Agriculture has long been the poster child for an industry dependent on low-wage migrant workers. Today, about two-thirds of the hired workers employed on crop farms were born in Mexico, and most of these Mexican-born workers are not authorized to be employed in the United States. The total number of unauthorized migrants has fallen, while the number of unauthorized migrants who are employed in the U.S. labor market has been stable at about eight million, and the share of Mexican-born farm workers has also been stable. The lack of unauthorized newcomers makes agriculture a bellwether of how industries that rely on newcomers from abroad are adjusting to the slowdown in unauthorized migration. In agriculture, employers are responding in a number of ways. One of their main strategies has been to increase the use of the H-2A guestworker program to hire farm workers from abroad for seasonal jobs; this poses key challenges that have yet to be fully explored.

How farmers are adjusting to fewer new unauthorized migrant workers: 4-S strategies

Farmers are adjusting to the lack of new unauthorized migrant workers and higher labor costs with some or all of what are called “4-S” strategies: satisfy, stretch, substitute, and supplement. First, by satisfying current workers with new incentives, employers may be able to retain them longer. The second strategy is to stretch the current workforce with mechanical aids that increase worker productivity, which can include using conveyor belts that reduce the need to carry harvested produce as far, making them more productive and harvesting jobs more appealing to older workers and women. The third strategy is substitution or replacing workers with machines. Five of the most important field crops covered by government support programs—corn, soybeans, wheat, cotton, and rice—have largely been mechanized. Fresh fruits and vegetables, on the other hand, have defied mechanization because many are fragile and require gentler human hands, and machines that shake apples or pears from trees damage a higher share of the fruit than hand harvesters.

The fourth farmer adjustment is to supplement the current workforce with temporary migrant workers through the H-2A guestworker program. There is no annual numerical limit on the number of H-2A visas, but farm employers must obtain certification from the U.S. Department of Labor (DOL) of their need for guestworkers by satisfying three major criteria. First, farmers must attempt to recruit U.S. workers, hire those who are qualified, and explain why other applicants were not hired. Second, farmers must provide free housing to H-2A guestworkers and U.S. workers from outside the area. Third, farmers must pay U.S. and H-2A workers the adverse effect wage rate (AEWR), a wage that is higher than the federal minimum wage and which is based on the average hourly earnings of hired workers reported by farmers to U.S. Department of Agriculture (USDA). The AWERs in 2017 ranged from $10.38 to $13.79 an hour across states.

H-2A expansion and policy challenges

The H-2A program is expanding rapidly, more than doubling over the past decade to 165,700 farm jobs certified by DOL in fiscal 2016 (see Figure A); over 200,000 jobs are likely to be certified in fiscal 2017. Washington and California have seen the fastest-growth, with the H-2A program doubling in size over the past five years in those two states. The new entrants to the farm workforce are now primarily workers from Mexico with H-2A visas.

The expanding H-2A program poses several policy challenges from a policymaking perspective, and stakeholders on all sides complain about it. Farm employers have long wanted to employ H-2A workers in year-round jobs on dairies and poultry farms. The House Appropriations Committee in July 2017 included a provision to remove the requirement that H-2A jobs be seasonal in proposed legislation to fund the government, and the Paperwork Reduction for Farmers Act with a similar provision was recently introduced in the Senate.

Farmers criticize how the H-2A program is administered, decrying what they call slow and inconsistent decision-making by DOL, the U.S. Department of Homeland Security, and the U.S. Department of State. Farmers want USDA—a federal agency that has no expertise in labor standards enforcement—to become the lead agency to regulate foreign workers in agriculture. Farmers also seek an end to the requirements to first recruit U.S. workers and provide housing for workers, and a reduction in the AEWR.

Worker rights groups are alarmed by these proposals. Some sue on behalf of U.S. workers who are denied jobs or discriminated against because farmers prefer guestworkers, and some sue on behalf of H-2A workers whose contracts are violated or are otherwise exploited. This litigation helps individual workers, but doesn’t provide much insight into larger trends that will influence future job quality for migrants and native-born workers in the fields, or whether mechanization will decrease the need for human farm workers altogether.

The need to better understand H-2A

As H-2A expands, we need to know more. Three examples highlight a research agenda that could lead to better understanding of the H-2A program.  First, who are the employers of guestworkers, and how does the type of employer affect U.S. and H-2A workers? There are at least three models. First is direct hiring, as when the employer hires workers directly, houses them on his property, and pays them. Second are employer co-ops or associations that recruit workers, transport them to the United States, and move them from farm to farm as needed. Third are farm labor contractors (FLCs) who bring workers into the United States for one or more farm employer clients. In California and Florida, the FLC model is spreading fastest, while in North Carolina and Washington, employer associations dominate. What this will mean for the efficiency of matching workers and jobs and for worker protections is still an open question.

Second, farmers pay piece rate wages for most harvesting jobs; for example, $20 for each bin of apples and oranges picked. However, the minimum wage or AEWR is set by government, which creates a minimum productivity standard.  For example, if the minimum wage is $10 an hour, workers must pick at least four bins in an eight-hour day. If a worker picks only three bins, the employer must “make up” the worker’s $60 earnings to ensure that he or she receives the $80 minimum wage.

Workers unable to pick fast enough to earn the minimum wage at the employer-set piece rate are normally fired; employers do not have to retain low-productivity workers. This makes understanding productivity standards vital to determine whether U.S. farm work will become a job for the “best of the best” workers drawn from the workforces of developing countries. Jamaican H-2A workers in Florida cut an average 1.5 tons of cane an hour in the late 1980s, three times the half-ton average in Jamaica. Was this because the Jamaicans who came to the United States were faster workers than the average worker in Jamaica, or because they knew that being fired for being too slow would mean their removal from the United States? In other words, are the productivity standards being defined in the expanding H-2A program realistic, or does the legal framework of the H-2A program vastly increase productivity standards, discouraging U.S. workers?

Third, more H-2A guestworkers means more recruitment abroad by labor contractors and recruiters, which comes with the potential for excessive fees paid by workers to obtain temporary jobs. U.S. employers are legally obligated to pay all costs for the guestworkers they recruit, but surveys and government audits reveal that workers may pay 10 or 20 percent of what they expect to earn abroad to recruiters.

It is very hard to monitor worker-paid recruitment fees because workers get what they want, that is, a job in the United States at higher wages. However, many arrive in debt and are vulnerable to exploitation. Exploring incentives to encourage recruiters to protect workers and for workers to report abuses could help tilt an expanding guestworker system toward more protection.