What Wage Would It Take To Attract American Farm Workers?

One area of the labor market that is dominated by immigrant labor is farm work, especially seasonal and migratory farm work associated with harvests.

Once or twice a year some offers up a headline showing that out of hundreds of applicants for this work that stick it out, only a handful are native born citizens.

Of course, as any good economist would tell you, this doesn't really mean that native born citizens are unwilling to do this work. It simply means that the price at which they are willing to do the work is much higher than the price at which immigrants are willing to do the work, which often pays more than minimum wage, but rarely pays well.

What I haven't seen is any serious effort by economists or anti-immigration advocates to ascertain what wage is necessary to voluntarily fill the available jobs with native born citizens.

Surely, the available information is sufficient to make clear that the wage would have to be significantly higher than it is now. And, some of the relevant information isn't to hard to find.

* This kind of work employs 3.5 million people in any given year.

* The pay is more than minimum wage, but not much, and isn't a full time, year round job.

Farm employers reported paying their hired, seasonal harvest workers—the folks picking and sorting everything from grapes to peaches to tomatoes—an average wage of $10.19 an hour in 2010. Because harvest work is seasonal, many farmworkers only find employment for part of the year; it’s not uncommon for farm laborers to report working about 1,000 hours a year, the equivalent of six months of full time work.

 * The impact of higher farm worker wages on the cost of produce would be pretty modest:

The average American household spent $515 on fresh fruits and vegetables in 2014, and about 28 percent of that—around $137—went to produce farmers. The farmers paid about a third of that to workers, while the rest went to farm maintenance and other costs. At current wages, farmworkers’ annual share of each family’s grocery bill at $45—less than 10 percent. 

Raising farm worker wages in the U.S. to $15 an hour—and annual earnings to $15,000—would represent a 47 percent wage increase. That might seem huge, but Martin says Americans spend so little on produce that it wouldn’t mean much for families’ grocery bills. 

Remember that farmworkers’ share of each U.S. household’s annual grocery bill is $45. If farm worker wages go up by 47 percent, grocery bills would go up just $21.15 a year, or $1.76 a month.

* Maybe $15 an hour still wouldn't be enough. Suppose that it was necessary to pay $23.77 an hour to find native born American workers to do those jobs, more than twice as much as the average employer pays now. This would cost the average household $52 a year, which would work out to about $1 a week.

At that wage, the average farm worker would make $23,770 per year during the farm working season, plus whatever part-time work that the person could find, perhaps 500 hours a year of part-time work in the off season at $8 per hour for a total of $4,000 of income in the off season, resulting in a total annual income of $27,770 per year from seasonal farm work and working half time at close to minimum wage in the off season. 

This isn't a lot of money, but it would be more than the federal poverty line for a family of four. And, the number of jobs involved would be greater than the total number of people unemployed in the United States at the moment.

Of course, not every unemployed person is fit to be a farm worker whether they want to do the work or not, at any price. The work takes a certain level of physical health that lots of unemployed Americans lack, putting aside any reluctance to do "hard work" which probably has more to do with low pay than a true unchangeable lack of motivation. For example, your average 60 years old former blue collar worker on disability probably isn't going to be able to do this work.

On the other hand, since this work wouldn't require licensing or a spotless criminal record or a diploma, in all likelihood, lots of able bodied people who have great trouble finding work and staying employed because they didn't graduate from high school, or have a criminal record, or what have you, who are at rock bottom in the current economy, would have a much easier time finding work and making a living without nearly as much government assistance as they receive today.

But, the notion that the economy would collapse because farmers couldn't hire people to harvest their crops at a price that the market could afford to pay in the absence of immigrant labor willing to work for lower wages is malarkey.

Also, if the wages for farm workers were high enough to fill those positions with native born American workers, this wouldn't just affect farmers and people who buy groceries. The higher wages available in this work would also reduce the supply of less skilled workers in all other lines of work, increasing their wages and reducing the number of less skilled workers who are unemployed.

* Maybe even $23.77 an hour wouldn't be enough. Lots of not very skilled temporary labor jobs in the gig economy, like sign spinning, pay that much and that is easier work. Maybe it would take wages of $30 an hour and increase the costs of groceries for the average household by $1.50 a month (while at the same time lifting millions of households that are the most sensitive to grocery prices out of poverty). This might bring about an annual income of $34,000 a year for a bread winner who is able bodies but has no other particular skills. 

In any case, certainly, at some price, it is almost certain that farmers could hire all the American farm workers they need to do this work, and it is highly unlikely that that price would be one that the market couldn't afford to bear.

High school and college students on summer vacation, for instance, might be a good source for a lot of these workers.

The government wouldn't have to set the wage. It could simply credibly enforce labor laws and repeal laws allowing legal immigrants to do that work as guest workers. Farmers would moan and groan about how this would put them out of business, but they'd eventually pay workers enough to get the work done, prices for produce would rise at wholesale which would translate into higher retail produce prices, and life would go on. It might even be necessary to impose some tariffs on agricultural goods to prevent this work from being offshored to lower wage farm workers in other countries. But, it could be done and once it was done, it wouldn't be very noticeable in the daily lives of consumers, while it would have a huge impact on the market for all low skilled workers.