Farm Labor Shortages and Immigration Policy
Released: 2009-11-09T00:00:00

Introduction

Questions often have arisen over the years about (1) whether sufficient workers are available domestically to meet the seasonal employment demand of perishable crop producers in the U.S. agricultural industry and (2) how, if at all, the Congress should change immigration policy with respect to farm workers. Immigration policy has long been intertwined with the labor needs of crop (e.g., fruit and vegetable) growers, who rely more than most farmers on hand labor (e.g., for harvesting) and consequently "are the largest users of hired and contract workers on a per-farm basis." Since World War I, the Congress has allowed the use of temporary foreign workers to perform agricultural labor of a seasonal nature as a means of augmenting the supply of domestic farm workers. In addition, a sizeable fraction of immigrants historically have found employment on the nation's farms.

More recently, attention has focused on the growing share of the domestic supply of farm workers that is composed of aliens who are not authorized to work in the United States. The U.S. Department of Labor (DOL) estimated that foreign-born persons in the country illegally accounted for 37% of the domestic crop workforce in FY1994-FY1995. Shortly thereafter (FY1997-FY1998), unauthorized aliens' share of workers employed on crop farms reached 52%. By FY1999-FY2000, their proportion peaked at 55% before retreating somewhat to 53% in the first half of the current decade.

Although a number of studies found that no nationwide shortage of domestic farm labor existed in the past decade, a case has been made that the considerable presence of unauthorized foreign-born workers in seasonal agriculture implies a lack of legal workers relative to employer demand. Arguably, the purported imbalance between authorized-to-work farm labor and employer demand would become more apparent were the supply of unauthorized workers curtailed sufficiently—a fear that has plagued growers for some time.

Crop producers and their advocates have testified at congressional hearings and asserted in other venues that they believe the latest risk of losing much of their labor force comes from efforts by the Bureau of Citizenship and Immigration Services and the Bureau of Immigration and Customs Enforcement within the Department of Homeland Security (DHS) to step-up employment verification and enforcement activities, in concert with mailings of no-match letters by the Social Security Administration (SSA). Growers have asserted that these activities disrupt their workforces by increasing employee turnover and therefore, decreasing the stability of their labor supply. The perception that government actions negatively affect U.S. agriculture has prompted a legislative response in the past.

This report first examines the composition of the seasonal agricultural labor force and presents the arguments of grower and farm worker advocates concerning its adequacy relative to employer demand. The report next analyzes trends in employment, unemployment, time worked, and wages of authorized and unauthorized farm workers to determine whether they are consistent with the existence of a nationwide shortage of domestically available farm workers. The farm labor supply-demand situation by geographic area at peak harvest time is examined as well, to ascertain whether spot shortages might exist.

Composition of the Seasonal Farm Labor Force

Immigration legislation sometimes has been crafted to take into account the purported labor requirements of U.S. crop growers. In 1986, for example, Congress passed the Immigration Reform and Control Act (IRCA, P.L. 99-603 ) to curb the presence of unauthorized aliens in the United States by imposing sanctions on employers who knowingly hire individuals who lack permission to work in the country. In addition to a general legalization program, P.L. 99-603 included two industry-specific legalization programs—the Special Agricultural Worker (SAW) program and the Replenishment Agricultural Worker (RAW) program —that were intended to compensate for the act's expected impact on the farm labor supply and encourage the development of a legal crop workforce. These provisions of the act have not operated in the offsetting manner that was intended, however, as substantial numbers of unauthorized aliens have continued to join legal farm workers in performing seasonal agricultural services (SAS).

On the basis of case studies that it sponsored, the Commission on Agricultural Workers concluded in its 1992 report that individuals legalized under the SAW program and other farm workers planned to remain in the agricultural labor force "indefinitely, or for as long as they are physically able." According to the DOL's National Agricultural Workers Survey, two-thirds of so-called SAWs stated that they intended to engage in field work until the end of their working lives.

For many SAWs, the end of their worklives—at least their worklives in farming—may now be near at hand. The diminished physical ability generally associated with aging in combination with the taxing nature of crop tasks could well be prompting greater numbers of SAWs to leave the fields. The Commission on Agricultural Workers noted that the typical SAW in 1990 was a 30-year-old male who "is likely to remain in farm work well into the 21 st century," but DOL estimated the average age of SAW-legalized workers in 2007 was 47. Because relatively few farm workers are involved in crop production beyond the age of 44, and even fewer beyond the age of 54, it appears that the 1986 legalization program has become less useful over time in fulfilling the labor requirements of crop producers.

A combination of factors likely has contributed to the decrease in SAWs' share of agricultural employment. While the share of IRCA-legalized farm workers has been falling over time due to aging and the availability of nonfarm jobs, the leading factor probably is the substantially increased presence of illegal aliens. In the first half of the 1990s, unauthorized workers rose from 7% to 37% of the SAS labor force. Their share climbed to 55% by FY1999-FY2000, before settling at 53% in FY2005-FY2006. Moreover, the number of SAS workdays performed by unauthorized aliens more than tripled between FY1989 and FY2002. In addition, of the many foreign-born newcomers to the sector in FY2000-FY2002, 99% were employed without authorization.

Unauthorized aliens, arguably, have been displacing legal workers from jobs in the agricultural industry. Farm worker advocates assert that crop producers prefer unauthorized employees because they have less bargaining power with regard to wages and working conditions than other employees. Growers counter that they would rather not employ unauthorized workers because doing so puts them at risk of incurring penalties. They argue that the considerable presence of unauthorized aliens in the U.S. farm labor force implies a shortage of legal workers.

Farm worker groups and some policy analysts contend that even if the previously mentioned DHS and SSA activities were to deprive farmers of many of their unauthorized workers, the industry could adjust to a smaller supply of legal workers by (1) introducing labor-efficient technologies and management practices, and (2) raising wages which, in turn, would entice more authorized workers into the farm labor force. Grower advocates respond that further mechanization would be difficult to develop for many crops and that, even at higher wages, not many U.S. workers would want to perform physically demanding, seasonal farm labor under variable climactic conditions. Moreover, employer representatives and some policy analysts maintain that growers cannot raise wages substantially without making the U.S. industry uncompetitive in world markets which, in turn, would reduce farm employment. In response, farm worker supporters note that wages are a small part of the price consumers pay for fresh fruits and vegetables and accordingly, higher wages would result in only a slight rise in retail prices. These remain untested arguments as perishable crop growers have rarely, if ever, had to operate without unauthorized aliens in their workforces.

A Farm Labor Shortage?

Trends in the farm labor market generally do not suggest the existence of a nationwide shortage of domestically available farm workers, in part because the government's statistical series cover authorized and unauthorized workers. This overall finding does not preclude the possibility of spot shortages of farm labor in certain areas of the country at various times of the year.

Caution should be exercised when reviewing the statistics on farm workers' employment, unemployment, time worked and wages that follow. The surveys from which the data are derived cover somewhat different groups within the farm labor force (e.g., all hired farm workers as opposed to those engaged only in crop production or workers employed directly by growers as opposed to those supplied to growers by farm labor contractors), and they have different sample sizes. A household survey such as the Current Population Survey (CPS) could well understate the presence of farm workers because they are more likely to live in less traditional quarters (e.g., labor camps) and of unauthorized workers generally because they may be reluctant to respond to government enumerators. And, some of the surveys have individuals as respondents (e.g., the CPS and DOL's National Agricultural Workers Survey) while others have employers as respondents (e.g., the U.S. Department of Agriculture's National Agricultural Statistics Service Farm Labor Survey, FLS). Surveys that query employers are more likely to pickup unauthorized employment than are surveys that query individuals.

Underlying Assumptions

Estimating whether the number of workers in the United States is sufficient to fulfill employer demand is difficult because there is no agreed-upon definition of a labor shortage. Economists believe labor markets reach a balance between supply and demand, with a lag, absent government policies that prevent a shortage or surplus from occurring. For example, economic theory posits that firms needing more workers to fill jobs in a particular occupation will initially raise wages to attract employees from elsewhere in the economy and thereby restore equilibrium between supply and demand in the occupation. In contrast, businesses tend to think there is a shortage in a given occupation if as many workers as they want cannot be obtained at the current wage being offered.

Estimating shortages or surpluses also is not straight-forward because the supply of and demand for labor generally cannot be measured directly. There is no proxy for the supply of workers to most occupations. An oft-used measure of demand is employment. Accordingly,

an increase in an occupation's employment denotes that employers have increased their demand for labor and may be moving toward—but have not reached—a shortfall of workers, while a decrease in an occupation's employment signals that employers either have (1) reduced their demand for labor and may be moving away from a shortage, or (2) maintained or increased their demand but may have exhausted the supply of readily available workers.

The trend in wages commonly is used to clarify the latter situation: if employment in an occupation falls despite employers substantially bidding up wages, it is assumed that the number of workers readily available to fill jobs in the occupation may have reached its limit.

Other measures that can be examined to shed additional light on the relationship between labor supply and demand include unemployment and time worked. Both these indicators are analyzed below to supplement trends in farm employment and wages.

Employment

Although the employment of hired workers engaged in crop or livestock production (including contract workers) has fluctuated erratically over time, the trend overall has been downward (see columns 3 and 7 in Table 1 ). The employment pattern among crop workers hired directly by growers (i.e., excluding those supplied by farm labor contractors and crew leaders) regularly rose and then fell back during the 1990s, but to a higher level through 2000 (column 4). This ratcheting upward of employment produced a 12% gain over the 1990-2000 period. In contrast, other wage and salary workers experienced steady and robust job growth over almost the entire period: from 1990 to 2000, wage and salary employment in nonfarm industries advanced by 18%. These divergent employment patterns suggest that hired farm workers did not share equally in the nation's long economic expansion of the 1990s and appear to be inconsistent with the presence of a nationwide farm labor shortage at that time.

Nonfarm wage and salary employment showed signs of revival from the 2001 recession in 2003. It continued to rise until the decade's second recession began in December 2007. In contrast, the various measures of farm worker employment fluctuated erratically between the two recessions and generally ended the period down from their initial level. The disparate patterns again suggest that hired farm workers did not share equally in the nation's latest economic expansion and appear to be inconsistent with the existence of a nationwide farm labor shortage. (See columns 3 and 7 of Table 1 . )

Farm employment is subject to considerable seasonal variation, which annual average data masks, however. Demand for crop workers in particular typically peaks in July when many fruits and vegetables are ready to be harvested. Farm employment also varies greatly by geographic area. July data for the past few years disaggregated by geographic area available from the FLS are examined below to assess whether demand at its peak has produced shortages of hired farm workers and agricultural service workers in some parts of the country. Because the FLS provides data for both worker groups only in California and Florida, the data in Table 2 is limited to those states. Recall that the data on hired farm workers are for a broader group than crop workers, covering livestock as well as field workers.

Employment of hired farm (field and livestock) workers and agricultural service workers rose in California between July 2006 and July 2007, and again between July 2008 and July 2009. (See Table 2 .) While the rate of increase in total farm employment was below the national average during the latest peak period, the rate of increase was above the national average during the earlier period. The substantial growth rate suggests that California growers faced a tighter labor market in July 2007. In contrast, total farm employment between the two periods fell considerably. As previously noted, a decrease in employment such as occurred in California in July 2008 could indicate that the state's farmers had either reduced their demand for workers or had maintained or increased their demand but were unable to find sufficient workers to meet it.

Variable climate conditions may explain a good deal of the long-standing yearly fluctuations in farm employment not only in California but also in other states. For example, drought or hurricanes could severely curtail crop production in a given area in one year, which would greatly reduce labor requirements; the following year the same area could have more normal weather conditions that would produce a larger crop and, hence, a greater demand for labor. In the case of California in July 2008, "lack of available irrigation water caused much acreage to be left fallow. Planted acreage of cotton, dry beans, and sugar beets declined sharply from 2007. Therefore, the demand for field workers was considerably lower."

Another example involves Washington state. Different weather conditions in 2006 than 2005 affected when demand peaked for harvesting cherries, which in turn affected the supply of labor to other growers in the state. As a result of the delayed surge in demand for labor among cherry producers in 2006, many workers who usually would have switched to working for apple growers in August instead continued to harvest cherries. Their analysis led Ernst W. Stromsdorfer and John H. Wines to conclude that "dramatic year-to-year seasonal changes explain much of the concern of agricultural producers over the adequacy and timeliness of the supply of seasonal agricultural workers.

Unemployment

Employment data paint an incomplete picture of the state of the labor market. At the same time that employment in a given occupation is decreasing or increasing relatively slowly, unemployment in the occupation might be falling. Employers would then be faced with a shrinking supply of untapped labor from which to draw. A falling unemployment rate or level would offer some basis for this possibility.

As shown in Table 3 , the unemployment rate of hired farm workers engaged in crop or livestock production (including contract labor) is quite high. Even the economic boom that characterized most of the 1990s did not reduce the group's unemployment rate below double-digit levels, or about twice the average unemployment rate in the nation at a minimum. Discouragement over their employment prospects in agriculture or better opportunities elsewhere (e.g., the housing construction industry) may have prompted some unemployed farm workers to leave the sector as evidenced by their reduced number over the years (see column 4 of the table).

Others have examined the unemployment rates in counties that are heavily dependent on the crop farming industry. The GAO, for example, found that many of these agricultural areas chronically experienced double-digit unemployment rates that were well above those reported for much of the rest of the United States. Even when looking at monthly unemployment rates for these areas in order to take into account the seasonality of farm work, the agency found that the agricultural counties exhibited comparatively high rates of joblessness. These kinds of findings imply a surplus rather than a shortage of farm workers.

Another perspective on the availability of untapped farm labor comes from the DOL's National Agricultural Worker Survey (NAWS). During FY2001-FY2002, the typical crop worker spent two-thirds of the year performing farm jobs. The remainder of the year, these farm workers either were engaged in nonfarm work (10% of the year) or not working (16%) while in the United States, or they were out of the country (7%). This pattern also suggests an excess supply of labor, assuming that the workers wanted more farm employment. Alternatively, grower advocates contend that the pattern is a manifestation of working in a seasonal industry. Even in a month of peak industry demand, however, only a small majority of farm workers hold farm jobs.

Time Worked

Another indicator of supply-demand conditions is the amount of time worked (e.g., hours or days). If employers are faced with a labor shortage, they might be expected to increase the amount of time worked by their employees.

Hours Worked

Recent data reveal no discernible year-to-year variation in the average number of weekly hours that hired farm workers are employed in crop or livestock production. According to the FLS, the average workweek of hired farm workers has ranged narrowly around 40.0 hours since the mid-1990s. Thus, neither the annual trend in employment nor that in work hours implies the existence of a farm labor shortage.

There also is not much variability in demand over the course of a year based on hours worked. In 2008, for example, the average week of hired farm workers was 38.4 hours in mid-January, 40.8 hours in mid-April, 40.5 hours in mid-July and 41.3 hours in mid-October.

Days Worked

Another measure of time worked available from the FLS is "expected days of employment" (i.e., farm operators are asked the number of days they intend to utilize their hired farm workers over the course of a year). As shown in Table 4 , they anticipated a low of 557,000 farm workers on their payrolls for at least 150 days in 2008 and a high of 679,000 (un)authorized workers in 2002. These "year-round" workers typically have accounted for at least three-fourths of hired farm workers in the current decade.

Wages

As previously stated, economic theory suggests that if the demand for labor is nearing or has outstripped the supply of labor, firms will in the short-run bid up wages to compete for workers. Consequently, earnings in the short-supply field would be expected to increase more rapidly than earnings across all industries or occupations. The ratio of, in this instance, farm to nonfarm wages would accordingly be expected to rise if the farm labor supply were tight.

Based upon the data in Table 5 , the average hourly earnings of field (excluding contract) workers typically have increased to the same extent as those of other non-management employees in the private sector. As a result, field workers still earn little more than 50 cents for every dollar paid to other non-management employees in private sector industries.

An over-the-year comparison of farm and nonfarm wage data in the peak demand month of July suggests the presence of a tight labor market for California growers in 2007, but not in 2008 or 2009. As shown in Table 6 , California growers raised the hourly wages of field workers (7.6%) and agricultural service workers (5.4%) at rates well above those earned by nonfarm employees in other private sector industries (3.9%) between July 2006 and July 2007. These above-average wage increases likely contributed to the comparatively large increase in farm (field and livestock) employment in the state between July 2006 and July 2007, as previously shown in Table 2 . Between July 2007 and July 2008, however, California growers raised the wages of field workers to a lesser extent than other private sector employers increased their workers' wages (2.6% and 3.6%, respectively); in the case of agricultural service workers, hourly wages in the state were unchanged. The previously discussed reduced demand for farm labor in the state in July 2008, which was related in part to crop land being left fallow due to a lack of water for irrigation, is a likely explanation for the comparatively small wage increase. Between July 2008 and July 2009, California growers raised the wages of field workers about as much as they had between July 2007 and July 2008, and to a slightly lower extent than other private sector employers increased their workers' wages ( 2.5% and 2.7%, respectively); as for agricultural service workers, they experienced an increase compared to the lack of a raise in the prior year. Farmers in California may have found it easier to attract workers from other sectors of the economy because of ongoing deterioration in the construction industry, in particular, and the recession that began in December 2007, in general.

Conclusion

In summary, indicators of supply-demand conditions generally are inconsistent with the existence of a nationwide shortage of domestically available farm workers in part because the measures include both authorized and unauthorized employment. This finding does not preclude the possibility of farm worker shortages in certain parts of the country at various times during the year. The analysis does not address the adequacy of authorized workers in the seasonal farm labor supply relative to grower demand.

Whether there would be an adequate supply of authorized U.S. farm workers if new technologies were developed or different labor-management practices were implemented continues to be an unanswered question. Whether more U.S. workers would be willing to become farm workers if wages were raised and whether the size of the wage increase would make the industry uncompetitive in the world marketplace also remain open issues. These matters remain unresolved because perishable crop growers have rarely, if ever, had to operate without unauthorized aliens being present in the domestic farm workforce.