July 2014, Volume 20, Number 3
California: Labor, Wages, Food
Labor. The number of newly arrived Mexican-born workers has been decreasing, and agriculture has been one of the first industries to feel the effects. A significant share of farm workers employed one year, often 10 to 20 percent, are not in the seasonal farm work force the next year.
This high turnover makes agriculture a "canary in the coal mine" for noticing the effects of fewer newcomer migrants.
Farmers are reacting to fewer newcomers by persuading current workers to do more farm work and introducing mechanical aids to increase worker productivity. Since harvest workers sometimes work 50 or 60 hours a week during peak periods, there is limited room to increase hours of work. Growers with high quality standards that slow picking must often raise piece-rate wages to retain workers.
If the labor status quo continues, growers are considering several strategies to stretch and augment the current farm workforce or replace it with machines or imports. The current farm work force can be stretched with harvest aids that increase productivity, such as conveyor belts in the field that reduce the need to carry harvested commodities and reduce worker injuries.
Peak labor demands can be reduced with new varieties that lengthen the growing season. Training workers to make them more productive, improving the quality of supervisors to bolster worker satisfaction and retention, and interviewing workers to determine what would they would want to remain seasonal workers longer can also stretch the current workforce.
The labor force can be augmented by hiring US youth or foreign guest workers. Several growers are experimenting with youth employment programs, noting that youth were once a core segment of seasonal farm workers. Some complain that, just as youth gain experience, they may quit to return to school.
Guest workers are another option. There is no cap on the number of H-2A workers, but farmers who want to be certified to employ H-2A workers must try and fail to find US workers, provide housing at no charge, and pay at least $11.01 an hour in 2014. Many first-time H-2A workers are not proficient in harvesting commodities. Most require one or two seasons to become proficient, which can lead to conflicts between H-2A and local workers.
Growers who have experience using H-2A workers, such as vegetable growers who hire H-2A workers in border areas during the winter months (workers near the border are usually legal because of frequent border patrol checks), can bring these border-area H-2A workers to central and northern California. However, these growers must undergo certification that H-2A workers are needed to fill farm jobs away from the border.
Tighter labor supplies and the increased investments required to recruit and house H-2A workers or buy mechanical aids could prompt labor-saving mechanization, especially of commodities that are harvested in one pass through the field. Commodities that are harvested several times but are processed, such as iceberg lettuce that is chopped and bagged, are most amenable to mechanical harvesting.
Many large growers are also shippers who sell their own produce as well as that of other growers in the US and abroad. Shippers can deal with labor shortages that reduce production in one area with production in other areas of the US or via imports. Until it becomes clearer which strategy, that is, stretching, augmenting, mechanization, or imports, is most rational, all are likely to be pursued.
Wages. California's minimum wage increased from $8 to $9 an hour on July 1, 2014, 12.5 percent, and is scheduled to rise to $10 on January 1, 2016, for a 25 percent increase in 18 months. The Legislature in June 2014 considered a bill (SB 935) to further raise the state's minimum wage to $13 in 2017 and adjust it thereafter for inflation.
The California Labor Commissioner launched a web site, www.wagetheftisacrime.com, to alert workers about their rights under state labor laws. California's Wage Theft Protection Act (AB 469) went into effect in 2012.
According to the Quarterly Census of Employment and Wages, California farmers paid $10.6 billion in wages in 2012 (NAICS 11, which includes crops, livestock, agricultural services, and forestry and fisheries), up seven percent from almost $10 billion in 2011. Between 2010 and 2011, the agricultural wage bill rose five percent. Each one percentage increase in the state's agricultural wage bill is $100 million.
On January 1, 2007 California's minimum wage rose 11 percent from $6.75 to $7.25 an hour. Agricultural wages paid rose seven percent, from $8.5 billion in 2006 to $9.1 billion in 2007. California accounts for about 30 percent of US agricultural wages paid, and between 2006 and 2007, US agricultural wages paid rose five percent compared to California's seven percent.
Higher minimum wages affect some employers and workers more than others. Most farm employers have a wage structure, with some employees earning the minimum wage and others more. If the minimum wage rises by $1 an hour, workers earning more than the minimum wage normally expect a similar increase in order to retain their place in the wage hierarchy.
Employers often respond to higher wages with productivity increasing steps, from providing tools that enable workers to work faster to harvesting fields and orchards less often. The slowdown in Mexico-US migration has already put upward pressure on farm wages and encouraged more use of labor-saving and productivity-increasing machines.
Farmers face several challenges in 2014, including implementing the Affordable Care Act and dealing with the effects of the drought.
Several farm labor contractors named Khan around Yuba City were charged with selling pay stubs to individuals who used them to obtain unemployment insurance or disability insurance benefits. The buyers paid $250 for every $1,000 in wages reflected on the stubs, and thus qualified for benefits at a cost of over $14 million to the Employment Development Department.
AB 263, which went into effect January 1, 2014, prohibits employers from taking an adverse employment action against an employee who updates or attempts to update his or her personal information, unless the changes are directly related to the skill set, qualifications, or knowledge required for the job. AB 263 has prompted questions about what employers can do if an employee was hired with a false Social Security Number and wants to change it.
In the past, many employers terminated such employees for dishonesty. However, AB 263's efforts to protect immigrant workers may make firing workers who update the work-authorization portions of their records an employer offense, since courts disagree on whether employee honesty is a valid job-related qualification.
The California Supreme Court in June 2014 ruled that Vincente Salas, who used another person's Social Security number to get hired and alleged that he was not recalled by Sierra Chemical after filing a worker's compensation claim, was allowed to sue Sierra for unpaid wages for the period when he first attempted to return to work and the date that Sierra learned that he had used a false SSN.
SB 1087, Farm labor contractors, doubles the required bond that FLCs must post, requires FLCs and their supervisors to receive training on sexual harassment, and bars FLCs convicted of sexual harassment from obtaining or renewing licenses, whose cost would rise from $500 to $600. Growers persuaded the author of SB 1087 to remove provisions that would have required FLCs to provide copies of their contracts with growers to the state labor commissioner.
Food. The UCB Food Labor Research Center issued a report in June 2014 that concluded the rise of low-price, low-cost retailers such as Wal-Mart, Target and Costco has undermined traditional grocery stores that once provided middle-class jobs with health insurance and other benefits. The report, requested by the United Food and Commercial Workers, calls for more unionization in food retailing.
Between 2000 and 2011, the number of grocery stores in California rose from 9,900 to 10,400. The number of retail food workers, including part-time workers, was about 384,000 in 2011. The Center says that 36 percent of retail food workers receive some form of public assistance.
The Center criticized Wal-Mart and Target for pursuing low-wage business models that "reduce quality and specialization, eliminate skilled positions such as bakers and meat cutters, as well as bakery, service deli, and meat clerks, and thus flatten career ladders and leave few opportunities for employee training and upgrading." The Center praised Costco for working with unions and offering work-related benefits to employees. It notes that "non-union natural/organic/gourmet food stores" continue to expand.
Kevin Lunny bought the Drakes Bay Oyster Company in 2004 knowing that its 40-year lease to harvest oysters in Point Reyes National Seashore would end in 2012. The oyster farm was founded in 1934 and was allowed to continue operating when much of Point Reyes became a national seashore in 1976. Drakes Bay typically produces about 450,000 pounds of oyster meat annually worth $1.5 million with 25 employees.
When ordered to cease operations in 2012, Lunny sought a renewal of the lease and appealed the Interior Department's order to cease operations. In June 2014, the US Supreme Court rejected Lunny's appeal of the Interior Department's termination of the lease, which should lead to the closure of Drakes Bay.
Jayaraman, Saru. 2014. Shelved: How Wages and Working Conditions for California's Food Retail Workers Have Declined as the Industry has Thrived. http://laborcenter.berkeley.edu/foodlabor/