Nov 29, 2021
NCAE column: Politicians must act for sustainability of ag labor

One of the biggest drags on agricultural employer profitability, and consequently the employer’s sustainability, are wage rates disconnected from the market for agricultural labor in the United States. This disconnect is being significantly driven by a couple of things, and it is getting worse.

City dwellers, who will assert they are all-knowing (and certainly perceive themselves more knowledgeable about nearly everything than we country folk), are increasingly pushing their state legislatures to enact legislation regulating what happens on the farm. Legislators from New York City, Los Angeles, Seattle, Minneapolis, Denver and San Francisco, to point out a few, have divined themselves the arbiters of what needs to happen on America’s farms and ranches.

These legislators, and their complicit legislatures, have taken it upon themselves to dictate mandates on their country brethren. Instead of recognizing that markets best allocate resources in any economy to their highest and best use, these city folk have seen fit to eliminate exemptions from overtime for agricultural labor, among other things. Because, of course, a job out of doors that is subject to the vagaries and whims of Mother Nature, is just like a job at Amazon, Apple or Google. Right?

The federal government is not one to be left out of this “clobber the farmer and rancher” mentality either. However, these federal efforts kind of feel like a piling on.

The National Council of Agricultural Employees (NCAE) has been attempting over the past several years to block this piling on. The organization has repeatedly petitioned the Secretary of Labor to determine that an adverse effect on domestic workers is being visited upon them due to the employment of temporary H-2A workers, before mandating the influential Adverse Effect Wage Rate (AEWR). That’s the purpose of the AEWR.

But of course, an AEWR disconnected from the market for the very labor it seeks to regulate impacts not only the farmers and ranchers who are forced to employ H-2A temporary workers because they cannot find enough workers to help do the work, but also impacts those employers lucky enough to find a few hardy souls in their neighborhood to help. This is what is occurring today, and it is not sustainable.

This is precisely the message NCAE delivered to the White House’s Office of Information and Regulatory Affairs (OIRA). Regulations must pass muster at OIRA before they are implemented by the agency. And, since the Department of Labor (DOL) has stepped forward to bring a new AEWR to the table (recall the Trump administration’s effort was enjoined by a federal district court), NCAE seized the opportunity to again press the case for real reform that may help keep some farmers and ranchers in business.

Today, over half of the fresh fruit and a third of the fresh vegetables consumed in America are produced in a foreign country. American domestic policies mandated by state legislatures and the federal government are forfeiting our nation’s food security to our foreign competitors. And that circumstance forces the question as to whether a nation, any nation, can truly have national security if they are reliant on foreign countries for their food.

Consider the economics involved and the markets disrupted by these harmful policies.

The average hourly rate for a field hand in Mexico is about a dollar an hour. The average 2021 U.S. AEWR mandated by the DOL is $14.62 per hour (more than twice the federal minimum wage of $7.25).

As of today, the provincial Canadian wage rate for seasonal workers converted into U.S. dollars is $8.93 in Saskatchewan, while the wage in North Dakota is $15.89. The wage in Ontario is $11.12 per hour, contrasted with the Michigan wage of $14.72. Similarly, the wage in British Columbia is $11.86, while over the border in Washington, the wage is $16.34.

Therefore, today, American consumers are just as likely (if not more likely) to see blueberries produced in British Columbia than in Spokane, bell peppers produced in Ontario than in Des Moines, or tomatoes grown in Baja than in Miami, than fruit and vegetables produced just down the road in their local grocery stores.

Consequently, businesses, recognizing the opportunity for profitability as well as the arbitrage created by this flawed process, are rapidly expanding operations overseas. This is a rational response by any enterprise to avoid irrational costs.

Unfortunately, this circumstance jeopardizes U.S. national security while breaking the financial backs of American farmers and ranchers trying desperately to retain their legacy family operations. Most farms and ranches in America, as we know but politicians tend to forget, have been owned and operated by the same families for generations.

This drag on the sustainability of agricultural employers cannot be tolerated. That is the message NCAE delivered to the White House. I encourage all employers to stand with NCAE and make sure your politicians, state and federal, have the courage to stand with us too.

— Michael Marsh, president & CEO, National Council of Agricultural Employers


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