Conference Report

Fruits and vegetables were two thirds of California's $47 billion in farm sales in 2015, agricultural employment has been increasing to an average 420,000, and almost 850,000 unique hired workers are employed sometime during the year on the state's farms. Farm workers are mostly unauthorized Mexican-born men who have settled in California with their families.

Four timely issues were discussed during the 2017 farm labor conference. First is fresh-produce buyers requiring growers to abide by labor and other protocols that go beyond government regulations in order to sell them commodities.  Second is the four-S response of farmers to fewer new farm workers, including satisfying current workers, stretching them with mechanical aids, substituting machines for hand workers or switching to less labor-intensive crops, and supplementing current workers with younger H-2A guest workers. Third are the likely effects of the Trump Administration's enforcement of laws against unauthorized migration on farm workers and agriculture, and fourth is a review of ALRB activities and the status of the state's cannabis industry and its workforce.

Labor Compliance and Sustainability

Federal and state laws regulate farming practices and the wages and working conditions of hired farm workers. Most buyers expect growers who sell them produce to abide by all applicable laws, and some go beyond legal minimum and require their suppliers to pay higher-than-minimum wages, provide additional benefits, and form worker-employer teams to ensure that food safety, labor, sustainability and other protocols are followed on a day-to-day basis.

The two leading labor compliance systems are the Fair Food Program (FFP) and the Equitable Food Initiative (EFI).  The FFP focuses on tomatoes and other vegetables in Florida, while the EFI covers fruits and vegetables in California and other states as well as in Canada and Mexico.

Labor compliance systems are based on codes or protocols, indicators or data, and audits by third parties. The codes lay out the requirements that employers must satisfy in terms of wages and benefits, working conditions, and education of workers to be certified. Indicators or data are generated by workers as they punch time clocks and report on work accomplished as well as calls to complaint hotlines and their disposition. Third parties audit farming operations by reviewing data and interviewing workers and managers in order to certify that operations satisfy the code.

Growers have incentives to participate and adhere to codes of conduct in order to sell to particular buyers or to obtain higher prices for their produce; they may also face less shrinkage in the form of rejected produce. Labor compliance programs are new, and there are few analyses of grower benefits from participation, and whether they are mostly higher prices, access to preferred buyers, and/or less shrinkage. There are also few studies of the effects of participation in labor compliance programs on recruitment, worker earnings and productivity, and retention, although most of those involved in labor compliance systems report that workers feel empowered by learning about their rights and responsibilities.

Labor compliance systems are sometimes imposed on producers in developing countries who export to richer countries, as with British supermarkets that require producers in Kenya and elsewhere to abide by codes of conduct in order to export certified coffee, flowers, and other commodities. One reason for private labor codes in developing countries is that governments are often unable or unwilling to enforce protective labor laws. There is no estimate of the share of global produce covered by labor compliance agreements, but in the US the certified share of fresh produce is very small, less than five percent, and consumers willingness to pay higher prices for certified produce is uncertain.

The overarching goal of labor compliance systems is to improve wages and working conditions. There are many questions, including how to make the transition from qualitative pass-fail checks to data that would allow scoring on a 100-point or similar scale, whether codes should vary by commodity and area, and whether auditors can be objective when they are being paid by the growers whom they are auditing. Some of those who want to improve conditions for farm workers fear that farm employers will abide by the codes only for directly hired workers, and use FLCs and other nonfarm entities to bring the lowest-wage workers most in need of protection to their farms.

Agricultural sustainability, defined as farming practices that are sensitive to the environment, responsive to the needs and interests of society, and economically feasible to implement and maintain, are of growing interest. The concept of sustainability was highlighted by the Brundtland report of 1987, which defined sustainable development as meeting “the needs of the present without compromising the ability of future generations to meet their own needs.”  Most sustainability programs have a code of best practices that growers can implement, receive certification of their sustainability, and label their commodities as produced sustainably.

Many sustainability programs are based on software that collects data on farming inputs, such as chemical and water usage, and outputs, including production volume and quality.  These data allow farm managers to tailor inputs to particular soil and other conditions to maximize yields while minimizing chemical and fertilizer usage and adverse effects on the environment.

The California Sustainable Winegrowing Practices (SWP) program is based on the three E's of aiming to be Environmentally Sound, Socially Equitable, and Economically Feasible (www.sustainablewinegrowing.org). The SWP includes an HR plan to comply with labor and related laws, such as having written contracts with FLCs who bring workers to the vineyard.  The SWP advises employers to interview applicants and to orient new hires to their duties with a handbook.  Employers are advised to provide safety training and continuing education and training to supervisors to ensure continued labor law compliance.

Farm Workers: Fewer Newcomers, 4-S's, Housing

In 2015, some 16,400 agricultural establishments (NAICS 11) in California hired an average 421,300 workers, and paid them $12.8 billion or an average $30,300 if they worked 2,080 hours. The total number of workers employed on California farms sometime in 2015 is double average employment, 848,000, and these workers earned an average $20,500 from all their farm and nonfarm jobs.

The 705,000 primary farm workers, those whose maximum earnings from all California jobs were in agriculture, earned an average $17,500. Some 402,000 or 57 percent of primary workers were brought to farms by nonfarm support services for crop production, and their average annual pay was $13,500.  The 293,200 crop support workers who were brought to farms by FLCs had average annual pay of $10,000, equivalent to $10 an hour for 1,000 hours.

The NAWS finds that most California crop workers were born in Mexico (90 percent), not authorized to work in the US (56 percent), aging (average 39), and earning $15,000 to $17,500 a year for 200 days of farm work a year, less than $100 a day. California workers report lower wages, $10.10 an hour in 2013-14, than all US hired farm workers, $10.20. Over 90 percent of California crop workers were employed in fruits and vegetables when interviewed, but only 25 percent were doing harvesting jobs. A third were employed by support services such as FLCs, while two-thirds were hired directly.

Unauthorized Mexico-US migration has almost stopped, so that less than two percent of crop workers have been doing farm work less than a year, down from a quarter in 2000 (excluding H-2A workers). The short-term responses to fewer newcomers include satisfying current workers, stretching them with mechanical aids and other changes, and supplementing the workforce with H-2A guest workers. The longer-term responses include more mechanization, more guest workers, and increased imports.

Most farm workers live off the farm and commute to farm jobs in car or van pools. Farm worker housing is often crowded, especially in coastal areas such as Salinas and Oxnard. Between 2007 and 2016, California's minimum wage rose by 22 percent in 2016 dollars, average hourly earnings for directly hired field workers rose 13 percent, and average farm worker employment rose 12 percent.  The state's decision to raise the minimum wage from $10 an hour in 2016 to $15 in 2022 puts upward pressure on farm wages, but so far has been associated with rising rather than falling agricultural employment.

Some 5,000 agricultural establishments in Florida hired an average 76,200 workers in 2015 and paid them $2.2 billion or an average $28,850 if they worked 2,080 hours. Average annual employment declined 18 percent between 2006 and 2016 due to citrus greening that reduced the orange crop. Agricultural employment peaked at 92,100 in January 2015 and fell to a low of 53,600 in July.

Florida has more jobs certified to be filled with H-2A guest workers than any other state, 22,800 in FY16, and many H-2A workers are employed to pick oranges; it is estimated that 80 percent of Florida oranges are picked by H-2A guest workers. One study put the non-wage costs of hiring a H-2A guest worker at $1,950, including $1,200 or almost two thirds to cover the cost of housing the guest worker while he is in Florida. The University of Florida developed a training system to educate farm labor supervisors in order to increase adherence to labor laws and worker satisfaction.

The H-2B program admits up to 66,000 foreigners a year to fill seasonal nonfarm jobs. Employers request more than 66,000 H-2B visas, and the government in some years has allowed foreigners who worked with H-2B visas the year before to return without counting against the cap, so that in FY16 some 85,000 new H-2A visas were issued. The total number of nonfarm guest workers in the US was 136,000 because some workers renew their visas and some are certified for jobs lasting longer than the usual nine months. Landscaping (40 percent) and reforestry (10 percent) account for half of H-2B jobs.  

The H-2A program's worker protections include a requirement that employers provide free approved housing to guest workers, while the H-2B program aims to protect US workers from “unfair competition” with the 66,000 a year cap on admissions. Employers are not required to provide free housing to their H-2B workers, and can conduct their own surveys to determine the “prevailing wage” for the job that must be paid to H-2B workers.  Critics allege that employers use private wage surveys to hire very productive H-2B workers at wages that are low by US standards.

The outgoing George W. Bush administration made employer-friendly changes to the H-2A and H-2B programs. These H-2A regulations were reversed by President Obama, and some of the Bush H-2B regulations were struck down by the courts. The Obama administration also attempted to reverse the Bush rules with new regulations, but the Obama H-2B regulations could not be implemented because of legal challenges and riders attached to congressional appropriations bills that prohibited DOL from using funds to enforce them.

Congress in 2016 made changes to the H-2B program: continuing the returning worker exemption to the 66,000 cap, allowing more use of private wage surveys, and ending DOL authority to audit employer recruitment of US workers. This experience shows that the Trump administration could make significant changes to guest worker programs via regulatory changes and (lack of) enforcement, and that Congress can make major changes without stand-alone legislation by withholding funds for enforcement.

Immigration

President Trump issued three executive orders during his first week in office, setting in motion plans to build a wall on the 2,000 mile Mexico-US border, increasing deportations, and reducing refugee admissions and blocking entries from 6-7 countries; parts of the third executive order were blocked by courts.

Stepped up enforcement against unauthorized foreigners in the US began under President Obama, who deported or removed a record two million foreigners over eight years by using the criminal justice system to more aggressively target foreigners convicted of US crimes and others encountered during the search for them.  Trump is building on Obama's legacy: his executive order makes all foreigners who come in contact with the US criminal justice system subject to removal, including those arrested for US crimes but not necessarily convicted. The Obama-Trump focus on “bad hombres” or “criminals” helps to reduce public opposition to ever-more deportations.

Trump Administration efforts to prevent more unauthorized migration and to deport unauthorized foreigners in the US are sometimes colliding with state and city governments that support legalizing unauthorized foreigners. There are many flashpoints, including DHS expectations that cities and counties will continue to detain suspected unauthorized foreigners who are leaving prisons and jails after serving sentences for US crimes; so-called sanctuary cities refuse ICE requests to hold foreigners so that ICE can take them into custody. There are also fears that data collected from DACA recipients and those seeking local ID cards could be used for immigration enforcement.

Foreigners convicted of US crimes are priorities for detection and removal, but almost all unauthorized foreigners are subject to removal, increasing fear of DHS agents as well as state and local police in immigrant communities. Those working in communities with unauthorized farm workers report more of a “hunkering down” than a voluntary or “self deportation” response of leaving the US. They suggest that farm workers are likely to continue to work, but to refrain from acquiring education that could raise their earnings over time or to participate in government programs that could benefit them and their families.

The immediate impact of Trump's stepped up enforcement of migration laws may be to reduce the supply of California farm workers by six percent, with half of this impact arising from unauthorized workers withdrawing from the labor force. The longer-term impact could be a reduction in the supply of labor by nine percent, almost all due to a possible mandate that all employers must use E-Verify to check the legal status of new hires. This would make it harder for farm employers to argue that they did not know they were hiring unauthorized workers, and deter some unauthorized workers from applying for jobs. Mandatory E-Verify is likely to increase reliance on legal guest workers, accelerate labor-saving mechanization, and lead to more imports of labor-intensive commodities.

ALRB

The ALRB was created in 1975 to administer the ALRA, a state law “to ensure peace in the agricultural fields by guaranteeing justice for all agricultural workers and stability in labor relations.” Farm labor disputes have moved from the fields and streets into hearing rooms, but there are ever-fewer union contracts and members. The number of union contracts on California farms peaked at 250 in the late 1970s, versus 30 today.

Private-sector union activity in the nonfarm economy has also declined since the 1970s, so that only six percent of private sector workers were union members in 2016. If there are 10,000 farm worker union members in California in 2017, they are two percent of average employment in California agriculture and one percent of the unique workers employed in agriculture.

ALRB activities focus on two major types of issues.  First are protected concerted activities, as when employers retaliate against workers who request wage increases or working condition changes when no union is involved. Second are the efforts of workers to decertify the union representing them and the efforts of unions to win contracts at “old” certifications, farms on which the union was certified to represent workers before 2002, but a first contract was not negotiated.

At Gerawan, the state's largest tree fruit grower, the UFW won an election in 1990, no contract was negotiated, and in 2012 the UFW requested a resumption of bargaining. After no agreement was reached, the UFW requested mandatory mediation and conciliation (MMC), which led to an arbitrator developing a first contract that the ALRB ordered Gerawan to implement. Gerawan refused, and the Fifth District Court of Appeal declared the MMC law unconstitutional on equal protection grounds. The California Supreme Court will hear the ALRB's appeal in a case that continues to consume a significant portion of the ALRB's resources.

Cannabis

California was the first state to legalize medical marijuana with Prop 215 in 1996, which gave people suffering from cancer and other diseases the "legal right to obtain or grow, and use marijuana for medical purposes when recommended by a doctor." Medical users can acquire a card on line for $50 and no medical exam, and then legally buy marijuana from retail stores and delivery services. 

California has not regulated cannabis production and use extensively, but federal drug laws continue to classify marijuana with heroin, calling for a minimum five-year prison sentence for growers with more than 100 plants and prohibiting marijuana from moving legally across state lines. There has been little enforcement of anti-cannabis laws in states where marijuana is legal, but federal agents enforce laws that prohibit marijuana from moving across state lines.

California voters approved Prop 64 in November 2016 to legalize recreational marijuana after January 1, 2018, prompting efforts to anticipate and profit from an expanding industry. Farmers will have to obtain a license to grow marijuana and pay a $148 per pound of flower tax, and there will be a special 15 percent excise tax on retail marijuana sales plus the average nine percent state and local sales tax.

An estimated 13.5 million pounds of marijuana were produced in California in 2016, including 11 million pounds or over 80 percent produced illegally and sold outside the state. By region, an estimated 4.2 million pounds or 37 percent was produced on the north coast, 3.9 million pounds in the northeastern part of the state, 1.8 million pounds in the southern SJV, and 1.4 million pounds in the central coast.

Most marijuana appears to be produced outdoors on plots of one-fourth acre or less. These outdoor farms produce an average 250 to 350 pounds a year, for a total of 8.1 million pounds or 60 percent of total production that was worth an average $1,400 a pound or a total $11 billion (at an average 300 pounds per farm, there would be 27,000 outdoor farms). Another 3.2 million pounds are produced indoors, where the value is $2,300 a pound or $7 billion, and 2.2 million pounds are produced in a mixed environment where the value is $1,600 a pound or $3.5 billion, making the farm value of all marijuana about $22 billion.

Trimming marijuana flowers to leave the buds requires 10 hours per pound. An outdoor operation producing 210 pounds a year has two non-trim FTE workers and one trim FTE, which means an average 30 hours of labor per pound of marijuana produced.  The total FTE for all 13.5 million pounds of California marijuana would generate 200,000 FTE jobs and, if there are two unique workers per FTE job in cannabis as in the rest of California agriculture, there would be 400,000 marijuana workers.

At $20 per hour, labor costs are in $600 per pound; most farm workers are paid in cash, and neither they nor farmers pay taxes.  With legalization, farmers who obtain licenses are expected to pay lower cash wages because of the payroll taxes for work-related benefit programs they will begin to pay, which may make it difficult for them to compete with non-licensed growers who continue to pay only cash wages.

Retail prices average $3,000 a pound in the current medical marijuana market. A new 15 percent excise tax beginning in 2018, plus state and local sales taxes that average nine percent, mean that taxes will be $900 or 30 percent of the retail price. There will also be new costs for safety tests and trace back systems equivalent to $500 a pound, so that legal marijuana retailing for $3,000 a pound would have taxes equivalent to half of its price. Retail prices may rise with legalization, and there could continue to be a significant underground and untaxed market despite legalization.

Most of California's marijuana is shipped to buyers outside California, suggesting that much of the state's cannabis industry may remain unlicensed and illegal, since registering and paying for a license in California will not allow marijuana to be legally shipped outside the state. Furthermore, licensed growers will have to decide which segment of the cannabis industry they want to serve.

Seven other states including Colorado, where legal cannabis sales were over $1 billion in 2016, allow recreational marijuana use.  If federal law changes to allow interstate shipments, California could become a major marijuana exporter to other states. The California Growers Association says that ever more growers are obtaining county-issued grower permits. The CGA is concerned about operations such as Harborside Farms in Salinas, which has 360,000 square feet of green house space to grow 100,000 plants, far more than the typical 5,000 square foot cannabis operation.

A unique feature of the state law implementing recreational marijuana is a labor peace provision that requires marijuana growers with 20 or more employees to sign an agreement with a union that gives organizers access to workers. The law allows employers and unions in cannabis, but not in other commodities, to negotiate CBAs without an election to determine if workers want to be represented by a particular union.

The cannabis labor force, at least in the northern coast of California, is unlike the rest of agriculture. Many “trim-immigrants” are friends and relatives of growers who arrive in the US on legal tourist visas from Eastern European countries and earn $200 to $600 a day trimming marijuana leaves at piece rate wages for up to 14 hours a day. Since wages are paid in cash, there are no taxes, making trimming jobs attractive to those seeking non-taxed earnings.

The United Food and Commercial Workers represents 1.3 million workers, including “tens of thousands” of cannabis workers.  The UFCW wants the federal government to allow cannabis firms to use the banking system, which would reduce the use of cash and security issues for employers and workers.