Trump administration looking to cut the already low wages of H-2A migrant farmworkers while giving their bosses a multibillion-dollar bailout
- The Trump administration, which recently deemed farmworkers essential to the economy, is considering lowering the wages of the 205,000 migrant farmworkers employed in the United States through the H-2A temporary work visa program, according to published reports.
- H-2A wages are usually based on a mandated wage standard that varies by region—known as the Adverse Effect Wage Rate (AEWR)—aiming to prevent temporary migrant farmworkers from being underpaid according to local standards and to prevent downward pressure on the wages of farmworkers in the United States.
- Farmworkers in general are paid very low wages—in 2019 they earned $13.99 per hour, which is only three-fifths of what production and nonsupervisory workers outside of agriculture earned, and they earned less than what workers with lowest levels of education in the U.S. labor market earned.
- The national average AEWR wage, at $12.96 per hour, was lower than wages for any of these groups of workers, and many H-2A farmworkers earned far less in some of the biggest H-2A states.
- The Trump administration may try to lower the wages of H-2A farmworkers through the regulatory process or a provision attached to a broader piece of legislation.
- This comes at a time when farm owners looking to cut their workers’ wages are on the verge of receiving a federal bailout worth at least $16 billion, which will help cover potential financial losses related to impact of the coronavirus pandemic.
Last week, NPR reported that “new White House Chief of Staff Mark Meadows is working with Agriculture Secretary Sonny Perdue to see how to reduce wage rates for foreign guest workers on American farms.” Apparently, the Trump administration believes that temporary migrant farmworkers—who earned between $11.01 and $15.03 per hour in 2019—are overpaid.
Why should migrant farmworkers have to take a pay cut, especially right now, when farmers and ranchers are about to receive at least $16 billion in direct payments thanks to a federal bailout?
The “foreign guest workers” mentioned in the NPR report are migrant workers employed with H-2A visas, through a temporary work visa program used by employers to fill seasonal and temporary agricultural jobs. There were about 205,000 H-2A workers employed in 2019, for an average of six months each, accounting for about 10% of full-time-equivalent farmworker jobs. The minimum wage employers are required to pay H-2A workers is in most cases set by the Adverse Effect Wage Rate (AEWR), which varies by region.
The AEWR is not a magical scheme to artificially lift wages for migrant farmworkers, as Secretary Perdue seems to want people to believe. Instead, it’s based on the average wage paid to all nonsupervisory field and livestock workers as determined by a U.S. Department of Agriculture (USDA) survey of employers. (The survey includes H-2A and unauthorized immigrant farmworkers and only excludes farmworkers hired by farm labor contractors.)
The AEWR exists for two main reasons:
- To prevent farmworkers who are recruited from abroad from being underpaid relative to other farmworkers in the region where they’re employed.
- To prevent downward pressure on the wages of farmworkers in the United States, one-quarter of whom are U.S.-born citizens, along with another quarter who are naturalized citizens or lawful permanent residents. Lowering the AEWR will put downward pressure on the wages of all farmworkers.
Reports about cutting pay for H-2A farmworkers are even more perplexing given that the Trump administration has declared them a “national security priority.”
Although the U.S. State Department has stopped processing most temporary visas during the coronavirus pandemic and national emergency, it recently announced that H-2A visas are “essential to the economy and food security of the United States and [are] a national security priority.” As a result, State will keep processing H-2A visas and has begun waiving the in-person interviews that are usually required for applicants, in order to promote social distancing.
The State Department’s waiver of interviews and the Trump administration’s additional determination that farmworkers are part of America’s “Essential Critical Infrastructure Workforce” suggest that farmworkers are doing an important job—arguably so important that they deserve an increase in pay at a time like this when their job puts their health at risk, i.e., they should receive an “essential worker bonus” (or what’s often referred to as “hazard pay”) and certainly not a pay cut.
Let’s put that aside for a moment and consider the evidence: Are H-2A farmworkers overpaid?
Looking first at what all farmworkers earn (not just H-2A workers), the available data show that—despite some real increases in wages the past few years for farmworkers—their wages are still extremely low by any measure, even when compared with similarly situated nonfarm workers and workers with the lowest levels of education (see Figure A).
In 2019, the average wage of all nonsupervisory farmworkers was $13.99 per hour, according to USDA, while the average wage for all workers in 2019 was $26.53 per hour, meaning the farmworker wage was just 53% of the average for all workers. And the average wage for production and nonsupervisory nonfarm workers—the most logical cohort for workers outside of agriculture to compare with farmworkers—was $23.51.
In other words, farmworkers earned 60%—just three-fifths—of what production and nonsupervisory workers outside of agriculture earned. In 2018, USDA referred to this gap between farmworker and nonfarm worker wages as “slowly shrinking, but still substantial.” The farmworker wage gap remained substantial in 2019.
Farmworkers and H-2A guestworkers earn very low wages compared with other workers: Average hourly wage rate for H-2A guestworkers and average hourly wages of farmworkers compared with average hourly wages of other workers, 2019
|Workers with less than HS||$14.08|
|Workers with HS diploma only||$18.91|
All values are for 2019 and in 2019 dollars. HS = high school. H-2A wage is the national average Adverse Effect Wage Rate for 2019, as reported by the U.S. Department of Labor, and does not reflect the average wage paid to the H-2A workers who were ultimately employed in 2019. Nonsupervisory nonfarm workers’ wage represents the average hourly earnings of production and nonsupervisory employees, total for the private sector, not seasonally adjusted. Nonsupervisory farmworkers’ wage is the gross average hourly wage of field and livestock workers. Data for all workers, and for workers with a high school diploma and less than high school, can be found at the Economic Policy Institute State of Working America Data Library.
Sources: Author’s analysis of USDA Farm Labor Survey data and nonfarm wage data from the BLS Current Employment Statistics survey; EPI analysis of CPI-ORG microdata; Office of Foreign Labor Certification historical state AEWRs
Author’s analysis of USDA, Economic Research Service using data from National Agricultural Statistics Service, Farm Labor Survey, and nonfarm wage data are from Bureau of Labor Statistics, Current Employment Statistics survey; EPI analysis of Current Population Survey Outgoing Rotation Group microdata (Economic Policy Institute, State of Working America Data Library); Office of Foreign Labor Certification, “Historical State AEWRs: Adverse Effect Wage Rate by State from 2014 to Present,” U.S. Department of Labor
Farmworkers have very low levels of educational attainment. According to the National Agricultural Workers Survey, 30% completed the 10th, 11th, or 12th grade, and 10% completed some education beyond high school. So how do the wages of farmworkers fare with respect to the two groups of workers with the lowest levels of education in the United States—those with only a high school diploma (and no additional schooling) or those with less than a high school diploma? Farmworkers earned slightly less than the average wage earned by workers without a high school diploma, who earned $14.08 per hour, and earned nearly $5 less per hour than the average wage earned by workers with only a high school diploma ($18.91).
The nationwide average hourly AEWR wage for H-2A workers was even lower than the wage for all nonsupervisory farmworkers in 2019—meaning the gap between what many H-2A farmworkers and workers outside of agriculture earn is even wider.
Although the AEWR varies by region, the U.S. Department of Labor (DOL) reported that the nationwide average hourly AEWR in 2019 was $12.96 per hour. While the AEWR was higher in some states—the highest being in six states where the AEWR was between $14.38 and $15.03 in 2019—nevertheless it was lower than the average in many states, including some of the biggest H-2A states. For example, Georgia and South Carolina accounted for 14% of all H-2A jobs in 2019; those two states, along with Alabama, had the lowest overall AEWR, at $11.01 per hour. The AEWR in Florida—the biggest H-2A state, where 13% of all H-2A jobs were located in 2019—was only a few cents more, at $11.24 per hour. In other words, many H-2A workers are earning wages that are even lower than the H-2A national average wage—wage rates that are at or near poverty levels—not exorbitant salaries as Secretary Perdue wants people to believe.
So how would the Trump administration go about lowering the AEWR for H-2A workers?
The NPR report notes that so far it’s “unclear” but that it could take place “through executive action or through the federal regulatory process.”
In late July 2019 the Trump administration proposed and took comments on a new federal regulation that would result in a lower AEWR for many H-2A workers, which dozens of farmworker and immigrant advocate groups opposed. The regulation is still under consideration and the final version has not been published; one route the Trump administration could attempt would be to publish the final rule with last-minute changes that lower wages for H-2A workers even further than originally proposed. There’s a high likelihood that this tactic would be unlawful, but that doesn’t mean the administration won’t try it.
The Trump administration could also issue a new emergency regulation lowering the AEWR or ask Congress to include a provision to lower the AEWR in a possible fourth coronavirus relief bill. While it’s likely that all Republicans would be in favor of such a provision, it’s possible that some Democrats from farm states and even those in leadership might support this, too, given their usual posture of supporting the agricultural industry’s priorities on H-2A.
The data show clearly that H-2A workers are paid some of the lowest wage rates in the U.S. labor market. In fact, there’s zero evidence to justify Ag Secretary Sonny Perdue’s myth of the overpaid H-2A migrant farmworker.
The only rational explanation for lowering the wages of H-2A farmworkers right now is corporate greed and unquestioning subservience to agribusiness on the part of the Trump administration. While H-2A farmworkers are labeled essential and expected to keep on working, requiring them to earn even less than they already do, so that farm owners won’t have to suffer slightly slimmer profit margins for a few months, is nonsensical on its face.