H 2A wage Hike
American Farm Bureau Federation economist, Veronica Nigh says the number of certified positions under the program is up 10 percent in the first quarter of this year compared to 2018. She says that's driving up the H-2A AEWR or adverse effect wage rate.
"AEWR is the wage that employers through the H-2A program have to pay their employees. It's a regional weighted-average rate, but it's basically the minimum you have to pay workers through the H-2A program. And the national average is $12.96, which is up six percent compared to where we were in 2018," said Nigh. The Department of Labor report says the biggest increases are found in the western United States in Ag states like California, Idaho Washington, and Oregon. "It's making it more difficult for farmers to plan. And as we look at net farm income being down 44 percent this year compared to where we were back in 2013, we're all feeling those squeezed margins. Especially on the fruit and vegetable side; labor is their largest cost. So, when you start seeing increases of six percent, it starts really pulling at the margins for those farmers who are already experiencing a pretty challenging economic time," said Nigh
The U.S. Department of Labor adopted the AEWRs earlier this year. The AEWR is above state minimum wages and is intended to prevent wages of domestic workers from being adversely affected by foreign workers. NASS proposed AEWR is $15.03 per hour for Oregon and Washington, up 6.4 percent from $14.12, making it the highest in the nation. Meanwhile, Oregon's $10.75 minimum wage is set to go to $11.25 next July 1. Washington's minimum wage is $11.50 and goes to $12 on Jan. 1.
The proposed AEWR for Mountain Region 1 (Idaho, Montana and Wyoming) is $13.48, up 15.9 percent from $11.63. The proposed AEWR for Mountain Region 2 — Colorado, Nevada, and Utah — is $13.13, up 22.8 percent from $10.69.
The proposed AEWR for Mountain Region 3 — Arizona and New Mexico — is $12, up 14.7 percent from $10.46. California's proposed AEWR is $13.92 per hour, up 5.6 percent from $13.18.
Michael Marsh, president, and CEO of the National Council of Agricultural Employers sent a letter to the U.S. Department of Labor Secretary Alexander Acosta and U.S. Department of Agriculture Secretary Sonny Perdue, asking for short-term relief from an expected increase in the H-2A wage rate for 2019. He wrote that short-term relief is warranted. "A requirement to pay a premium wage should, at a minimum, come with a finding that U.S. workers "similarly employed" would actually be "adversely affected" by the employment of H-2A workers at some other wage rate," Marsh said in the letter.