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Philip Martin: plmartin@ucdavis.edu

Immigration & Agriculture

Newcomers down,Farm wages up

Highlights• Ave ag employ rising slightly; US 1.2 to 1.4 million;

CA 400,000, 1/3 of US average FTE in NACIS 11

• About 2 farm workers for each FTE ag job, so 2.4 - 2.8 million US farm workers and 800,000+ in CA. 2/3 of FB farm workers = unauthorized. CA unauthorized share = 67% vs 50% in US because almost all CA farm workers are foreign born

• Farm labor market: immigration reform pivot

– FLCs: 30% of total employment on US crop farms, 55% of employment on CA crop farms

– H-2A: almost 10% of average employ on US crop farms, WA up sharply via assocs & joint employer

– Imm: what accompanies E-Z guest workers?

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UI Ag Employ 2003-13: WA up 20%, CA 9%, OR 7%, US 5%

CA Ag = 3 S’s: Sales, Labor’s Share, Seasonality

• Farm sales = CA $43 bil (2012); IA = $31 bil– CA = 12% of US $395 billion in farm sales

because of FVH commodities (62% of CA sales)

– US 54% crops, 46% live; CA 70% crops, 30% live

– CA $26 bil of $30 bil crop sales = FVH commods

• FVH commods: labor’s share = 20-30% of production costs (labor =10% of mfg costs)– Fruits & nuts = $17.6 billion sales in 2012

– Vegs & melons = $6.3 billion sales

– Hort specialties (nursery, flowers) = $2.5 bil

• Seasonality: Ave emp 404,000 (2013) Peak 477 000; low 333 000 Peak/trough = 1 4

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3 C’s of Farm Labor• Concentration: CA labor expenses (2012) =

$5.9 bil + $3.4 bil = $9.3 bil; CA: <7,500 farms paid >90 of farm labor expenses. US: <44,000 farms paid ¾ of total expense. What focus: farms OR workers?

• Contractors: intermediaries who recruit & deploy crews of workers. Win-win specialization in labor matching OR risk-absorbers in farm labor markets rife with violations?

• Conflict: Exit versus voice: easier to exit a “bad” job (ag & fast food) than to organize & voice demands to change wages and conditions (workers with specific skills valued in 1 occup)– Exits of “best” workers = hard to sustain unions in ag,

Half of ag emp in SJV; 1/6 each in Central & South Coast

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CA 2007: more workers brought to farms by FLCs than hired directly. Early 1990s: SAWs replaced by unauthorized

CA crop support:$4.5 billion or 43% of $10.5 billion in ag wages paid in

2012 (QCEW); 55% of crop support wages paid by

FLCs

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Fruit: $2.5 billion or 24% of California ag wages paid in

2012

Vegetables: $1 billion or 10% of ag wages paid

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Nursery: $800 million or 8%Dairy: $600 million or 6%Big 5 = 95% of CA ag wages

Hired Crop Workers• Young, male & born in Mexico

– Big change: fewer newcomers (workers in US less than 1 year). From 20% newcomers in 2000 to 2-3% today. Result: average age & weeks of farm work up

– 50% of all crop workers, & 2/3 of foreign born farm workers, are unauthorized. CA has > % unauthorized because more CA farm workers are foreign born, 98%, versus rest of US, 58%

• Employ and earns: more weeks, higher wages– Average $9.50/hour across US; $10 in CA in 2009– Average 33 weeks of farm work and another 6 weeks

of nonfarm work: workers find work for ¾ of year– Annual earnings average $15,000-$17,000/year

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Fewer Mexican newcomers = fewer new farm workers

0

100

200

300

400

500

600

2005-06 2006-07 2007-08 2008-09 2009-10

Source: Passel, 2012

Annual Mexico-US and US-Mexico Flows, 2005-10 (000)

Mexico-USUS-Mexico

Big jump in average hourly earnings in CA (7%) & SJV (11%), between 2011 and 2012

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

2009-10 2010-11 2011-12

Change in Average Hourly Earnings of Hired Farm Workers, California, 2010-12

California

San Joaquin Valley

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Unions: from statewide to farm-specific impacts

UFW: from 3,300 active (2012) to 9,100 (2013); 20 contracts, but hard to win wage increases >3% dues. UFW certified to represent workers on 600+ farms, max 200 contracts. But UFW can request MMC at “old certs” IF employer has ULP

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Immigration: 1980s• 3-5 million unauthorized in US. 20-25% of CA

farm workers = unauthorized; Enforcement = worker chase, & share unauthorized reflected perishability ( higher % unauthorized in citrus, lower % in lettuce & berries)

• 1987-88: IRCA & (1) SAWs, (2) streamlined H-2A, (3) new RAW program with no recruit, housing

• Expectation: farm wages & labor costs UP– Raise wages to retain newly legalized SAWs OR– Build housing to obtain H-2A guest workers OR– No change with RAWs (IF USDA & DOL agree shorts)

• Reality: farm wages fell. Unauthorized workers with false documents spread throughout USA.

Migrants' False Claims: Fraud on a Huge ScaleBy ROBERTO SURO, Special to The New York TimesNovember 12, 1989

''One certain product'' of the agricultural program [SAW] amnesty, Rep Schumer (D-NY) said, ''is that in developing immigration policies in the future, Congress will be much more wary of the potential for fraud and will do more to stop it.''

Ag: 2% of US workers, but SAWs = 40% of legalizations under IRCA

1.1 million SAWs. SAWs = 35% of crop workers 1989-93;Today, 10% or 150,000 SAWs still in ag

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Legalization speeds exits from ag. SAW share of crop workforce fell from 35% in 1989 to 10-15% within 3 years.

Immigration and Farm Labor 2• Since 1995: 50% of hired workers on US crop farms

have been unauthorized• Farm employers since mid-1995: we need an E-Z

guest worker program that does NOT require us to:– recruit US workers under DOL supervision– provide free and approved housing to guest workers

• December 2000: AgJOBS negotiated in anticipation that Presidents Bush and Fox would embrace a new Mexico-US guest worker program

• AgJOBS = Try IRCA again:– Legalization for workers (this time earned legalization, farm

workers must continue to do farm work for 3-5 years)– E-Z guest workers: (1) employers post job ads rather than

recruit, (2) can pay housing allowance rather than provide housing, (3) lower Adverse Effect Wage Rate (AEWR)

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AgJOBS: Legalization + E-Z guest workers. Pending since 2000

Immigration 3: AgJOBS• Legalization: unauthorized farm workers would

become probationary immigrants & earn regular immigrant status if they did:– >150 days of farm work a year for 3 years or– >100 days a year for 5 years– Create new administrative mechanisms to credit

workers for farm work not done due to natural disaster, strikes, pregnancy etc (NGOs to assist??)

• Guest worker changes:– Attestation replaces certification; end of DOL-

supervised recruitment of US workers– Housing allowance instead of free housing; workers

find own housing (adds $1 to $2 an hour to labor costs)– AEWR of $11 an hour (CA in 2014) rolled back by $1 to

$2 an hour and studied (offsets housing allowance)

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Unauthorized: 5% of 155 million US workers = 7.5 million,But 50% of 2-2.5 million farm workers = 1 to 1.2 million

WA: shift to H-2A, 8,000 in 2014• H-2A program: no cap on visas, but employers

must try to recruit US workers, provide free housing, pay AEWR (WA= $11.87; CA = $11.01)

• WFLA: employer association = co-employer of H-2A guest workers that shifts H-2As from one farm employer to another to max hours worked– Why H-2A in WA: easier to build & operate housing– Saddle labor demand: June-July peak for cherries &

Sept-Oct apples; average farm employment of 88,000, or ¼ of California

• 2014: potential record apple crop of 140 million 40-lb boxes (130 mil in 2012). Pickers average 6,000 pounds or 150 boxes/day for 65 days. Perhaps 20,000 to 25,000 workers, & H-2A = 1/3 of apple LF

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CA: H-2As up in vegetables• 2012: CA 2,900 jobs certified; OR, 88; WA, 4,400;

AZ, 2,400; NV, 1,910; ID, 2,000; AK, 22; HI, 98• CA: many leafy greens grower-shippers operate

year-round, in Salinas and Yuma– Along border, labor force is mostly legal because of

Border Patrol checking buses – Given experience with H-2A along border, bring H-2A

workers to Salinas as well– Largest single CA H-2A user: Sierra-Cascade strawberry

nursery in far north

• Responding to labor shortages:– Growers: (1) stretch available labor supply (more weeks,

better supers, higher wages), (2) increase productivity (mechanical aides), (3) labor-saving mechanization

– Shippers: shift to imports, esp with Mexican berries

Mechanical aids to raise productivity

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Mechanization: Olives, carrots, tomatoes, nursery

DOL certified 100,000 jobs to be filled with H-2As in FY13

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H-2A Flow chart: SWAs & OFLC; 98% approval rate

Drought 2014: Small impacts on farm jobs & land prices

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2014 Drought• CA: 8 million irrigated acres; about 429,000

expected to be fallowed in 2014, 5% of land – Project 7,500 farm jobs lost, <2% of farm jobs

• 2014: NET loss of water = 1.6 million acre feet– Lose 6.6 million acre feet of surface water, but replace

with 5 million groundwater: no limits, but wells down– 1 acre foot = 325,851 gallons; HH pays $750+/year– Ag wants cheap water to dump on ground. At

$3,260/acre foot, water costs 1 cent per gallon; at $326, water costs 1/10 of 1 cent per gallon

– Issues: (1) groundwater mgt & (2) water marketing--transfer water from thirsty & low-value crops like rice, alfalfa, pasture etc to high-value FVH

• 2014: few farm jobs lost as scarce water shifts to high-value & labor-intensive FVH commodities

Drought: makes bad situation in farm worker cities worse

“normal” unemployment rate in Mendota & Firebaugh = 35%; with drought 40%

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Farm worker cities: 1/3 of Fresno county’s 15 cities have lower per capita incomes than Mexico ($10,000/year)

What next for farm labor?• Major features of the FVH labor market have not

changed, viz, seasonality, FLCs, & exit, not voice• But recent changes:

– Fewer new entrants, higher wages, more farm work– Will supply-chain pressure expand from safety to labor?

What future for EFI, Fair Food, Fair Trade etc?

• FVH agriculture & farm workers: – Employers: worry but muddle through with FLCs until

Congress approves E-Z guest workers?– Will rising wages induce more mech aids, labor-saving

mechanization, & crop changes (peaches to nuts)

• Immigration: the labor supply wild card– Other labor issues, including rising state min wages ($9

in CA July 1, 2014), implementation of ACA, pay average piece rate earnings for breaks etc

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New top-down pressure from buyers via supply-chains?