A U.S. Department of Labor effort to make a foreign worker program cheaper for farmers appears unlikely to succeed.
Effectively, the Trump administration’s labor department wants to lower the minimum wage for most H-2A workers — foreign laborers who perform seasonal U.S. agriculture jobs. The change would generally help farmers save on labor costs and decrease worker earnings.
An Idaho necessity
Idaho farmers need the H-2A program — without it they wouldn’t be able to find workers. South-central Idaho farmers employed 1,249 H-2A workers in 2019 while Idaho as a whole employed 4,433.
This year, Idaho farmers employed 3,656 H-2A workers between January and September, according to the United Farm Workers’ lawsuit.
Idaho farmers say even though ag jobs pay fairly well — H-2A workers earn a minimum of $13.62 an hour and get free housing and transportation if they want it — U.S. workers are unwilling to work on farms.
U.S. Department of Agriculture Secretary Sonny Perdue said in November that the would-be change shows “President Trump’s commitment to America’s farmers by delivering lower costs when they need it the most.”
Farmer advocacy groups have generally supported the idea, while farmworker labor groups immediately took legal action against the move.
United Farm Workers sought a preliminary injunction against the Department of Labor in November and District Court Judge Dale Drozd on Wednesday issued that injunction, temporarily blocking the Trump Administration from enacting the change. The changes were actually in effect from Dec. 21 until Drozd’s ruling.
What the change would do
To understand why the changes matter you have to understand how the government calculates the H-2A minimum wage.
Every H-2A worker earns, at minimum, the “Adverse Effect Wage Rate.” The Department of Labor basically calculates that number by averaging the wages of field and livestock workers. In Idaho, that comes out to $13.62 an hour, nearly double the state’s minimum wage.
Some Idaho farmers say $13.62 an hour is too high. It’s high by design. H-2A’s purpose is to help farmers find labor without costing U.S. workers jobs. The goal of the Adverse Effect Wage Rate is to set a good enough wage that H-2A workers aren’t simply undercutting the U.S. labor market.
Employers have to advertise jobs to U.S. workers before hiring an H-2A employee, and many farmers say they’d prefer to hire domestic workers if they could. It’d be cheaper, they say — plus they’re legally required to hire U.S. applicants.
The problem, some farmers say, is U.S. workers don’t want to be in ag even though the wages are relatively good. Idaho farmers rarely find any local people willing to do farm work.
The Department of Labor changes would address some of the concerns raised by farmer advocacy groups.
First, the new H-2A rules would freeze the minimum wage for two years. Starting in 2023, annual wage changes would be based on the U.S. Bureau of Labor Statistics’ Employment Cost Index, not the Adverse Effect Wage Rate (which comes from the USDA’s Farm Labor Statistics). (The Department of Labor tried to simply stop collecting farm labor data, but Drozd ruled in October that the department couldn’t do that.)
Farm groups want the switch to the Employment Cost Index calculation because it would decrease labor costs. For instance, the national Adverse Effect Wage Rate increased 6% last year (although it only went up 1% in Idaho). The nationwide rate has risen from $10.22 in 2011 to $13.99 this year, a 37% increase. Idaho’s wage increased 37% in that time.
The Employment Cost Index increases less, on average — typically between 1.5% and 3% every year.
Snake River Farmers Association Executive Director Joel Anderson said the change would be helpful for Magic Valley farmers.
“That would have made those wages more predictable and more keeping-pace with what the local economic costs of business are,” Anderson said, noting that the Adverse Effect Wage Rate has been spiraling upward in the last few years.
He added that it’s hard for farmers to plan their budgets because the Adverse Effect Wage Rate can fluctuate annually.
But there’s another piece to the Department of Labor’s efforts. Under the new, likely doomed system, H-2A jobs would have been split into two classes: Laborers who work directly in agriculture — picture someone who drives a tractor or literally works in the field — and more skilled laborers who are one step removed from ag, such as bookkeepers, mechanics or supervisors.
All H-2A workers currently earn the same minimum, so that split would significantly increase the wages for ag workers in ancillary roles. For instance, according to Indeed.com, an average Idaho mechanic makes about $19.50 an hour.
Wage increases for those positions would have been problematic, Anderson said, even though Snake River Farmers Association members mainly employ H-2A workers who fall into the “traditional” ag jobs category. Prior to Drozd’s decision, Anderson said his association was gearing up to fight the Department of Labor on the split and its definitions.
The changes the Department of Labor wants probably won’t happen and even if the changes did happen, the Biden administration could choose to overturn them.