The farmworker wage gap: Farmworkers earned 40% less than comparable nonagricultural workers in 2022
This is the second blog post in a series on farmworker employment and wages.
The public discourse around farmworkers’ wages has recently reached a fever pitch, with farm employers and industry associations arguing that wages have risen too quickly and are out of control. As a response, farm employers and industry associations have lobbied Congress to reduce the required wage rates for migrant farmworkers in the H-2A visa program—known as the Adverse Effect Wage Rate (AEWR)—and even sued the U.S. Department of Labor (DOL) to invalidate a new methodology for setting AEWRs.
But even a cursory review of the basic wage data on farmworkers and the H-2A program reveals that claims about farmworkers being overpaid are not based on any observable evidence, and in fact farmworkers are paid much less than similarly situated workers outside of agriculture. That is not to say that farmworkers’ wages have not increased over the past decade—they have risen in real terms—but farmworker wage growth must be viewed in the context of wage growth for other workers and employer claims of a labor shortage in agriculture.
In light of these claims and recent lobbying efforts, this next blog post in this series will examine the available evidence on farmworkers’ wages and wage growth compared with workers outside of agriculture. In subsequent posts, I’ll review changes in the AEWR over the past 10 years, and analyze the wages of directly hired farmworkers versus those who are employed by farm labor contractors.
The impact of the wave of strike activity goes far beyond the 2024 election: A revitalized labor movement could lead to a fairer economy for decades to come
This op-ed was originally published in The Financial Times. Read it here.
Last week, both President Joe Biden and Donald Trump traveled to Michigan. Many in the media cast these visits as similar efforts to woo union voters for the 2024 election. But that is mostly wrong or misleading.
The visits were clearly not symmetric pro-union efforts. Biden walked a picket line in support of the United Auto Workers (UAW)—something no other president in history has done—and told them: “Folks, stick with it, because you deserve the significant raise you need.” Trump, on the other hand, accepted an invitation from the management of a non-union auto parts firm to appear at its factory. He then downplayed the UAW strike, telling his audience that the current negotiations “don’t mean as much as you think” while mostly ranting against electric vehicles.
The impact on next year’s election remains to be seen. But if working people vote based on who truly has their interests at heart—rather than who has repeatedly chosen to put corporate interests above those of workers—that will greatly favor Biden. If, instead, both candidates are portrayed as earnestly courting working-class voters, then the waters will be muddier.
But to assess the two visits to Michigan mainly in terms of their potential effect on the 2024 election is to think too small. The single most important trend in U.S. economic life in recent decades has been the rise of income inequality, which was overwhelmingly driven by anemic growth in wages for all but the very highest-paid workers.
In turn, perhaps the single largest driver of this rise in inequality has been the undermining of the power of organized labor and the subsequent decline of unionization and collective bargaining. If Biden’s walk on the picket line is one signal of a resuscitation of labor’s power, this could lead to a better economic life for low- and middle-income families for generations to come.
How many farmworkers are employed in the United States?
This is the first blog post in a series on farmworker employment and wages.
Basic facts about the employment of farmworkers, and the wages they earn, are often difficult to obtain and understand. Media coverage and even policymakers working on agricultural issues often mistake or confuse key data points. This is understandable, given that employment and wage data in agriculture must be pieced together from multiple data sets, which are often incomplete and inconsistent and provide information about different segments of the farm workforce.
This blog post is the first in a series that will attempt to address this information gap by providing some basic facts and information about farmworker employment and wages. I begin by addressing one of the most basic yet confusing questions about farmworkers: How many are employed in the United States?
Job Openings and Labor Turnover Survey: Hiring, quits, and layoffs remain at or below pre-pandemic rates
Below, EPI senior economist Elise Gould offers her initial insights on today’s release of the Job Openings and Labor Turnover Survey (JOLTS) for August. Read the full thread here.
Florida legislature proposes dangerous rollback of child labor protections: At least 16 states have introduced bills putting children at risk
Updated November 14, 2023
This post has been updated to reflect confirmation of the Foundation for Government Accountability’s role in drafting the proposal to roll back child labor protections in Florida. Previously, the post indicated the group’s support for similar bills in other states and the likelihood of their involvement in Florida.
Last week, Florida became at least the 16th state to introduce legislation rolling back child labor protections in the past two years, and the 13th state to introduce such legislation in 2023. Florida’s bill proposes eliminating all guidelines on hours employers can schedule youth ages 16 or 17 to work, allowing employers to schedule teens to work unlimited hours per day or per week—including overnight shifts on school days. The bill was drafted by the Foundation for Government Accountability (FGA)—a Florida-based right-wing dark money group that has lobbied for similar proposals in multiple states.
At a time when violations of child labor laws are on the rise nationally—and amid reports of serious violations in Florida—lawmakers must act to strengthen standards, not erode existing minimal standards designed to keep youth safe at work and guarantee all children equal access to education.
The expiration of pandemic-era public assistance measures fueled poverty increases in the majority of states (Corrected)
Poverty in the U.S. is a choice directly reflecting federal, state, and local policies. The expansion of safety net programs in response to the pandemic-driven recession reduced poverty rates nationally in 2021 to below pre-pandemic levels. However, because policymakers ended many of these programs—including expanded unemployment insurance, the expanded Child Tax Credit, and economic impact/stimulus payments—poverty rates rose from 7.8% in 2021 to 12.4% in 2022. Child poverty, which had fallen to record lows in 2021, increased from 5.2% to 12.4% in 2022.
In this post, we show poverty rates in each state. Data for the official poverty measure—the one most often quoted in media—are compared with the Supplemental Poverty Measure (SPM), which provides a more complete picture of the well-being of families in the states. When using the more comprehensive measure of poverty, we see that poverty rates increased in the majority of states after programs like the expanded Child Tax Credit were allowed to expire.
New data show that access to paid sick days remains vastly unequal: Amid federal inaction, 61% of low-wage workers are without paid sick days
The spike in child poverty highlighted in the latest Census release illustrated the consequences of allowing crucial government provisions to expire. Although less discussed, the Families First Coronavirus Response Act—a tax credit incentivizing employers to provide sick leave—was another important government provision that expired two years ago. Few policymakers seem intent on renewing it, though some have repeatedly proposed federal legislation that would make paid sick days a permanent benefit.
Absent federal action, new Bureau of Labor Statistics data released today reveal stark inequalities in access to paid sick leave. One that hits hard is the inability of 61% of the lowest-wage workers in the U.S. to be able to earn paid sick days to care for themselves or family members.
Figure A below breaks down access to paid sick days: Whereas 96% of the highest-wage workers (top 10%) had access to paid sick days, only 39% of the lowest-paid workers (bottom 10%) are able to earn paid sick days. That means the highest-wage workers are 2.5 times as likely to have access to paid sick leave as the lowest-paid workers.
Workers without paid sick leave often have to choose between going to work sick (or sending a child to school sick) or risk losing their job or forgoing a vital household expense. In a forthcoming EPI report, we will demonstrate that the costs of these expenses from not having paid sick leave can be high.
Despite a strong labor market, the choice to allow pandemic-era public assistance programs to expire increased poverty across all racial groups in 2022
The 2022 income and poverty report released last week by the Census Bureau offers an initial, authoritative insight into the economic well-being of U.S. households by race and ethnicity. This examination comes in the wake of a notable decrease in child poverty rates in 2021, primarily attributed to the expansion of safety net programs—like the Child Tax Credit (CTC)—that were an integral component of the COVID-19 economic recovery.
The report indicated that although real median household income fell 2.3% in 2022 for all households, there were notable differences across various racial and ethnic groups, as seen in Figure A. Specifically, Black households saw a modest 1.5% increase in real median household income, going from $52,080 to $52,860. Likewise, Hispanic households experienced a slight 0.5% uptick, with median income rising from $62,520 to $62,800. Asian households experienced a 0.6% dip in median household income, from $109,400 to $108,700. In contrast, white, non-Hispanic households experienced a more pronounced 3.6% decline in median household income, from $84,110 to $81,060.
Notably, one of the key factors explaining why Black household median income was seemingly less affected than that of white households is the increased employment of Black workers in the labor market, which managed to counteract the negative impact of inflation on income. In 2022, the number of Black full-time, year-round earners increased by 1.3 million—or 9%— compared with an increase of 450,000 white earners—or 0.6%.
How an Activision Blizzard and Microsoft merger helps consumers and workers
Microsoft’s proposed acquisition of Activision Blizzard could well close in the next month because the regulatory process is ending. In this case, the European Commission has shown even more creativity than the newly-energized U.S. Federal Trade Commission (FTC), approving the transaction in May with some structural consumer protection provisions that are likely to be amplified by the United Kingdom’s Competition and Markets Authority. (Fun fact, an economics dissertation in 2012 argued the merger made sense.)
European Union (EU) and UK authorities basically require the proposed merged company to ensure equal access for consumers and improve consumers’ experience. According to these two European regulators, the merger is allowed only if Microsoft helps consumers. To satisfy the UK, Microsoft is divesting the cloud licensing business of Activision Blizzard to Ubisoft. This apparently addresses the antitrust agency’s demands that consumers get more choice and better outcomes under the merger.
The FTC should act now to be part of the global merger settlement that protects consumer, community, and worker interests.
But, I worry. My concern is that the FTC (and progressive pro-consumer and antitrust economists) will stick to old-fashioned frameworks that assume enforcing smallness equates to enhancing competition. A “break ‘em up no matter what” stance would miss the opportunity to get the best of what well-regulated large firms have to offer. Also, the “small is always beautiful” approach to antitrust defies modern labor and industrial economics research. This modern research highlights that real-world markets—even those with many players operating in a given market—allow for significant exercise of market power, particularly employers’ power over wage-setting for employees.
UAW-automakers negotiations pit falling wages against skyrocketing CEO pay: U.S. auto companies have the means to invest in EVs, pay workers a fair share, and still earn healthy profits
Key takeaways:
- Profits at the “Big 3” auto companies—Ford, General Motors, and Stellantis— skyrocketed 92% from 2013 to 2022, totaling $250 billion. Forecasts for 2023 expect more than $32 billion in additional profits.
- CEO pay at the Big 3 companies has jumped by 40% during the same period and the companies paid out nearly $66 billion in shareholder dividend payments and stock buybacks.
- Autoworker concessions made following the 2008 auto industry crisis were never reinstated, including a suspension of cost-of-living adjustments. As a result, workers’ wages in the union and nonunion sector alike are falling farther behind inflation: Across the U.S., auto manufacturing workers have seen their average real hourly earnings fall 19.3% since 2008.
- Broadly sharing profits with workers will be even more critical as the industry focuses on becoming greener—both in what and how they produce cars and trucks. The Big 3 firms are set to receive record taxpayer-funded incentives to support their expansion into electric vehicle (EV) manufacturing. EV transition policies and the economic and climate potential they promise will not be sustained if auto workers and auto communities are again asked to sacrifice good jobs.
United Auto Workers (UAW) members at the “Big 3” companies—Ford, General Motors (GM), and Stellantis—are poised to strike this week when their contracts expire September 14. It’s a historic and economically momentous time for this foundational industry in America’s industrial-technological base, and the outcome of the negotiations has potentially profound implications for how successfully we tackle the climate crisis.
The deep roots of the UAW’s current dissatisfaction share much with those taking labor actions to fight back after decades of rising inequality: The pay of typical workers has lagged far behind more-privileged actors in our economy, and the reason for this growing inequality is an erosion of workers’ leverage and bargaining power in labor markets. After surveying here the recent trends in auto industry wages, corporate profits, and executive compensation, it’s hard to blame workers for standing up now. It’s also clear that the companies have more than enough means to meet worker demands, remain profitable, and make the necessary investments to grow into electric vehicles. In fact, the “Big 3” companies can ill-afford not to recruit and retain talented workers in a rapidly transforming industry.
In the 2008 auto industry crisis, GM and Chrysler (now Stellantis) agreed to bankruptcy and government-supported restructuring. While this deal saved jobs throughout the auto sector, it came with steep costs to workers. Union workers agreed to a wage freeze, entry of lower-wage “tiered” workers, and other concessions affecting retiree pensions and health care benefits.1 In 2009, the companies suspended contractual cost of living adjustments and have not had one since. Since that time, average consumer prices have increased nearly 40% and autoworker wages have not come anywhere close to keeping up.
As unionized auto wages fell behind, so did non-unionized auto wages. This spillover effect whereby wage suppression of union workers filters out into the broader economy and damages the wages of non-union workers as well is a key dynamic driving U.S. inequality in recent years. Bureau of Labor Statistics data in Figure A show that production and non-supervisory workers across the broader motor vehicle industry, union and non-union, have taken it on the chin since the 2009 deal. Those working in motor vehicle manufacturing saw their average hourly earnings fall a staggering 19.3% since 2008, after adjusting for inflation. Including the broader motor vehicle parts industries—where outsourcing strategies have long compressed industry wage structures and thus didn’t have as far to fall—average earnings fell 10% in real terms.