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A Perfect Storm of Labor Issues?

Labor issues have become one of the most significant challenges facing our efforts to move past the trauma to our food system caused by Covid. What’s just as bad, they complicate our efforts to combat the extraordinary inflationary pressures facing food consumers everywhere.

Labor issues are a complex mix of events and circumstances coming together in a perfect storm of real – and potentially expanding – challenges to our entire food system. In response, labor advocates and supportive politicians advance policies to attract and entice reluctant workers, with scant attention to the resulting higher labor costs, or the inflationary pressures they create for food consumers. The storm is becoming increasingly visible across the country.

California Governor Gavin Newsom recently generated headlines by changing his stance and initial policies by signing a controversial bill to expand the ability of farm unions to organize. Supporters of the measure say it will help workers build the strong unions needed to obtain the wages and work conditions they want and deserve. Detractors point to the potential for additional labor costs and the continuation of food price inflation – and workers to face pressure from union organizers to join – and risk retaliation of some form because their ballots will no longer be secret.

More than a Political Dispute

California’s 69,000 farms and ranches support about 1.2 million jobs, growing grapes, almonds, dairy products, lettuce, berries, oranges, rice, and other crops. The health of the agricultural sector is vital to the state’s economy – and our nation’s food supply.

In New York, officials have approved a change in regulations that reduce the threshold for overtime from 60 hours to 40 hours for farm workers, phased in over a 10-year period. Progressive organizations champion the move. But farmers say the change may work against worker interests. They note the price pressures that limit their margins and inability to pass higher costs on to a reluctant buyer. New York taxpayers noted that the bill contains a reimbursement clause that will shift at least some of the costs to the state taxpayer.

The Golden State also is pondering an increase in the California minimum wage, from $15.00 an hour to $22.50. Minimum hourly wages vary from state to state, generally between $7.25 to $15.00. But whatever the mandated minimum, higher wages mean higher costs to somebody – and most often, the consumer winds up at the end of the chain. Your Big Mac just got more expensive.

Will consumers accept higher food costs that may be generated in addressing these complex labor issues? Will taxpayers support the use of tax monies to fund mandated labor conditions? Or have consumers built up a resistance to further price rises? As one California grower pointed out to the media, when the labor cost exceeds what I can get from the market for my crop, I have no choice but to leave it in the field.

Who are ‘Agricultural Workers?’

The Bureau of Labor Statistics (BLS) describes farm workers as those who maintain crops and tend livestock, performing physical labor and operating machinery under the supervision of farmers, ranchers, and other agricultural managers.

BLS estimates the total number of agricultural workers across the country at 876,900 in 2021, roughly 90 percent categorized as crop and animal workers. The remainder is essentially equipment operators, breeding specialists, and various technical experts.

BLS also records another 210,000 workers in the various industries supporting farmers, including truckers, equipment maintenance and repair specialists, supply delivery personnel, and related farm service organizations.

It’s All About People, Not Just Numbers

The cold labor data fails to capture a critical element of the current labor issue. People, not tables and charts and technological innovations, make the modern agricultural system function. Someone has to turn on the switch, after all. And maybe more relevant to the current situation, someone must do the hard, hard physical labor that farming and ranching still entails.

Source for image: AgAmerica.com.

Much of the agricultural world still depends upon people willing to pick and harvest crops, especially the fruit and vegetables essential to a healthy diet. Farmers need help operating the complex equipment that goes into planting, protecting, and nurturing crops, herds, and flocks. They sometimes need special knowledge and skills to operate dairy farms, maintain healthy birds and cattle, or manage complex regenerative cropping systems.

Above all, they need help that is not just available but reliably available. The Covid era ushered in a new attitude among many workforce segments – a simple unwillingness to commit to doing much of the essential farm work that makes the whole system sustainable. Farmers and ranchers increasingly complain not just of the difficulty of recruiting help, but in finding help actually willing to show up, day after day.

Labor interests ask for more – but not just more money, but more control over workplace conditions, family support, job flexibility, time off, and other deeply personal considerations. The recent threat of a major railroad strike brought this new reality home when workers made work-life balance a significant issue in negotiations, far more than the agreed-upon 24% wage increase.

The importance of farm labor has been magnified by another simple change – a smaller and aging cadre of on-farm work.

The average age of a U.S. farmer today is 57.5 years, up more than a full year in the past decade. (Other estimates place the average age of principal farm operators at 59.4.) The large majority of U.S. farms may still be family owned. But fewer of those family members seem interested in staying on the farm and even less inclined to take on sole responsibility for the steady and unrelenting hard labor that farming still demands.

Doesn’t Immigrant Labor Offset This?

Immigrant labor – legal and illegal — has been the primary source of relief for the labor pains felt on the farm and ranch. AgAmerica’s analysis of the labor situation estimated that as much as 73 percent of the U.S. agricultural labor force comprises immigrants, compared with just 13 percent of immigrants in the overall U.S. population.

Government agencies also are anxiously awaiting November’s fiscal-year-end labor report from BLS, both to assess trends in agricultural employment and to examine what, if any, effect the recent wave of immigration at the southern U.S. border may be having on the situation. Border authorities report more than 2 million encounters with people trying to enter the country in the first 11 months of fiscal 2022.

Immigration reform advocates contend that in addition to the 1.3 million immigrants released into the United States, up to another 1 million may have slipped past border authorities. While the exact figures are subject to debate, the influx is significant enough to prompt animated discussion on the need for immigration reform to bring greater order to the integration of a potentially sizeable addition to the agricultural labor force.

Dirt to Dinner will monitor the BLS report due in late November and continue to report on significant insights it may contain.

Is the Produce Industry in a Pickle?

The problem affects almost all segments of modern agriculture. But none seems to face a larger immediate challenge than the world of produce. Physical labor remains absolutely essential to economic survival for fruit and vegetable producers. As recently as 2012, the National Resources Defense Council (NRDC) estimated that as much as 20 percent of U.S. produce never left the field due to labor shortages. A 2019 study by Santa Clara University pegged the waste figure at a whopping 33.7 percent, with labor shortages cited as a major factor.

The problem is critical in the western United States, where the produce industry is a massive element of state and national economies. Growers warn that shortages in field labor might mean spot shortages or disruptions to the normal flow of goods to market. In other words, lingering labor issues could contribute to a repeat of some of the supply disruptions seen during the Covid pandemic. Dealing with such labor-driven disruptions is the driving force behind creating the H-2A ‘guest worker” program.

The U.S. Labor Department’s H-2A program began in 1986 to allow producers to bring in temporary workers when domestic workers are unavailable. The program has been a big help to producers – with the total number of these agricultural visas quadrupling since 2007.

NRDC also notes that up to half of all farm workers are undocumented immigrants. State Department data cited by USA Facts notes that while requests for visas into the United States for tourism, schooling, and work declined sharply during Covid, agricultural visa requests actually rose.

As impressive as those numbers may be, farmers and ranchers quickly say the labor problem continues to be a big challenge. The H-2A program comes in for particular criticism for its complex filing processes, long time frames, and general bureaucratic hassles – all anathema to harried farm operators. Few, if any, observers expect progress on the underlying problem of immigration reform at the federal level. Likewise, farm managers and others across the food chain question how the changing attitudes toward work that have emerged in a Covid and post-Covid world will play out among the overall U.S. workforce.

So What are We Doing about the Problem?

In the interim, efforts to deal with the labor issue have taken several directions.

• Higher wages 

The U.S. Bureau of Labor Statistics reports media pay for farm labor at $14.27 per hour in 2021, or just under $30,000 per year. Equipment operators, breeders, and other specialized skill positions pay a bit more, averaging $36,000-40,000. Analysis by the U.S. Department of Agriculture’s Economic Research Service shows an 8 percent increase in overall farm labor wages. It’s simple economics: more money stimulates supply, and labor is no different.

• Further reform of the H-2A program

Legislation to streamline the process and reduce at least some of the most frustrating aspects of its administration are pending in Congress, with broad bipartisan support. But the political thicket remains in full force, with lingering differences of opinion still to be resolved.

• Accelerated adoption of technology where economically feasible

Innovation in farm-related automation and robotics offers help if not an outright solution. Artificial intelligence, drone technology, and other emerging tools for the farmer and rancher no longer seem so far away or economically out of reach. But ag economists also caution that such investments will be made only if they show a return.

Farmers must feel confident that the additional spending will help the bottom line, not hurt it. Many also point to the risks of becoming too dependent on technology, as called to mind by the recent global shortage of computer chips and growing cyber-security threats from an aggressive international hacker community.

• Changed farming focus

Perhaps in exasperation or necessity, some farmers report moving away from labor-intensive crops and farming. A few cite the frustrations of modern agriculture – especially on the labor front – as a growing reason to retire early or cease farming altogether. Credible data on the extent of this change remains elusive. But the subject comes up too frequently to be ignored.