By Frank Giles
Inflation has hit everyone’s pocketbook in recent years, but the agriculture sector has felt the squeeze more acutely than most. Increasing costs have impacted the H-2A visa program, which many specialty crop growers now rely on to source labor.
For the past few years, significant increases in the adverse effect wage rate (AEWR) have been imposed on growers using the H-2A program. The U.S. Department of Labor (DOL) administers the program and announced another round of increases for 2025.
The new wage rate became effective on Dec. 30, 2024. Alabama, Florida, Georgia and South Carolina saw a 10% increase in their AEWR over 2024. This continues a trend of significant increases in the wage rate each year.
Calculation Confusion
Those advocating for changes to H-2A have argued the program needs to be simplified and costs reduced. Another sticking point is how the AEWR is determined each year. The U.S. Department of Agriculture (USDA) National Agricultural Statistics Service (NASS) Farm Labor Survey (FLS) is partly utilized in setting the rate. The DOL uses the survey to help determine the AEWR.
In December, farm organizations sent a letter to U.S. Secretary of Agriculture Tom Vilsack regarding the wage rate. The letter was co-signed by 11 farm organizations including several that represent specialty crop agriculture. According to the letter, the use of the FLS is inconsistent with the intent of the survey and not well suited to establish the AEWR. The o-signers offer suggestions on how the survey could be improved to allow the DOL to determine an AEWR that is more reflective of minimum wages paid to U.S workers.
Letter to Secretary of Ag
The letter lays out reasons why the survey use is problematic: “The DOL uses the annual average hourly gross wage reported in the FLS for Field and Livestock Workers Combined as the AEWR for six different occupations, including farmworkers, graders and sorters and agricultural equipment operators. The FLS uses all wages paid to farmworkers — including the AEWR-based wages paid to H-2A workers and those in corresponding employment — to determine this average gross wage, and includes bonuses, incentive pay and overtime. This creates a self-inflating minimum wage (the AEWR) based on the prior year’s gross wage, resulting in volatile wage spikes.
“Indeed, this volatility was present in NASS’ November 2024 Farm Labor report which has been used by the DOL to establish next year’s AEWRs. Some regions of the country will see a nearly 10% increase in minimum H-2A wages. Such a spike could not have been foreseen and, for many farmers, comes at a time when budgets have already been set, making it even more difficult for the farmer to absorb that cost. This is an unsustainable burden for farmers to bear and threatens their ability to continue in labor-intensive agriculture.”
Suggested Solutions
The letter proposes ways to help remedy the problem. One suggestion is that the annual hourly base wage should be determined using the wage rate that workers are guaranteed to receive regardless of productivity and exclude any bonus, incentive and overtime pay.
The letter further notes: “USDA should also determine any degree to which the inclusion of wages paid to H-2A workers affects the average hourly base wage, considering regions where H-2A workers and those in corresponding employment make up a larger or smaller percentage of the agricultural workforce, recognizing that the statutory intent is to avoid adverse effect on domestic workers due to the employment of H-2A workers rather than adverse effect to the H-2A workers themselves. The larger sample size and improved survey design will ensure that NASS receives sufficient data to report the average hourly base wage.
“Should DOL continue to implement survey-based AEWRs, these FLS revisions may enable DOL to amend its current AEWR methodology to determine a wage that is both more reflective of domestic farm labor market conditions and protective of farmworkers. In the absence of fundamental reforms, these could be important incremental steps toward greater confidence in the current methodology.”
Florida Reacts
When USDA released its FLS results in November, states got a preview of their new AEWR would be in 2025. In Florida, the AEWR rate rose nearly 10% to $16.23 per hour. Leadership from the Florida Fruit & Vegetable Association, Florida Citrus Mutual, Florida Strawberry Growers Association, Florida Nursery, Growers and Landscape Association and Florida Cattlemen’s Association sent a letter to Florida’s congressional delegation outlining the impact these increasing wage rates are having on farms.
The self-inflating wage rates have pushed up the AEWR significantly in Florida. Since 2020, the AEWR has increased by nearly 40% and nearly 60% over the past decade. New wage rates are announced in the middle of Florida’s production season, leaving growers no other option but to absorb the additional costs.
The letter notes: “No other industry in the state is subject to such volatility, even with Florida’s steady minimum wage increases. Florida agriculture cannot continue to sustain these drastic cost increases without intervention. Given the design of the H-2A program, relief must come from Congress. The Florida agricultural industry respectfully calls on the Florida delegation to lead the initiative to finally pass needed agricultural labor reform and establish a wage mechanism that is stable for growers and fair for farm workers.”
Much to Work Out
As the new administration takes control of the White House, there’s a lot to work out when it comes to farm labor and immigration reform. This has never been an easy task. The last successful significant reform effort occurred in 1986.
Meanwhile, numerous court challenges are underway regarding the H-2A program that are working their way through the system. So, 2025 is poised to be a consequential time for specialty crop labor.