Agricultural inputs play a significant role in farming practices to produce the desired output for the economy. Farm labor is one of the most important inputs and crucial for performing various farming activities. For a few years now, the U.S. agricultural workforce has witnessed a widespread farmworker shortage for many reasons.
According to the USDA National Agricultural Statistics Service, the farm labor survey reported a decline of 73% in self-employed family workers from 1950 to 2000, and a decline of 52% in hired workers within the same period in 2018. The agricultural industry also experienced a 7% decline in hired workers and a 5% increase in labor wages as a labor shortage triggered higher wages.
The decline in the agricultural workforce is due to several reasons. Given below are a few of them:
- Wage requirements of the workforce.
- Less interest in agriculture among younger generations.
- Increase in education and availability of career opportunities.
- Immigration policies limit the available workforce pool.
Let us now look at these reasons in more detail.
Wage Requirements of the Workforce: According to data collected from the FLS, real (inflation-adjusted) wages for nonsupervisory crop and livestock workers (excluding contract labor) rose at an average annual rate of 1.1% per year between 1990 and 2020. Real farm wages grew at 2.9% per year in the last 5 years, as workers became harder to find. While farm wages are rising in nominal and real terms, the impact of these rising costs on farmers' incomes is compensated by rising productivity and/or output prices. As a result, labor costs as a share of gross cash income, do not show an upward trend for the industry over the past 20 years. For all farms, labor costs (including contract labor, and cash fringe benefit costs) averaged 10.4% of gross cash income during 2017-19, compared to 10.7% during 1996-98.
Less Interest in Agriculture Among the Younger Generation: Lack of credit and negative perceptions around farming are the leading reasons for the youth leaving farming. Their perceptions in terms of agricultural-related activities are mostly portrayed as difficult and assumed to be meant for the aging rural population, non-prestigious, unsafe, and non-profitable sector. Whereas young people can contribute to farming through innovative ideas, skillful decision-making, and adopting creative new techniques. There is a need to change the perception of youth towards farming by ensuring them more income from farming than other jobs, introducing it as a subject or stream for the academic students to attract youth workers.
Increase in Education and Availability of Career Opportunities: Increasing literacy and career opportunities lead to a decline in the farm labor workforce as a graduate or degree holder does not prefer to make a career in the agriculture sector due to many corporate jobs available offering higher pay with work-from-home options. Young workers prefer a white-collar job instead of farm labor and those who had basic education prefer to work clerical jobs. There is a fixed income in jobs such as cleaners, hostel guards, cooks, superintendents, and so on. These jobs also tend to be less difficult. Moreover, if not these, then there are construction jobs that pay more than agricultural jobs. Hence, it is getting more difficult to find farm labor. Although many farmers are very wealthy and Farm operator households have more wealth than the average U.S. household because significant capital assets, like farmland and equipment, are generally necessary to operate a successful farm business. In 2020, the average U.S. farm household had $1,714,559 in wealth.
Immigration Policies that Limit the Available Workforce Pool: Immigration policies are also a key factor to reduce the number of workers available for the agricultural industry. Immigrants make up larger shares of the farms’ total workforce but after the establishment of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, immigrants who are unlawfully present in the U.S. for 180 days but under the 365 days must remain outside the United States for three years until stated otherwise by law. This act was designed to improve border control and restrict criminals from smuggling fraudulent immigration-related documents into the United States of America. Almost half of the farm laborers were undocumented immigrants who have now been restricted from working under this law. This resulted in a labor shortage.
H-2A Visa Program
Congress created the H‑2A program in 1986 to allow legal foreign workers to temporarily work for U.S. farmers who were unable to hire qualified Americans for a period of up to 10 months. During 2010-2019, there was an increase from about 79,000 to 258,000 H-2A workers. Currently, around 10% of workers in the United States are employed with H-2A visas. Through the Immigration and Nationality Act, and accompanying rulemaking by the US. Department of Labor, H-2A workers are guaranteed certain rights and protections.
There are numerous benefits provided to the workforce which are given below:
- Employers are required by the U.S. Department of Labor to give every H-2A worker a copy of the work contract. This copy must be in a language that the employee can understand. The contract comprises the start and end date of the job, hours to be worked, type of work to be performed, rates of pay, and frequency of pay. The contract binds both parties to perform the duties lawfully.
- H-2A worker is paid on a piece-rate basis, based on the units of production rather than hourly. Employers must also pay a State-specific minimum wage, which may not be lower than the average wage for crop and livestock workers surveyed in the FLS in that region in the prior year, known as the Adverse Effect Wage Rates (AEWR). From 2015 to 2020, the number of H-2A applications filed by employers increased by 87 percent.
- Employers of H-2A workers are required to provide transportation from the beginning to the end of the employment period from the residency of the labor to the farm site.
- Employers of H-2A workers are required to provide housing facilities or reimbursement of living with all the required facilities such as water and electricity supply. These terms must also be mentioned in the contract.
- H-2A workers are also assured of a guarantee of being provided with at least 360 hours of work. If employers fail to provide three- fourth a guarantee, he is still liable to pay the workers the amount they will get by doing 360 hours of work in 12 weeks, whereas a normal workweek is five days, at 8 hours per day.
There are many rights available to H-2A workers which are in the best of their interest and helpful for employers in managing the shortage of workforce. However, it should also be noted that H-2A workers are quite expensive and require a lot of paperwork.
By Prashansha Yadav