Mar 4, 2008

Will farmers be forced to rely on H-2A labor?

Fruit and vegetable growers may find their seasonal labor shortage less severe this year than last – but watch out for 2009. There’s a “perfect storm” brewing.

That’s the opinion of Dan Bremer, the owner of AgWorks, a company in Lake Park, Georgia, that helps farmers through the legal hoops and paperwork to get legal H-2A workers for their farms. He shared his views before a packed auditorium in Savannah during the Southeast Regional Fruit and Vegetable Conference in January.

Bremer spent 24 years working for the U.S. Department of Labor in Atlanta before starting his company 10 years ago. He has helped farmers obtain thousands of legal workers from foreign countries since then, and recently, business has been booming.

Julie Suarez, the director of public affairs for the New York Farm Bureau, shares the view of many other observers who see the outlook for seasonal laborers this year as uncertain at best. Is the traditional migrant stream a thing of the past? Will the stream flow normally this year?

Farmers aren’t sure how many of their workers are here legally, even in the traditional migrant stream, but many have a “borderline terrible feeling” that many of them could be chased off by the sight of INS (Immigration and Naturalizaton Service) buses that are highly visible in New York.

Suarez is not optimistic that Congress will do anything this year to fix immigration problems, so a key question is whether the federal Departments of State and Labor will staff up for and streamline the H-2A process, which is supposed to supply legal foreign workers when farmers demonstrate they need them.

The old idea that farmers could have all the local labor they want if they’d pay a decent wage is gradually fading away, Suarez said, and she sees the streamlining currently going on at the Department of Labor as “a sign” of recognition of a genuine labor shortage in agriculture.

A switch to H-2A?

Bremer sees this scenario developing this year:

There are an estimated 12 million people in this country illegally, some of whom work in agriculture. Of the 2 million seasonal workers on farms, 60 percent to 90 percent are illegal, Bremer estimated.

Many who once worked on farms no longer do, having moved into less demanding, less seasonal work, many in construction. The construction industry is not doing well now, with a slump in housing, so this year some of those workers will probably again look to farms for employment. For farmers, that means more labor will be available. Agriculture is booming and needs more workers. But when the overall economy recovers, which Bremer thinks will happen in 2009, they will leave once again.

Meanwhile, another force is also at work. The border with Mexico will continue to be tightened and the supply of illegal workers will shorten.

“The confusion over Social Security mismatch letters will be worked out and the borders will be closed,” Bremer said. “The fence is going up.”

Enforcement efforts directed at employers will intensify, from both federal and state governments. Oklahoma and Arizona have enacted laws to jerk the business licenses from businesses that hire illegal workers, Bremer said, and other states are taking the attitude they need to step in to do the federal government’s job of curbing illegal immigrants.

Bottom line, there will be fewer recently arrived workers, the ones more likely to work on farms. Bremer sees these two pincers coming together in 2009.

On the optimistic side, Bremer thinks the federal government will get its act together so growers can get the legal workers they need through the H-2A program. While H-2A is cumbersome, fraught with paperwork, somewhat slow and intimidating to farmers, there is no legal limit to how many workers farmers can obtain under the program. The government is supposed to respond if farmers say they need workers and ask for them.

“It’s kind of been better” recently, Bremer said, as the government staffs up to deal with farmers’ needs for legal workers.

Bremer’s company, AgWorks, helps farmers through the process so workers will arrive at their farms, legally, in the right number and the right time, for a service fee of about $125 a worker. That is, of course, in addition to all the other costs farmers must pay for H-2A workers.

His company is not the only one performing this service. Others also recruit workers, prepare and file paperwork for the Departments of State and Labor, help workers obtain the proper immigration papers and work with farmers to prepare for the workers’ arrival. They help educate growers about their responsibilities.

H-2A regulations require employers to provide housing, local transportation to and from the worksite and to town on weekends, and transportation to and from their native countries at the start and end of the work period, Bremer said.

These companies, with the help of recruitment offices and consulates on the labor supply end (usually Mexico), make arrangements for international flights or charter buses for foreign workers.

Another such H-2A placement company is H2AUSA, owned by Mike Nobles. His company offers different levels of service, including the “turnkey level,” in which his company does everything: It finds the workers, files the paperwork, transports the workers, finds them housing (off or on the host farm), delivers them to the work site, drives them to the store or laundry, does the payroll, assures the workers arrive for and leave after the contract period – and sends one bill to the farmer who used the workers.

“Only two or three companies do what we do,” he said. “We’re the largest.”

His company also placed H-2B workers, which work in industries other than farming. Unlike H-2A, which has no cap on numbers, H-2B has a low cap that was already filled only weeks into the new year, Nobles said.

Web site addresses for these two companies are www.agworksinc.com and www.h2ausa.com.

Besides private companies, other organizations – farm associations, for example, like Florida Fruit and Vegetable Growers – also do this work of finding legal workers, getting the paperwork done and delivering them to farms.

FLOC, the Farm Labor Organizing Committee, also procures – and represents – workers from other countries and has been active in Ohio and North Carolina.

The migrant stream

While all this sounds easy enough – you almost wonder why farmers haven’t done it before – there is plenty of downside in H-2A.

Michigan State University labor economist Vera Bitsch said: “My advice is look at U.S. workers first, including migrants. If you give them up for H-2A, it’s hard to get them back.”

The key problem is that H-2A don’t easily co-exist with traditional labor procurement methods. Bottom line, H-2A rules dominate when H-2A workers appear on the scene. H-2A doesn’t augment the local labor supply; the local supply augments H-2A.

It’s really two different systems, Bitsch said.

“In Michigan, we’ve had a reliable migrant stream, people who wanted to come here for the wages and also for the support services offered by state government,” she said.

This “traditional” system has, in many cases, brought the same workers back year after year, creating personal relationships between farmers and workers. Many of these workers have settled out of the migrant stream and live permanently in their new communities. Many have become year-round farm employees. Many farmers don’t want to give up this system and trade it for another.

The H-2A system was created in the immigration reform laws of mid-1980s, as a concession to farmers, with “penalties” involved if they chose to use it. That is part of the reason there are so many hoops to jump through.

Growers have to demonstrate they can’t find enough local workers, even when they try aggressively to recruit them.

Then there is the Adverse Effect Wage Rate that must be paid – a wage higher than the legal minimum wage. In Michigan, the minimum wage is $7.15 and the AEWR is $9.65. In addition, growers must pay transportation to and from an H-2A worker’s home country, provide local transportation, provide housing at no charge and guarantee at least 30 hours of work per week for a specified contract period.

Moreover, if qualified local workers come to the farm during the first half of the contract period and want to work, the farmer must hire them – whether he needs them or not – and pay them the same wage as the H-2A worker.

H-2A workers don’t pay taxes, so employers don’t have to pay a share of Social Security taxes or withhold and remit tax money. H-2A workers do not need to be paid overtime (nor do other workers who do strictly farm work).

H-2A workers are not entitled to social services. Migrant workers, if they are legal U.S. residents, are entitled to social services from state and local governments.

AgWorks’ Bremer believes a switch to H-2A is taking place, and that it’s a good thing. The migrant way is obsolete and not compatible with modern life.

“In the H-2A way, there are benefits for everybody,” he said.

They get good wages and live in decent housing. No children come, with all the problems of maintaining their education and providing child care. People aren’t permanently taken out of their home cultures and resettled in new places. They are not a burden on American taxpayers. They don’t qualify for benefits during the time of the year they are not working.

“They want to live there, not here,” Bremer said, “but they need the money so they come here to work. The wages they earn in a few months here can feed their extended family in their home country for a year.”