Immigration & Farm Labor 2017
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1 Immigration & Farm Labor 2017 Philip Martin: Finding sufficient & affordable labor is the farmer s #1 challenge H.P. Stabler (1903)
2 CA Highlights Hired workers: average employ, 425,000 in 2015; unique farm workers, 850,000: up 10% since 2005 Hired farm workers = 90% Mexican-born; 55% not authorized; from 30% newcomers in 2000 to 1% Employer responses to fewer newcomers Satisfy: bonuses, train supers. Growers say inelastic supply: wage increases do not = more workers Stretch: mechanical aids, change production practices to make work easier for older workers & women Substitution: labor-saving mechanization (& switch crops) Supplement: young H-2A workers = fresh blood, but must (1) recruit US, (2) provide housing, (3) pay AEWR ($12 CA) Uncertainty: what investments in machines vs housing?
3 CA = 3 Ss: Sales, Labor s Share, Seasonality Farm sales = CA $43 bil (2012); IA = $31 bil CA = 12% of US $395 billion in farm sales US farm sales: 54% crops, 46% livestock CA farm sales: 70% crops, 30% livestock CA $26 bil of $30 bil crop sales or 87% = FVH commodities: fruits & nuts, vegs, hort specialties FVH: labor s share: average 30% of production costs, but wide range, wine grapes to berries Seasonality: Peak-trough ratio = 1.4 ratio rises as geography down; can be 100 to 1 on a farm With more workers than jobs, who pays for standby time?
4
5 Farm Labor: 3 C s Concentration: 900 CA ag ers hired 100+ ees in 3 rd quarter of 2014; these 900 hired 2/3 of total Contractors: intermediaries to recruit & deploy crews. Win-win specialization OR risk-absorbers in labor markets with violations? Conflict: Exit versus voice: easier to exit a bad job (ag & fast food) than to organize & voice demands to raise wages Exits of best workers = hard to sustain unions in ag, fast food & other high-turnover industries Top-down unions: without locals, it is hard for workers to gain leadership experience Employers: replace workers who quit rather than develop incentives to retain best workers
6 CA: both average FTE employment and # workers up 10% Average FTE Employment and Unique Farm Workers: 2007, 2012, , ,000 FTE Employment Workers 700, , , , , , ,
7 Since 2009: more workers are brought to CA crop farms by nonfarm employers than are hired directly by crop farms Average FTE Crop and Crop Support Employment, , ,000 Crop Crop Support 200, , , , , ,
8 Why don t US workers take $30,300 CA ag jobs? Fruits & FLCs are 55% of FTE employment: $18k & $10k
9 3,000 US FLCs. The 1,400 in CA hire 30% of farm workers FLCs: Increase efficiency by matching workers & jobs or act as risk absorbers for violations?
10 FLC crews harvest tree fruits Piece rates: to motivate workers. Hard to monitor workers in trees, but easy to measure output
11 CA strawberries #1 ag employer: 90% of US 3 billion pounds from 40,000 acres, 60,000 to 70,000 workers
12 Vegetables: direct-hire & workers via crop support firms (some FLCs are partners)
13 Nursery & dairy Big 5 of 20: crop support, FVH, & dairy = 92% of $14 bil CA ag wages in 2016; 64% of $42 billion in US
14 Hired Crop Workers Born in Mexico: 90%; unauthorized 55% Trends: Fewer newcomers (workers in US less than 1 year). From 20% to 2%. Result: average age (39) up Settled & aging; families with US-born children; 60% get some means-tested benefits; few FTC migrants Employ and earns: more weeks, higher wages Workers say $10.85/hour; Employers report $11.85 CA 36 weeks or 205 days of farm work; 5.7 days/week Average earnings $17,500-$20,000/year; almost $100 a day Farm work like nonfarm work: live off the farm, commute to work, have 1 farm employer during year
15 US: unauthorized newcomers down, settled & less mobile
16 Few migrants: only 20% had farm job >75 miles from home Green = non-migrant; red = FTC migrant, purple = shuttle
17 Agriculture: among first to feel effects of fewer flexible & unauthorized newcomers
18 Employers: 4-S responses Satisfy current farm workers with bonuses, benefits, & better supervisors. If supply of workers in US = inelastic, wage increases do not add to supply Stretch with mechanical aids that increase productivity: conveyor belts in fields, dwarf trees. How much to invest, how fast to deploy? Substitute: labor-saving mechanization. Will wages keep rising to justify investments? Involve seed companies with long time horizons? (Switch crops?) Supplement the labor force with H-2As. Expand or change current program (1) no-recruitment (2) nohousing, and (3) reduced AEWR program? Allow H-2A workers in dairy & other year-round jobs?
19 Satisfy: bonuses, benefits, supervisor training & respect Most farmers: satisfy will not ENLARGE ag workforce
20 Stretch: mechanical aids to raise worker productivity
21 Substitute: mechanize olives, carrots, tomatoes, nursery
22 Defense vs ag robots: performance vs costs
23 Agrobot: pick strawberries mechanically
24 Supplement with H-2As: 75,000 FY07, 165,000 FY16. CA & WA up
25 H-2A FY17 up 16% from FY16; >200,000 jobs cert in FY17? Top 5 states: FL, NC, GA, CA, WA: 51% of farm jobs certified
26 CA H2A: 3,000 in 2012, 8,600 in 2015, 11,000 in 2016 CA: vegetable firms operate in Yuma & Salinas Border labor force is legal; BP agents check buses H-2As from Yuma to Salinas: house in motels or on-farm housing? T&A: $8 million to house 800 workers in Spreckels, $10,000 per bed Largest: Fresh Harvest, FLC certified to fill 4,000 jobs with H-2A workers in FY16 Half of CA farm labor is in SJV, where fruit industry is concentrated; more seasonal, less growershipper integration. Some shippers: increase imports of FVH commodities, esp Mexican berries
27 T&A $8 mil, 800 beds: return to Bracero-era on-farm housing? T&A: also houses 800 employees at 145-unit apt in Yuma, AZ since 2007
28 AEWRs 2017: $12.57 in CA; <$11 in southeast & AZ-NM Highest: Canadian custom harvesters $13.79
29 CA: 50% increase in minimum wage by 2022 (now $10.50)
30 Big variance in median earnings: $18,000 Delano, $108,000 Los Altos Windfall gains for workers or job losses in SJV?
31 Projected median wage in 2022 in Fresno & Merced = $20 Historic experiment: min wage of $15 = ¾ median wage
32 April 2016: one way U-Haul rates between California & Texas Costs 2x more to move away from CA as to CA
33 What s next for immigration? Enforcement #1: more fencing and agents on Mex- US border; more deportations; fewer refugees, more vetting. Enforcement #2: E-Verify & guest workers?? ALL employers submit data on new hires; if suspected unauthorized, do not hire or fire (HR 3711)? Toughen H-1B regs: crack down on Indian outsourcers, as when Disney replaced US workers with H-1Bs? Expand/ease access to low-skill H2A & H2B workers? Immigration policies 1986 IRCA: 2.7 million legalized, sanctions failed : Mex-US migration up, CIRA with path to US citizenship failed in Congress 2017: Trump era: enforce, guest workers, legal?
34 Feb 20, 2017: Plan for $21 billion wall
35
36 With unauthorized Mex-US migration down, is wall needed? What wall: physical or virtual?
37 Feb 20, 2017: Interior enforcement
38 2 million unauthorized foreigners convicted of US crimes Trump: bad hombres. Remembrance project
39 Double the number of ICE agents from 10,000 to 20,000
40 Refugees: 45,000 in FY18; ban entries from 7 nations
41
42 Business services: 1.5 million unauthorized in 10 million labor force-15%
43 Hospitality and hotels: 1.5 million in 12 million labor force, 12%
44 Construction: 1 million unauthorized in 5 million labor force, 20% Concentrated in residential
45 Agriculture: 1 million unauthorized among 2 million hired
46 Summary 1 Hired worker employment up as expansion offsets mechanization. Farm workers: aging & settled unauthorized workers with US-born children; less flexibible Employer responses Satisfy current workers to retain Stretch with labor-stretching mechanical aids Substitute: labor-saving mechanization (switch) Supplement: H-2A workers; reduce recruitment, housing, & AEWR requirements New enforcement & easier guest workers? Which 4 S gets investment? What variance in response by commodity and area?
47 Summary 2 Short-term responses: satisfy, stretch, and supplement. What employer model for H-2A? NC & WA: associations that move workers from farm to farm FL & CA: super FLCs move workers from farm to farm Most H-2As: direct hire, but requires housing Medium-term responses: substitute, supplement, and imports How fast do machine costs fall & performance improve? What farm mgt changes? Is acreage growing? Build housing for H-2A workers or change to end housing requirement? Invest to assure workers when needed or assume floating workers available? Imports: US ag net export surplus, $140 bil X, $100 bil M, but imports of FVH commodities rising
48 US trade surplus in ag, but FVH imports are rising
49 Rural Migration News:
50 upper right hand corner
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