The Trump administration is moving ahead with a federal rule that would freeze pay for many agricultural guest workers for the next two years, even as they remain essential personnel during a pandemic.
The new regulation would change the methodology used to determine the prevailing wage rates for workers with H-2A visas. Until now, minimum pay rates for most of these workers were set by a survey the U.S. Department of Agriculture conducts twice a year, asking farms for data on their workers’ hours and earnings. The Trump administration has tried to suspend that survey and intends to base future pay increases on data from the Labor Department starting in 2023.
In the intervening years, the prevailing wage rates, which vary from state to state, would remain at their 2019 levels, leaving workers’ pay stagnant. Once pay increases resumed, experts say they would likely be smaller for most fieldworkers than they would have been under the previous methodology.
Workers on H-2A visas come from Mexico and other countries to work temporarily on U.S. farms, typically picking and processing crops. Worker advocates say the wide use of guest workers means the farm labor market does not function like a free market, since these foreign workers are poorer and more willing than Americans to accept below-market pay.
“It’s just cruel and unreasonable.”
Under the law, employers have to pay guest workers a minimum prevailing wage ― known as the Adverse Effect Wage Rate (AEWR) ― so that their pay isn’t so low that it undercuts that of U.S. workers. In most cases, that prevailing wage comes from the survey that Agriculture Secretary Sonny Perdue has moved to suspend.
The Labor Department published the new regulation last week. Senior agency officials said on a call with reporters just before Election Day that the change would give employers more stability and predictability when it came to wage increases. They described the current pay rates determined by the agricultural survey as too volatile, making it hard for employers to plan their payrolls each year.
“It is a victory for farmers, agricultural workers, and the American people, who rely on a vibrant agricultural sector to supply food for our families,” John Pallasch, the Labor Department’s assistant secretary for employment and training, said in a statement.
But as the agency’s own analysis shows, the rule would undoubtedly bring growers long-term savings on labor costs relative to the status quo.
The text of the rule says it would lead to “transfer payments” of an estimated $1.68 billion over 10 years. As a Labor Department chart makes clear, that term is a euphemism: H-2A workers would be transferring $1.68 billion to their employers, in the form of lost wages.
From the Labor Department’s rule:
Last year, farmworkers who weren’t supervisors earned $13.99 per hour on average, compared with $23.51 for production workers outside agriculture.
Farmworker Justice, an advocacy group for migrant workers, called the new regulation “cruel.”
“The government has designated farmworkers as essential workers; they’re expected to work during a pandemic,” Bruce Goldstein, the group’s president, told HuffPost. “The federal government refused to mandate safety standards to protect farmworkers and others against COVID-19. Now the administration is punishing farmworkers by effectively cutting their wage rates. It’s just cruel and unreasonable.”
Farmworker Justice estimates that the new rule would directly impact more than 200,000 workers.
Goldstein said the incoming Biden administration could move to reverse the rule, but it would take at least a few months and perhaps longer to do so through the federal rulemaking process. He expects that the wage freeze would apply to the 2021 season at the least. He said the Trump administration was likely moving as quickly as possible with the rule before being forced out of office.
The administration published the rule after the election but before Biden was projected to be the winner. It has been in the works for more than a year.
The United Farm Workers union sued to prevent the farm labor survey from being ended, and a federal judge recently granted a temporary restraining order and preliminary injunction against the Agriculture Department. In his order, the judge said the USDA offered “no indication that [it] considered the impact on farmworker wages caused by its decision to eliminate” the survey.
The government must continue the survey for now, but the Trump administration does not have to use the survey to set prevailing wages for workers.
The agriculture industry doesn’t like the survey because it’s typically led to pay rates well above those set by local minimum wage laws. The industry claims the methodology skews the wage rates too high. This year the prevailing wage rates range from $11 to $16 an hour, whereas most state minimum wages are well below that and the federal minimum wage is still just $7.25 an hour.
A lobbyist for the American Farm Bureau Federation wrote earlier this year that the wages determined by the survey make it hard for farms “to stay open for business and compete against imports from countries with lower labor costs.”
Under the Trump administration’s plan, the prevailing wage rates would freeze until 2023 even as wages in the broader labor market are likely to rise. Then the savings for growers would be locked in, as the rates increased thereafter according to a wage index.
Daniel Costa, an immigration policy expert at the left-leaning Economic Policy Institute, said the index preferred by the Trump administration might produce bigger increases for some higher-skilled workers on farms. But the vast majority of guest workers would see smaller wages than they would have under the current system, hence the “transfer payments” going to employers.
In an analysis, Costa found that fieldworkers’ wages rose an average of 3.6% each year between 2010 and 2019 based on the survey; under the index proposed in the new rule, they would have risen at an annual rate of just 2.3%.
Over time, Costa said, the impact could be significant. The fact that guest workers would receive smaller pay hikes could soften wage increases for U.S. workers as well. The change would also allow farms to advertise lower pay than they would have under the survey, making the positions less attractive to U.S. workers.
“This is absolutely a wage cut for migrants who are H-2A farmworkers,” he said. “H-2A farmworkers will not benefit from any natural wage growth that occurs [until 2023] ― during what farm owners are saying is a severe labor shortage, which is exactly when you would expect wages to grow in a free market.”