Immigration & Farm Labor 2017 Philip Martin: plmartin@ucdavis.edu

Finding sufficient & affordable labor is the farmer’s #1 challenge H.P. Stabler (1903)

Farm Labor Issues • Seasonality: biological prod process, competitive ag

– Peak-trough ratio—1.4 for US; up as geography down – Want workers to be available when needed

• Hired workers: low education & manual labor – Crews of interchangeable workers (contractors) – Exit vs voice: revolving-door farm labor market

• Protecting workers: rising labor costs lead to • Labor-saving mechanization & changes to raise prody • Rising imports from lower-wage countries

• Labor compliance: govt & buyers – Tight labor market #1 protection—gives workers options – Labor law mins & level playing field: enforce, educa,

unions – Other actors: er associations, buyers, NGOs, consumers

US Highlights • Hired workers: average employ, 1.2 million in 2016;

900,000 crops & crop support; 300,000 animal ag • Hired farm workers = 70% Mexican-born; 50% not

authorized; from 30% newcomers in 2000 to 1% • Employer responses to fewer newcomers – Satisfy: bonuses, train supers. If supply US FWs inelastic,

wage increases do not = more workers – Stretch: mechanical aids to make work easier for older

workers & women (conveyor belts; dwarf trees) – 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) – Imports: half of fresh fruits, ¼ of fresh vegetables, are imported

Per cap i·ta U.S. fruit and vegetabl 1e availa bi lity , 1970-2005

n f u

2

Americans eating more fresh fruits and vegetables

Fresh fruits up 30% 1970-2011; fresh vegetables up 20% But cheese per capita up 200%; corn syrup up 300%

.. -

' 11, .,,,,-

'"

Demand up for very labor intensive crops

US, CA, and WA Average Ag Employment, 2007-16

1,400,000

~

~ V ~

1,200,000 _, --- ,..._ --, ,- y -,.

~ ~ .... ... , , ,,, ,

1,000,000

~ us - CA

800,000 WA

600,000

- -- -400 ,000 I -- - -- ·- .. -- --200,000

... ~ ... ... - ... ~ ... ... ~

0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

US average ag employment up 8%, CA up 10%, WA up 24%

How many workers? CA: 2 workers for each FTE job Average FTE Employment and Unique Farm Workers: 2007, 2012, 2015

900,000 FTE Employment Workers

800,000

700,000

600,000

500,000

400,000

300,000

200,000

100,000

2007 2012 2015 0

US & CA Crop & Crop Support Employment, 2007-16

600,000

--- .. ~ - -~ ~ -,,, - ~ 'fr ,,.. ,, ...;

500,000 ~ us Crops - us Crop Sup

CA Crops

400,000 ~ CA Crop Sup

---- -- -- --300 ,000 --'91 ._ -.. --

-- ........ 200,000 -A ,~

- -- ' ,.., -

~ ~ -. -~ --~ ..Jo .... .l .... .... ...

100,000

0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

US direct hire up 4%; CA flat; US crop sup up 15%; CA 22%

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, 2006-15

220,000

Crop 210,000 Crop Support

200,000

190,000

180,000

170,000

160,000

150,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

AGUA -

FARM ILA!BOR ( ,ONTRAiCTING, il,NC w gro bran s

Daity Fat

Who pays farm wages? Total in 2016: $42 billion. Big 5 = 2/3 Crop support: 24%; fruit 13%; green 11%; dairy 8%; veg 8%

CA as future? Big 5 = 92% of $14 billion in ag wages

3,000 US FLCs: ½ in CA, hire 1/3 of workers. Increase

efficiency or risk absorbers?

FLC crews harvest tree fruits for piece ratesHard to monitor workers in trees, but easy to measure output

Vegetables: direct-hire & workers via crop support firms (some FLCs are partners)

Nursery & dairy

Hired Crop Workers • Born in Mexico: 70%; unauthorized 50%; 30%

born in US • Fewer newcomers (in US less than 1 year).

Average age (38) • Settled & less flexible: FTC migration <5%. • Mostly families with US-born children; 60% get

some means-tested benefits • Workers: $10.85/hour; Employers $11.85• Average $17,500-$20,000/year; $100 a day• Farm work like nonfarm work: live off the farm,

commute to work, have 1 farm employer during year

Among unauthorized immigrants, a decline from Mexico but rise from elsewhere since 2009 In milli on:

exlcan

2.0

1,5 2.8

6.9

5.3 5.0

4.1 O h r

5.8 5.3

1990 1995 2000 2007 2009 2014

te: Shadingsurroundinglines indicates I~ and higt, points of the estimated 9cr; confiden e interval. The differen es in 1995and 2000 bet1 een Me icanand Other are notstatistical~ 1significantat 9Cr; confidence interval. Source: Pe I Research uenterestimates for 2005-2014 based on augmented 1\merican Communitf Survey data (IPUMS ; for 1995-2004 based on March Supplements of the current Population SuriJe_'. Estimates for 1990from arren and arren (2013 .

era II umberofU .S. Unauthori::ed Immigrants H Ids Stead_ Sirce 2009

PE\ RESEARCH CENTER

Larger share of unauthorized immigrants are long-term residents % ofadultunauthoriz.edimmigrants, bydurationofU.S. residenre

60

40

34

20

0 1995 2000

10 years or more

Less than 5 years

200 5

te: Data labels are for 1995, 2003 , 2005 and 2014.

2010 2014

Source: Pe • Research Center estimates for 2005-2014 based on augmented Americlln Oommunil) Sun.e_ data (IPUMS); for 1995, 1998, 2000 and 2003 based on March Supplements of the Current PopulationSun.e_. "Overall umberofU.S. Unauthorc:ed Immigrants Holds Stead_ Since 2009

PEW RESEARCH CENTER

US: unauthorized newcomers down, settled & less mobile

Agriculture: among first to feel effects of fewer flexible & unauthorized newcomers

Employers: 4-S responses • Satisfy current farm workers with bonuses,

benefits, & better supervisors. If supply of USworkers = 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 wageskeep rising to justify investments? Involve seed companies with long time horizons? (Switch crops?)

• Supplement the labor force with H-2As. End recruitment, housing, & AEWR? Allow H-2A workersin dairy & other year-round jobs? From 10-month to 3-year visas & Asians?

• Imports: Sep production & consumption of fresh

Satisfy: bonuses, benefits, supervisor training & respect satisfy can RETAIN but not ENLARGE ag workforce

Stretch: mechanical aids raise worker productivity

Substitute: mechanize olives, carrots, tomatoes, nursery

Defense vs ag robots: performance vs costs

u EMPLOYMENTANDDFF,cEOFFoREI.G0N LABOR CERTIFICATION H-2A Temporary Agricultural Labor Certification Program - Selected Statistics, FY 2017

Applications Received FY 2017 Q1 Q2 Q3 Q4 % Change Review of Positions Certifi ed FY 2017

FY16 (% of total certified FY 2017)

10,115 2,355 4,131 2,438 1,191 14.9% Florida 25,303 12.6%

Applications Processe d Georgia 23 ,421 11.7%

North Carolina 20 ,713 10.4% Determination FY 2017 Q1 Q2 QJ Q4

Washington 18,535 9.3% Total 10,097 1,549 4,418 2,690 1,440 Determinations Galifomia 15,232 7.6% Top 10 - Certified 9,797 1,495 4,334 2,601 1,367 States Louisiana 8,875 4.4% - Denied 144 28 39 45 32

Kentucky 7,403 3.7% -Withdrawn 156 26 45 44 41

NewYor1< 6,870 3.4% Positions 206,156 28,964 70,409 65,405 41,378 Requested 1 Michigan 6,432 3-2% Positions 200,049 28,013 68,834 62,966 40,236 Arizona 6,060 3.0% Certified Processed 97.6% 98.7% 98.0% 97.1% 95.9% North Carolina Growers 11,947 6.0% Timely2 Association, Inc.

WAFlA 7,134 3.6% • Florida

Top States • Georgia Fresh Harvest , Inc. 4,623 2.3% • North Garolina Zirkle Fruit Company 2,970 1.5%

9.3% 7.6% 4.4% 3.7% • Washington

10.4% 3.4% Top 10 Elkhorn Packing Co, LLC 2,653 1.3% • California Employers

3.2% • Louisiana Stemilt Ag . Services LLC . 2,082 1.0% 11.7% 3 .0% • Kentucky R & R Harvesting , Inc . 1,999 1.0%

30.6% • New York Michigan Footh ill Packing , Inc. 1,854 0.9%

12 .6% • Arizona Peri & Sons Farms , Inc . 1,739 0.9% • Remaining States Virgin ia Agricultural 1,602 0.8% Growers Assoc . Inc.

~

Supplement with H-2As: 75,000 FY07, 200,000 FY17 Top 5 states: FL, NC, GA, CA, WA: 51% of H-2A jobs certified

CA H2A: 3,000 in 2012, 8,600 in 2015, 15,000 in 2017 • 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 fruitindustry is concentrated; more seasonal, lessgrower-shipper integration, cheaper housing

• Challenge: housing, esp in coastal metro countiesbest suited to producing high-value crops

FMR Monterey county 2017: $1,400 for 2-bedroom apartment

T&A $17 mil, 800 beds, of $21,000/bed Return to Bracero-era on-farm housing?

T&A: also houses 800 employees at 145-unit apt in Yuma, AZ since 2007

S125.00 de renta por mes, por persona ............... ........... ............................. .............. .._.It .................. ,_ ........-. ........... --.. ....... ................... .....-...........................-_...... .........,....._.......

,c..,.. .................. ......,..........,............. _,..___,............. Llamenos al (831) 455-J&&J o al (121) J17·2JCO

. para resenar su espaclo .

Guest workers find own houing, but work for a particular farmer? Will farmer escape liability?

Note 2.5 to 3 people per room in Salinas & Ventura

!!

AEWRs 2017: $12.57 in CA; <$11 in southeast & AZ-NM Highest: Canadian custom harvesters $13.79

FY 2017 Adverse Effect Wage Rates

$10.92 West �

Virginia�

Alaska �

$12.19 Delaware�

$13.01 Indiana�

$13.38 Oregon � $12.75

Wisconsin �

$13.79 Nebraska �

$12.19 Pennsylvania �

$12.38 New Hampshire �

$13.01 Illinois �

$13.12 Iowa�

$12.75 Minnesota �

$10.95 New Mexico �

$10.62 Alabama�

$12.38 Vermont �

$12.19 New Jersey �

$11.66�Wyoming �

$13.14 Hawaii�

$13.79 South Dakota �

$11.59 Oklahoma�

$11.66 �Montana �

$12.38 Maine �$13.79

North Dakota �

$12.19 Maryland �

$13.79 Kansas �

$13.38 Washington �

$11.00 Utah� $11.00

Colorado �

$13.01 Ohio �

$10.95 Arizona �

$11.00 Nevada�

$10.62 South Carolina �

$11.59 Texas�

$11.66�Idaho�

$10.38 Mississippi �

$10.92 Tennessee �

$11.12 Florida�

$12.57 California �

$10.38 Arkansas �

$12.38 New York �

$10.92 Kentucky �

$10.38 Louisiana �

$11.27 Virginia�

$10.62 Georgia �

$11.27 North Carolina �

$12.75 Michigan

State < $10.00 � $11.00 < State < $12.00 � State > $13.00 �

$13.12 Missouri �

$12.38 �Massachusetts

$12.38 �Rhode Island

$12.38 �Connecticut

�$12.00< State < $13.00 �$10.00 < State < $11.00

GUARD REGISTRATION 0 JOH OOE

5555 A Y STREET A Y TO CA S5555

G 5S5555 06/30/2000

O Additional Permit Required to carry Firearm

Business services: 1.5 million unauthorized in 10 million labor force-15%

Hospitality and hotels: 1.5 million in 12 million labor force, 12%

Construction: 1 million

unauthorized in 5 million labor force, 20%

Concentrated in residential

Agriculture: 1 million unauthorized among 2 million hired

U.S. agricultur al export s have histor ically exceeded Imports, leading to surplu s

Billion clollars 160

140

120

100

80

60

Souroe: USDA, Economic Research Service Foreign Agricultural Trade of the United States ta.

Export share of U.S. farm production , 2011-13

Cotton

Tree nuts

Rice

Wheat

Soybeans

Fresh fruits

Processed vegetables

Pork

0

I

I

I

25

I

50 Percent

75 100

U.S. agricultural imports , 2000- 15

Sb illion 120

100

80

60

40

20

I I I 0

2000 I I I

2003 I I I I I I

2006 2009 I I I I

2012 I I

2015

• Sugar and tropical products

• Horticultural products

• Livestock products

• Cotton , tobacco , and seeds

• Oilseeds and oilseed products

• Grains and feeds

Source : USDA, Economic Research Service using data from U.S. Department of Commerce , U.S. Census Bureau , Foreign Trade Database .

Imports Total US

$39.8 billion $20.2 billion $60 billion

--+ Estimated US Wine Sales Revenue In 2016 . ''"""" wron& ..,.,., , 2011. BWI .. . 2011

US trade surplus in ag, but FVH imports are rising

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?

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 whenneeded or assume floating workers available?

– Imports: US ag net export surplus, $140 bil X, $100 bil M, but imports of FVH commodities rising