percent may be unauthorized.

Under the Pombo proposal, growers, labor contractors, or
associations wanting to employ foreign farm workers would have had to
file at least 25 days before the job was to begin a labor condition
attestation (LCA) with their state Employment Service office listing
the number of foreigners requested and when work was to begin. Local
ES offices would review these LCAs "only for completeness and obvious
inaccuracies" within seven days after they were filed. Employers
violating their attestations or program rules could be assessed civil
money penalties, and be debarred from the program.

If the foreign workers the employer wanted to hire were outside
the US, growers would submit their names to INS and consulates
abroad, and these named workers would have been given H-2B visas to
enter the US at the consulates or at a port of entry. Growers could
recruit foreign workers anywhere and in whatever manner they wished.
Foreign workers would have to leave the US when their jobs end or be
subject to deportation, unless another employer promises to hire them
within 14 days.

Under the rejected plan, 25 percent of the foreign workers' wages
would have been placed into a federal trust fund managed by the INS,
which foreign workers would have reclaimed with interest in their
country of origin. Foreign workers would have been limited to a
maximum two years in the US. [Greg Schell of Migrant Farmworker
Justice Project in Belle Glade, Florida argues that 25 percent of the
H-2A workers do not return to their countries of origin.]

Program costs would have been financed by employer contributions
equivalent to Social Security and unemployment insurance taxes that
would not be paid by growers. Most predictions were that farmers
would request the maximum 250,000 guest workers because there was no
incentive not to make requests for foreign workers.

The guest worker program would sunset after three years if
Congress fails to re-authorize the pilot five-state telephone
verification system that the Smith bill establishes to make it easier
for employers to determine whether workers are presenting false
documents.

The Pombo-Gallegly proposal was essentially an effort to extend
the procedure used to admit H-1B temporary foreign professionals to
agriculture. Under the H-1B program, nonfarm US employers "attest"
that they are paying prevailing wages and satisfying other conditions
so as to have no adverse effects on similar US workers--workers with
at least a BA or equivalent--and then the US Department of Labor
relies on complaints from US workers and other employers to
investigate charges that employers are violating their attestations.
H-1B foreign workers can remain in the US for up to six years.

The H-2A program, by contrast, requires farm employers wishing to
employ H-2A temporary foreign workers to take a series of steps to
prove that US workers are not available, and then to offer US and
foreign workers housing at no cost, contracts that guarantee work for
at least three-fourths of the period that the employer asserts
workers are needed, and other benefits and protections.

Rep. Lamar Smith (R-Texas) argued against the growers' guest
worker proposal: "once you admit hundreds of thousands of people like
this, why not just pull the Border Patrol off the border and let
people in?" The Clinton administration opposed the program for fear
that it would increase illegal immigration, reduce job opportunities
for US workers, and depress wage and work standards for US workers.
The Clinton administration also believes that the current H-2A
program is sufficient for businesses that are experiencing labor
shortages.

After the House Agriculture Committee voted to approve the growers
plan, Secretary of Labor Robert Reich and US Attorney General Janet
Reno wrote to Senate Judiciary chairman Orin Hatch (R-Utah) that they
would "strongly recommend" a veto of the entire immigration
legislation if it included temporary foreign farm worker provisions
for agriculture.

About 60 farm organizations, from the American Farm Bureau
Federation to the Wisconsin Christmas Tree Producers sent a letter to
senators and representatives on February 12,1996 to urge the
inclusion of the Gallegly proposal in immigration reform legislation.

Fourteen organizations, from the American Friends Service
Committee to the United Methodist Church sent a letter to House
Speaker Gingrich on February 14, 1996 opposing the Gallely proposal,
and the effort to include it in the immigration bill without hearings
on its features.

The House on March 21,1996 rejected the Pombo-Gallegly proposal,
and voted 357-59 to reject an alternative offered by Rep Robert
Goodlatte (R-VA) to modify the H-2A program by transferring it from
the Labor Department to the Immigration and Naturalization Service,
reducing the period of grower recruitment to 20 days, and capping
H-2A admissions at 100,000 per year.

The Pombo-Gallegly proposal appears to be dead for this round of
immigration reform, but it suggests that farm employers have the
support of over 40 percent of House members for a far more flexible
foreign worker program. However, if growers succeed in obtaining
Senate approval for a guest worker program, the Goodlatte alternative
of changes in the current H-2A program may resurface.

Congressional Hearings. In September and December 1995, the
Senate and House, respectively, held hearings on farmers' requests
for an alternative non-H-2A guest worker program. None of these
hearings focused on bills or concrete proposals, since the
Pombo-Gallegly proposal was not yet available. Instead, the hearings
typically featured farmers making three arguments, and worker,
government, and academic representatives responding.

The three major grower arguments were:

1. That illegal aliens comprise a significant share of the current
farm labor force. Growers testified that illegal aliens are 50 to 70
percent of some harvest crews, and they implied that this percentage
is typical of the entire hired farm work force despite the
legalization of over one million unauthorized workers in the SAW
program in 1987-88. (The US Department of Labor estimates that
25 percent of the labor force on US crop farms was unauthorized in
1993-94.)

2. That new control measures under consideration in Congress--more
border controls, more interior enforcement, and a more secure work
authorization document-- would prevent them from continuing to hire
unauthorized workers who present fraudulent documents. Effective
controls on hiring illegal aliens would leave them with a labor
shortage, they asserted.

3. That the current H-2A program is too inflexible to provide them
with foreign workers if labor shortages appear--the US workers
recruited for employers allegedly do not show up, work hard, or
remain with the employer; growers must pay US and H-2A workers the
higher of three wages--prevailing, minimum, or adverse effect wage
rate--and provide housing at no charge to the US and temporary
foreign workers. In the words of one grower, the H-2A program is "too
structured for a labor market that is relatively unstructured."

Worker representatives attacked these grower arguments by
asserting that there is no shortage of workers, only a shortage of
decent wages, benefits, and working conditions.

Second, worker advocates argued that employers prefer vulnerable
foreign workers to US workers. In North Carolina, for example, it was
asserted that US citizen-Puerto Rican workers were sent to employers
where they would not have work for two weeks, and told that they
would have to live at their own expense until the harvest began,
while H-2A workers were sent to work immediately. It is no wonder,
they assert, that US workers under such circumstances abandoned these
farm jobs, while H-2A workers stay with their employers as required
by their visas.

Most government representatives opposed the growers proposal. The
INS and DOL dislike the lack of control over entries under the
growers' proposal, and even the USDA acknowledges that a free
agent-attestation guest worker program may not provide workers to
isolated areas most in need of migrant farm workers.

Academics generally argued that the US farm labor market could
adjust to the absence of immigrant workers--legal, illegal, or guest
workers--with very little effects on the average American. Academics
testified that:

First, it is unlikely that currently unauthorized workers will be
removed quickly from the farm work force.

Second, even if the 20 to 30 percent of the current work force
that is illegal were removed from the farm work force, US consumers
may not notice their removal in food costs because farm worker wages
are, on average, only about 11 cents of a $1 produce item. Farmers
receive about one-third of the retail price of most fruits and
vegetables, and farm workers receive one-third of the farmer's price.
This means, that for a $1 head of lettuce, farmers get an average
$0.33, and farm workers $0.11.

Removing 20 to 30 percent of the farm labor force might raise farm
wages. If done quickly, as at the end of the Bracero program, farm
wages might rise by 30 to 50 percent --the UFW was able to negotiate
a 40 percent one-year wage increase in 1966 because farm wages had
been held down by Braceros, and Braceros were no longer available. If
farm wages rose 50 percent, from today's $4 to $6 range to $6 to $9
per hour, and if all of the wage increases were passed on to
consumers, the head of lettuce would cost consumers $1.05, i.e., a
doubling of farm wages leads to a five percent retail price increase.

Retail produce prices may fall rather than rise, as occurred when
the end of the Bracero program encouraged farmers and processors to
change the way that tomatoes were handled. In the tomato case, the
end of immigrant labor caused production to rise, and retail prices
to fall.

The tomato example illustrates that it is very hard to predict
what will happen when the labor supply changes. Many growers in 1963
testified that the tomato industry had no choice but to follow its
pickers to Mexico, shifting production there. Instead, the harvest
was mechanized, and today almost five times more tomatoes are
produced in California. Those closest to the adjustment issue may not
have the clearest picture of likely adjustments.

Most of the adjustments to fewer and more expensive workers in
agriculture occur on the DEMAND, not the supply side, of the labor
market. In other words, in the face of immigration reforms, lasting
adjustments are more likely to be found by accelerating labor-saving
mechanization, or changing the way farm work is done, or letting
production of the commodity shift overseas, not in launching new
efforts to recruit US workers, to build housing for migrant workers,
or to provide government services to farm workers that raise their
effective incomes.

The notion that most adjustments to fewer and more expensive farm
workers reduce the demand for farm labor, not increase the supply,
reflects experience in the US and elsewhere. This is why, in most
societies, development is associated with a smaller percentage of the
work force producing food.

Growers and their supporters typically frame the argument in a
manner that looks for SUPPLY adjustments. For example, if there are
currently 100 workers employed and 30 are unauthorized, effective
immigration controls would require the government to find 30 new
workers.

The removal of unauthorized or guest workers from the farm work
force rarely prompts US workers to replace them. The more common
response is for growers to demand fewer workers, often by mechanizing
hand-harvest tasks.

Engineers point out that there are alternatives to hand work in
agriculture, even to harvest raisin grapes, the crop often associated
with recently arrived and illegal workers. One California grower
planted twice the number of raisin vines per acre, cut the canes by
hand to let the raisins dry on the vine, and then harvested the
dried-on-the-vine raisins mechanically by shaking the raisins off the
vines.

Machines to eliminate most of the 50,000 four-to-eight week hand
harvesters are available at a cost of $18,000 to $55,000 each.

Economists testified that the agricultural guest worker debate
could be evaluated by asking three questions:

First, are there any indications of labor shortages that are
putting upward pressure on farm wages?

Second, if farm wages rise, how does the supply of labor respond,
e.g., do rising wages encourage more workers to seek farm jobs, or
current workers to work more hours?

Third, do rising wages set in motion technological, trade, or
other changes that reduce the demand for farm workers?

The rationale for guest workers is that the labor market is not
responding properly to market signals such as rising wages, or that
government intervention is needed to prevent market adjustments that
would have negative effects, such as rising food prices.

If a new guest worker program begins before any of these
adjustments can be observed, it will never be known how easily the
farm labor market can adjust to changes in its labor supply.

Mid-1980s versus Mid-1990s. In the mid-1980s, farmers
surprised proponents of immigration reform by successfully including
in the Simpson-Mazzoli legislation guest worker proposals. In the
mid-1980s, when Congress was considering the legislation that
eventually became IRCA, the major sponsors of the Simpson-Mazzoli
legislation, as well as the Reagan administration, were opposed to a
special agricultural program.

In June 1984, Congress nonetheless adopted the Panetta-Morrison
amendment that would have established a free agent guest worker
program for agriculture--what the New York Times termed one of the
top ten political stories of 1984. Then-senator Pete Wilson (R-CA)
persuaded the Senate to approve a similar free agent program in 1985.

Two of the key allies of the growers in 1984-85 still influence
immigration policy. Leon Panetta, who led the fight for the growers
in the House, is President Clinton's chief of staff, and Clinton
reportedly assured California farmers in September 1995 that "they
would be taken care of" if labor shortages developed.

California Governor Pete Wilson, who led the growers' fight in the
Senate, in an August 1995 session with the California Farm Bureau,
asserted that he had not changed his position since the mid-1980s.
The Wilson program would have allowed foreign farm workers to "float"
from farm to farm in the US, and encouraged them to return to Mexico
by withholding, according to Wilson, one-third of their wages.

Farm organizations and papers asked growers to report to them any
instances of labor shortages due to border tightening--in February
1996, there was an intense search for labor shortages in Yuma,
Arizona and the Coachella Valley of California.

The California Farm Bureau asserted that stepped up border control
efforts are likely to produce a major labor shortage "for farmers
dependent on plentiful supplies of willing , available labor."
However, most growers reported that they had not yet experienced any
labor shortages.

One Florida grower asserted that "We use people who are legal, but
when they really crack down on these other people using illegals,
it's going to spread legal people really thin." Importers of Mexican
vegetables noted the hypocrisy of Florida farmers arguing that more
controls were needed on Mexican imports to "protect US jobs," and
simultaneously arguing that Mexican workers have to be imported to
fill these jobs.



Ray Sotero, "House passes immigration bill; labor shortages
feared," Ag Alert, March 27, 1996. Daniel Schneider, "CA growers look
south for more field hands," Christian Science Monitor, March 22,
1996. Lisa Shuchman, "Florida's next Mexican import could be farm
workers," The Palm Beach Post, March 10, 1996. Barbara Ferry, "Guest
worker plan draws kudos and critics," States News Service, February
23, 1996. Marcus Stern, "Guest-worker plan gets big push in House,"
San Diego Union Tribune, February 18, 1996. Charles Lunan, "Keep out
tomatoes from Mexico, but don't send away Mexican laborers,"
Sun-Sentinel, February 13, 1996. Ray Sotero, "Stepped-up border
efforts may create labor shortages," Ag Alert, February 7, 1996. S
Lynne Walker, "Last-Chance Labor," California Farmer, August 13,
1988, 14.


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