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Abstract

The U.S. farm labor shortage has become a significant threat to the agriculture industry.  Though the H-2A program provides an opportunity for farmers to legally obtain alien labor, most farmers are not interested in this program because they feel it is expensive, complicated, misdirected, and overly bureaucratic.  In this research paper, I plan to explore the ethical implications of accommodating farmers’ needs over workers’, and vice versa.  Farmers who participate in the H-2A program are required to provide free housing, food, and transportation to H-2A workers, on top of paying them a generous wage for the industry.  However, farmers are not required to provide these benefits to workers who are citizens of the United States.  Some farm labor advocates claim that failure to provide this service to H-2A workers is unethical, while many farmers claim that the effects of these requirements will result in higher food prices and failed farms.

The Farm Labor Crisis and the Need for H-2A Program Reform

In recent years, the U.S. farm labor shortage has reached crisis levels.  Though the H-2A program provides an opportunity for farmers to legally obtain alien labor, most farmers are not interested in this program because they feel it is expensive, complicated, misdirected, and overly bureaucratic.  To prevent catastrophic financial damages in the agriculture industry, the U.S. must reform the H-2A program to meet farmers’ needs before accommodating alien workers.

The Farm Labor Shortage

The U.S. farm labor force has shrunken considerably over the last few years.  The Congressional Desk (2009) succinctly summed up the labor shortage, stating:

The labor needs of the nation’s agriculture industry remain consistent.  Across the country, farmers are reporting that they do not have enough labor to plant, tend and harvest their crops.  There are not enough workers to milk cows.  As a result, farmers have been forced to decrease the size of their farms and switch to less labor intensive and less profitable crops.  Efforts have been made for years to get Americans to do the work, but they simply won’t do it.  Other farmers are simply closing up shop.  Between 2007 and 2008, 1.56 million acres of farmland were shut down in the United States.  (p. 1)

A study conducted by Dr. Parr Rosson reported that, from 2004 to 2007, there was a “20 percent to 25 percent average labor shortage in field operations ranging from fruit and vegetable farms to nursery and dairy operations” (Fannin, 2008, p. 1).  Rosson also reported that “with a 20 percent labor loss, the value of business activity comes out to $363 million in losses, some $545 million in lost income and 9,260 lost jobs as we go through those periods of labor shortages” (Fannin, 2008, p. 1).

But why is the U.S. farm labor force shrinking at such a rapid rate?  According to John D’Arrigo, president of D’Arrigo Brothers Co., the labor shortage is the result of, among other things, “a lack of second-generation interest in field work” (Akkad, 2006, p. 1).  The Associated Press (2006) reported several additional causes:

Growers say tightened border security and longer lines for day crossers have cut the numbers of farm workers who cross the border legally or illegally.  Illegal immigrant workers who used to travel the country picking different crops as the seasons changed are hesitant to migrate for fear of being caught.  And the lure of higher paid jobs with better working conditions, such as construction, are keeping some farm workers away.  (p. 1)

Recent years have proven that the farm labor shortage is a serious issue that could cause significant damage to the U.S. agriculture industry, with effects rippling throughout every aspect of American life.  The Congressional Desk (2009) reported that “for every job lost on family farms and ranches, the country loses approximately three jobs in other agriculture-related industries” (p. 1).  Desperate for help, some farmers have resorted to using a government program designed to provide farm labor for those who need it.

The H-2A Program

Simply put, the H-2A program was formulated to allow farmers to bring alien workers to the U.S. to work in their fields.  The U.S. Department of Labor (2009) describes the role of the H-2A program as:

The H-2A temporary agricultural program establishes a means for agricultural employers who anticipate a shortage of domestic workers to bring nonimmigrant foreign workers to the U.S. to perform agricultural labor or services of a temporary or seasonal nature.  “Temporary or seasonal nature” means employment performed at certain seasons of the year, usually in relation to the production and/or harvesting of a crop, or for a limited time period of less than one year when an employer can show that the need for the foreign workers(s) is truly temporary.  (p. 1)

The U.S. Department of Labor (2009) further defines the regulations for the H-2A program, stating:

Before the U.S. Citizenship and Immigration Services (USCIS) can approve an employer’s petition for such workers, the employer must file an application with the Department stating that there are not sufficient workers who are able, willing, qualified, and available, and that the employment of aliens will not adversely affect the wages and working conditions of similarly employed U.S. workers.  The statute and Departmental regulations provide for numerous worker protections and employer requirements with respect to wages and working conditions that do not apply to nonagricultural programs.  The Department’s Wage and Hour Division, Employment Standards Administration (ESA) has responsibility for enforcing provisions of worker contracts.  (p. 1)

This is merely a snapshot of the regulations and steps involved in the H-2A employer application process.  The U.S. Department of Labor provides extremely elaborate instructions regarding the specific conditions employers must meet before they can complete the H-2A application process.  These instructions cover recruitment, wages, housing, meals, transportation, workers’ compensation insurance, tools and supplies, the three-fourths guarantee, the fifty percent rule, labor disputes, a certification fee, and other conditions.  The following sections explain what employers must do to meet each of these conditions.

Recruitment

According to the U.S. Department of Labor (2009), the employer must do the following to meet the recruitment conditions:

The employer must agree to engage in independent positive recruitment of U.S. workers.  This means an active effort, including newspaper and radio advertising in areas of expected labor supply.  Such recruitment must be at least equivalent to that conducted by non-H-2A agricultural employers in the same or similar crops and area to secure U.S. workers.  This must be an effort independent of and in addition to the efforts of the State Workforce Agency (SWA).  In establishing worker qualifications and/or job specifications, the employer must designate only those qualifications and specifications which are essential to carrying out the job and which are normally required by other employers who do not hire foreign workers.  (p. 2)

To paraphrase, employers have to advertise in local newspapers and on both English- and Spanish-speaking radio stations so local workers receive priority consideration for the open positions.  This method of advertising continues until the employers receive their needed workers.  However, this does not mean that the SWA will stop advertising.

Wages

According to the U.S. Department of Labor (2009), the employer must do the following to meet the wage conditions:

The wage or rate of pay must be the same for U.S. workers and H-2A workers.  The hourly rate must also be at least as high as the applicable Adverse Effect Wage Rate (AEWR), federal or state minimum wage, or the applicable prevailing hourly wage rate, whichever is higher.  The AEWR is established every year by the Department of Labor for every state except Alaska.  Employers should consult with the SWA or the Department of Labor National Processing Center to determine what the rate is for their state.

If a worker will be paid on a piece rate basis, the worker must be paid the prevailing piece as determined by the SWA.  If the piece rate does not result in average hourly piece rate earnings during the pay period at least equal to the amount the worker would have earned had the worker been paid at the hourly rate, then the worker’s pay must be supplemented to the equivalent hourly level.  The piece rate offered must be no less than what is prevailing in the area for the same crop and/or activity.  (p. 2)

This means that the hourly rate for H-2A workers is determined by one of three factors: the Adverse Effect Wage Rate (AEWR), the federal or state minimum wage, or the prevailing hourly wage rate, whichever is higher.  The AEWR report available through the U.S. Department of Labor (2009a) reveals that a state’s AEWR is typically higher than the federal or state minimum wage.  According to this report, Arkansas has the lowest AEWR in the U.S., coming to $8.41 an hour (p. 1).  However, Arkansas’s AEWR is considerably higher than its state minimum wage of $6.25 an hour (U.S. Department of Labor, 2009b, p. 1).  Basically, an hourly H-2A worker employed anywhere in the U.S. will never earn less than $8.41 an hour, and an hourly H-2A worker employed in Arkansas could possibly make $2.16 an hour more than a U.S. citizen in a similar position at a farm that does not participate in the H-2A program.

Housing

According to the U.S. Department of Labor (2009c), the employer must do the following to meet the housing conditions:

The employer must provide free housing to all workers who are not reasonably able to return to their residences the same day.  Such housing must be inspected and approved according to appropriate standards.  Housing provided by the employer shall meet the full set of DOL Occupational Safety and Health Administration (OSHA) standards set forth at 29 CFR 1910.142 or the full set of standards at 654.404-645.417.  Rental housing which meets local or state health and safety standards also may be provided.  (p. 2)

Meals

According to the U.S. Department of Labor (2009c), the employer must do the following to meet the meal conditions:

The employer must provide either three meals a day to each worker or furnish free and convenient cooking and kitchen facilities for workers to prepare their own meals.  If meals are provided, then the employer may charge each worker a certain amount per day for the three meals.  (p. 3)

Transportation

According to the U.S. Department of Labor (2009c), the employer must do the following to meet the transportation conditions:

The amount of transportation payment shall be no less (and shall not be required to be more) than the most economical and reasonable similar common carrier transportation charges for the distances involved.  The employer is responsible for the following different types of transportation of workers:  (1) After a worker has completed fifty percent of the work contract period, the employer must reimburse the worker for the cost of transportation and subsistence from the place of recruitment to the place of work if such costs were borne by the worker.  (2) The employer must provide free transportation between the employer’s housing and the worksite for any worker who is provided housing.  (3) Upon completion of the work contract, the employer must pay economic costs of a worker’s subsistence and return transportation to the place of recruitment.  Special conditions apply when the worker will not be returning to the place of recruitment because of another job.  If the employer must advance transportation costs to foreign workers or provide transportation, the employer must advance such costs or provide transportation to U.S. workers as well.  In addition, if it is prevailing practice in the occupation to provide transportation, the employer must provide transportation to U.S. workers, as well.  (p. 3)

Workers’ Compensation Insurance

According to the U.S. Department of Labor (2009c), the employer must do the following to meet the workers’ compensation insurance conditions:

The employer must provide workers’ compensation insurance where it is required by state law.  Where state law does not require it, the employer must provide equivalent insurance for all workers.  Proof of insurance coverage must be provided to the National Processing Center before certification is granted.  (p. 3)

Tools and Supplies

According to the U.S. Department of Labor (2009c), “The employer must furnish at no cost to the worker all tools and supplies necessary to carry out the work, unless it is common practice in the area and occupation for the worker to provide certain items” (p. 3).

Three-Fourths Guarantee

According to the U.S. Department of Labor (2009c), the employer must do the following to meet the three-fourths guarantee conditions:

The employer must guarantee to offer each worker employment for at least three-fourths of the workdays in the work contract period and any extensions.  If the employer affords less employment, then the employer must pay the amount which the worker would have earned had the worker been employed the guaranteed number of days.  (p. 3)

Clarification and context for this condition is best provided in the form of an example scenario.  If an H-2A worker’s contract states that they are to work 60 hours per week, but for whatever reason the fields are unworkable for one week, the employer is responsible for paying the H-2A worker for 45 hours that week.

Fifty Percent Rule

According to the U.S. Department of Labor (2009c), “The employer must hire any qualified and eligible U.S. worker who applies for a job until fifty percent (50%) of the period of the work contract has elapsed” (p. 3).

The fifty percent rule ties back to the conditions regarding recruitment.  For the first half of the period of the work contract, the employer must hire every willing and able U.S. applicant, even if the positions are filled by H-2A workers.  Though the employer may have stopped advertising the open positions via newspaper and radio ads, the SWA will continue to refer U.S. applicants until fifty percent of the period of the work contract has elapsed.

Labor Dispute

According to the U.S. Department of Labor (2009c), “The employer must assure that the job opportunity for which H-2A certification is being requested is not vacant because the former occupant is on strike or is being locked out in the course of a labor dispute” (p. 3).

Certification Fee

According to the U.S. Department of Labor (2009c), “A fee will be charged to an employer granted temporary foreign agricultural, labor certification.  The fee is $100, plus $10 for each job opportunity certified, up to a maximum fee of $1,000 for each certification granted” (p. 3).

Other Conditions

According to the U.S. Department of Labor (2009c), the employer must do the following to meet all other conditions:

The employer must keep accurate records with respect to a worker’s earnings.  The worker must be provided with a complete statement of hours worked and related earnings on each payday.  The employer must pay the worker at least twice monthly or more frequently if it is the prevailing practice to do so.  The employer must provide a copy of a work contract or the job order to each worker.  (p. 3)

Farmer Oppositions to the H-2A Program

Though the H-2A program exists to relieve the farm labor shortage, many farmers opt out of using it.  Watanabe (2008) reported that growers hired only 75,000 farm workers through the H-2A program (p. 1).  There’s no denying that the H-2A program is complicated, but farmers in opposition to the program have substantial complaints about many of its facets.  According to J Carnes, a farmer in the Winter Garden area of Texas, the H-2A program “is unworkable” (Smith, 2007, p. 1).  Carnes elaborated on his dissatisfaction with the H-2A program, stating:

I don’t use it.  We rely on different avenues to find legal workers.  H-2A satisfies only 2 percent of agriculture workforce needs.  It’s bureaucratic, litigious, and not a viable option for most of agriculture—it simply can’t provide the volume of workers we need to stay in business.  (Smith, 2007, p. 1)

Watanabe (2008) noted that farmers have had problems with the H-2A program because of the housing requirements.  Some growers have faced opposition to H-2A housing from local communities.  Other farmers with short-season crops find it pointless to build housing to support workers for only a few weeks out of the year.

Many farmers find it simply too expensive and complicated to utilize the H-2A program.  Smith (2008) wrote that “the average man-hour cost for a farmer to use H-2A is $14 to $15 per hour, if a farm does not already have adequate housing” (p. 1).  Smith (2008) also reported that, if a U.S. citizen wants a job during the first half of a labor contract, farmers have to lay off the H-2A worker and hire the U.S. citizen.

This complex situation is exacerbated by the three-fourths guarantee stated in the H-2A compliance guidelines.  Since the H-2A worker is guaranteed a predetermined amount of hours in his contract, the employer is responsible for paying the H-2A worker for 75% of their contract hours, even if his position was surrendered to a U.S. citizen.  As a result, the farmer ends up paying the U.S. citizen for 100% of the work performed, and the H-2A worker 75% of his predetermined wages for no work at all.  When all is said and done, the employer essentially pays an extra 75% for a position that was already filled.

Complicated bureaucracy aside, growers complain that the H-2A program requires them to apply for workers too far in advance.  Earlier versions of the H-2A program required growers to apply for workers at least 45 days before the labor was needed.  President Bush revised this rule in December 2008, extending the application window requirement to 60 days.  Jack King, a spokesman for the California Farm Bureau Federation, responded to this revision by stating, “There is a lot of uncertainty when help will be needed in California, but under H-2A you almost need a crystal ball” (Watanabe, 2008, p.1).

This situation leaves U.S. farmers in an interesting dilemma.  Faced with fewer alternatives each growing season, more and more farmers are resorting to the H-2A program out of pure desperation.  However, most of these farmers report that the program is not the ideal solution, and are rather vocal about the aspects that need to change.

Requested Reforms

Summoning the maverick attitudes of the generations of farmers who made the agriculture industry what it is today, growers across the nation are stepping up and speaking out for H-2A program reform.  Eric Schwartz, president of Dole Fresh Vegetables, stated, “The H-2A process is a cookie-cutter solution that won’t work in the long term or across the board” (Akkad, 2009, p. 1).

Watanabe (2008) reported that California farmers are concerned with two major issues with the H-2A program:  modifying the housing requirement and extending eligibility to dairy workers.  Instead of paying for accommodations for H-2A workers, farmers seek to provide vouchers to help them pay for outside accommodations.  Because the dairy industry operates year-round, dairies are not eligible for the H-2A program, which is designed specifically for temporary workers.  Modifying these two aspects of the H-2A program could greatly benefit farmers across the nation.

Growers across the nation are concerned with additional issues with the H-2A program.  The determination of H-2A wages is a hot topic among those requesting H-2A reform.  Farmers would like to base H-2A workers’ wages on the prevailing wage in the area (B. Thiel, personal communication, October 6, 2009).  As defined in the conditions for wages, H-2A workers’ wages are determined by whichever is higher:  the AEWR, state or federal minimum wage, or the region’s prevailing wage rate.  The AEWR is almost always the highest of the three, and many farmers cannot afford to pay workers more than the prevailing wage rate in their area (Carr, 2004).

Beyond wages, U.S. farmers would like a shorter application time frame when requesting H-2A workers.  Employers have a hard time applying for the H-2A program because it is nearly impossible to anticipate labor needs 60 days in advance (B. Frasier, personal communication, October 4, 2009).  Additionally, growers would like to change the fifty percent rule—which requires that employers hire all U.S. applicants for the first half of the labor contract period—to allow a shorter time period to determine that farmers’ needs cannot be met by the local workforce (C. Carr, personal communication, October 10, 2003).

Case Study

Chalmers Carr III, Ridge Spring, South Carolina

Chalmers Carr III is the owner and CEO of Titan Peach Farms, the largest producer of peaches outside of California.  As a participant in the H-2A program, he seasonally employs up to 250 migrant workers.  Though Carr has substantial complaints about the H-2A program, he is a participant because it is the only way he can be assured of a reliable, legal work force.  Prior to his participation in the H-2A program, Carr feared that a high percentage of his workers were falsely documented, and he knew that Titan Peach Farms could not afford this risk.

Carr feels that his participation in the H-2A program is one of the best and worst business decisions he has ever made.  He is happy with his legal workforce and high worker return rate.  In the five years Carr has participated in the H-2A program, he has received over 200 foreign workers each season.  In that time he has received fewer than 20 domestic referrals, ten of which actually showed up to work, and only two stayed on the job for more than one week.

The rising cost of participation in the H-2A program is penalizing Carr to the point that he can no longer compete with non-H-2A peach growers.  Without H-2A program reform, Carr states that he will have no choice but to leave the program and return to a system where he could be breaking the law by employing falsely documented workers (C. Carr, personal communication, January 28, 2004).

Application of Ethical Perspectives

Many involved in either side of the H-2A debate are simply arguing why their individual needs are greater than those of the people on the other end of the argument.  In situations where both sides feel strongly about their causes, it is often helpful to take a step back and evaluate the arguments in the context of ethical principles.  For this particular issue, I will use the ethical principles of utilitarianism and justice.

Utilitarianism

According to Plante (2004), “Utilitarianism tries to approach ethical issues by asking what would please the most people” (p. 19).  The farm labor issue undoubtedly affects the majority of U.S. citizens in one way or another.  Recently, a 10 percent labor shortage in the dairy industry resulted in a 20 percent drop in milk production.  In Texas alone, this led to a loss of $493 million in dairy production.  Across the nation, this resulted in a loss of $955 million in business activity and 3,900 jobs in dairies and other sectors (Fannin, 2008, p. 1).  Situations like this force producers to pass expenses along to the consumer.  Gavin (2008) reported that milk prices increased 26 percent from 2007 to 2008 (p. 1), and elaborated on the effects of rising food costs, stating:

Higher food costs cut into discretionary income that buys everything from cars to computers to movie tickets and drives the consumer-based U.S. economy.  Falling home values and a faltering stock market have battered consumer confidence, spurring a retrenchment in spending that is contributing to recent job losses and pulling the economy toward recession.  (p. 1)

Simply put, the government must provide the agriculture industry access to affordable, reliable workers to prevent catastrophic job losses and sustain the U.S. economy.  As far as utilitarianism is concerned, it makes perfect sense to cut the wages of nonimmigrant foreign workers to ultimately benefit the 300 million citizens of the United States.

Justice

The focus of the justice approach is treating others in a fair, reasonable, and respectful manner.  Nobody should be the target of discrimination due to their position, status, power, or wealth (Plante, 2004, p. 25).  Justice is an interesting principle in the context of the H-2A program because it exposes discrimination against H-2A workers, foreign workers in other government programs, U.S. workers, and employers.

On one side of the argument, the nonimmigrant foreign workers who receive employment through the H-2A program are being discriminated against because U.S. workers receive priority.  However, if U.S. workers did not receive priority, activist groups would object to the potential sacrificing of American jobs to foreign workers.  Beyond this, nonimmigrant foreign workers at an H-2A operation stand to make more than U.S. workers who work for non-H-2A agriculture operations.

Additionally, H-2A workers receive more protections regarding wages and working conditions than workers employed through similar government programs that cater to other business sectors (U.S. Department of Labor, 2009c, p. 1).  This practice is discriminatory against non-H-2A foreign workers, U.S. workers, and H-2A employers.  One program cannot afford more privileges to its workers or demand more of its participants.

There are several actions the U.S. government must take to remedy these issues in accordance with the justice principle.  First, all open positions should be available to both American and foreign H-2A workers from the beginning of the work contract period.  The fifty percent rule is intrinsically discriminatory against foreign H-2A workers; stating that one person has more of a right to employment than another is in violation of the justice principle.  Secondly, foreign H-2A workers should receive the prevailing hourly wage rate to ensure they are receiving the same compensation as American workers in similar positions.  Lastly, the H-2A program should adopt the worker protections and employer requirements utilized in all other programs.

American farmers are slowly making progress in their mission to revise the H-2A program to better suit the needs of the agriculture industry.  With the amount of available workers dramatically tapering off each year, the government must act quickly to ensure the stability of one of the most iconic and influential industries in American history.  If the American agriculture industry continues its descent, it may become history altogether.


References

Akkad, D. (2006, January 9). Farmworker shortage leaves growers fearing for crops. The Monterey County Herald. Retrieved from http://www.redorbit.com/news/science/351648/farmworker_shortage_leaves_growers_fearing_for_crops/index.html

Associated Press. (2006, October 1). Worker shortage hurting farmers, profits. MSNBC. Retrieved from http://www.msnbc.msn.com/id/15062039/

Carr, C., III. (2004, January 28). Testimony to the United States House of Representatives Agriculture Committee. Address presented at the United States House of Representatives.

Congressional Desk. (2009, May 15). Farm labor crisis: Sen. Feinstein introduces legislation to relieve worker shortage in agriculture. American Chronicle. Retrieved from http://www.americanchronicle.com/articles/view/102558

Falkenberg, L. (2001, January 31). Texas rural leaders back migrant worker program. Amarillo Globe-News. Retrieved from http://www.amarillo.com/stories/013101/tex_ruralleaders.shtml

Fannin, B. (2008, February 15). Lack of immigrant reform program could deepen farm labor shortage woes. AgriLife News. Retrieved from http://agnews.tamu.edu/showstory.php?id=351

Gavin, R. (2008, March 9). Surging costs of groceries hit home. The Boston Globe. Retrieved from http://www.boston.com/business/personalfinance/articles/2008/03/09/surging_costs_of_groceries_hit_home/

Horecka, B. (2008, February 1). Who will work our fields? Texas Farm Bureau Magazine. Retrieved from http://www.txfb.org/newsmanager/templates/TXFBTemplate.aspx?articleid=2570&zoneid=59

Plante, T. G. (2004). Do the right thing: Living ethically in an unethical world. Oakland, CA: New Harbinger Publications.

Preston, J. (2006, September 22). Pickers are few, and growers blame Congress. The New York Times. Retrieved from http://www.nytimes.com/2006/09/22/washington/22growers.html

Smith, R. (2007, June 14). Ag industry needs immigration reform passed before presidential election year. Southwest Farm Press. Retrieved from http://southwestfarmpress.com/legislative/061407-reform-proposals/index.html

Smith, R. (2008, March 12). Changes in H-2A add burdens to employers. Southwest Farm Press. Retrieved from http://southwestfarmpress.com/legislative/immigration-program-0312

U.S. Department of Labor. (2009a, July 17). Adverse effect wage rates – Year 2008. In Foreign labor certification. Retrieved October 6, 2009, from http://www.foreignlaborcert.doleta.gov/adverse.cfm

U.S. Department of Labor. (2009b, July 24). Minimum wage laws in the States. In Wage and hour division. Retrieved October 6, 2009, from http://www.dol.gov/esa/minwage/america.htm

U.S. Department of Labor. (2009c, September 28). H-2A certification. In Foreign labor certification. Retrieved October 6, 2009, from http://www.foreignlaborcert.doleta.gov/h-2a.cfm

Watanabe, T. (2008, December 12). U.S. farm labor rules revamped. Los Angeles Times. Retrieved from http://articles.latimes.com/2008/dec/12/nation/na-farmworkers12

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