Aug 10, 2017

Report: Dramatic H2-A impact in Washington state

A study prepared for wafla by ECONorthwest finds that H-2A workers generated $619 million in economic activity for the tree fruit industry in 2015. In that year, Washington farmers received visas for 11,844 workers through the H-2A legal worker program.

In 2017, that number has increased 31.8 percent, with a proportional increase in economic contribution. The study demonstrates the economic importance of H-2A workers to the Washington economy in light of well documented labor shortages.

“The H-2A program benefits all workers, foreign and domestic, through higher wages, free housing, and stringent work regulations,” said wafla CEO Dan Fazio. “The Trump administration asked us to make the business case for this program, and this study answers that challenge. We look forward to working with the Administration and elected officials from both parties to increase access to this great program.”

Farmers who enter the H-2A program agree to pay a minimum wage of $13.38 per hour to all workers, nearly 22 percent higher than farmers who don’t use the program. In addition, the farmers agree to stringent regulations, including hiring all qualified domestic workers and providing free housing and transportation to workers who need it. In exchange, these farmers are allowed to petition for visas for foreign workers if there are insufficient numbers of domestic workers.

“The H-2A legal worker program is expensive and filled with red tape, but farmers have embraced it because it is the right thing to do,” Fazio said. “The farmers achieve a stable workforce, and workers receive the dignity of legal presence.”

Wafla, a membership-based agricultural association, enlisted ECONorthwest (ECO) to analyze the economic contributions of the H-2A seasonal visa program in the state of Washington.

The federal H-2A program enables agricultural employers to legally hire foreign workers if there are insufficient numbers of U.S. workers available to fill seasonal, time-sensitive agricultural positions. The agricultural industry in Washington produces a diverse range of high-value, labor-intensive crops and the industry plays a large and important role in the state’s economy. The production of these crops requires short-term labor that the domestic workforce frequently fails to supply at prevailing wages.

The number of certified H-2A workers in Washington has grown from 2,981 in 2010 to 12,081 in 2015, with 64 percent working in tree fruit crops during 2015.

For this analysis, ECONorthwest measured the direct economic activity associated with the H- 2A workforce in Washington in 2015 for apples, pears, and cherries using the input-output modeling software IMPLAN1 (IMpact Analysis for PLANning).

To perform this analysis, ECONorthwest used publically available data from USDA, the U.S. Department of Labor, and the State of Washington. Due to limitations in the available data, the economic contributions analysis was performed for Washington State as a single geography. Based on this analysis, ECONorthwest finds that H-2A workers:

• Account for a growing share of workers harvesting apples, pears, and cherries
• Represented $54,547 in output per worker in 2015, up from $39,598 in 2010
• Increased their average production by 2.9 tons per worker between 2010 and 2015

Additionally, the results of an economic contributions analysis show that in 2015, the H-2A labor force for apples, pears, and cherries supported:

• $619.0 million in total economic activity in Washington State
• $111.5 million in total labor income for Washington State
• 9,772 full-year equivalent (FYE) jobs in Washington State

The H-2A program, authorized by the United States Immigration and Nationality Act, seeks to relieve pressure on agricultural employers facing domestic labor shortages. Under the program, agricultural employers that have demonstrated a shortage of available and qualified domestic labor may legally hire foreign agricultural workers for seasonal or temporary work.

Foreign workers receive a guaranteed wage, an employment contract, free housing and transportation, and legal status in a highly regulated visa-based program. The agricultural sector in Washington has experienced a decline in available domestic labor supply in recent years. This has resulted in increased use of the H-2A program to ensure an adequate number of workers are available to tend to and harvest crops.

This is especially true in labor-intensive fruit crops, where non-H-2A employment has declined by 7 percent since 2010. Since that time, reliance on the H-2A program has increased across the industry to minimize the uncertainty of finding adequate labor.

“As economic opportunities continue to improve in developing countries and the current migrant workforce ages, growers are becoming increasingly concerned about the future supply of agricultural labor,” the report states.

Washington State University (WSU) projects that farm labor will drop between 0.7 percent to 1.4 percent per year through 2038. For tree fruit, this is especially problematic given the sector’s heavy dependence on labor. For context, the WSU study finds that labor represents 17 percent of variable costs for all U.S. crops. In tree fruit, however, labor represents 48 percent of variable costs.

For access to the full report, visit here.

Source: Wafla