Balancing Acts: Toward A Fair Seasonal Agricultural Workers Recruitment and Employment Bargain

May 19, 1999

Panelists: Monica Heppel, Research Director, Inter-American Institute on Migration and Labor; Monte Lake, Senior Advisor to Agricultural Employers, Mcguiness and Williams LLP; Cecilia Munoz, Vice President, Office of Research and Legislation of the National Council of La Raza

Moderator: Demetrios Papademetriou, Senior Associate and Co-Director, International Migration Policy Program, Carnegie Endowment for International Peace

On Wednesday May 19, the International Migration Policy Program convened another in it series of policy briefings to discuss the highly contentious issue of temporary workers in seasonal crop agriculture. The previous week, the US Senate held a hearing on the topicand California Senator Diane Feinstein committed to work toward a bipartisan bill. The hearing demonstrated that many of that sector's features, such as its tendency toward large commercial farms, archaic labor-management relations, poor wages and working conditions, and reliance on foreign workers holding all types of legal statuses, have remained unchanged for over one hundred years. Indeed, for most of this century there has been an apparent political impasse in the development of a system that meets the needs of both the agricultural industry and farmworkers. Last year, a bill devised primarily by growers looking solely after their own interests nearly became law. Last week's hearing suggested that an even more serious effort will occur this year. Carnegie's policy briefing's objective was to continue the dialogue, gain a clearer understanding of the various perspectives on the issue, and discuss a set of recommendations developed jointly by Demetrios Papademetriou and Monica Heppel. (To be published in June 1999 by the Carnegie Endowment)

Papademetriou posited that policy makers, farmworker advocates, and the agricultural industry have not yet been able to engage in constructive discourse to develop a system in which the needs of both farmworkers and the agricultural industry are met. While it is clear to all involved that the status quo is no longer acceptable, how best to ameliorate the situation evenhandedly continues to be significantly less apparent.

To contextualize the issue, Monica Heppel noted several factors:

• A "cheap food policy" is a key pillar of US social policy. Americans spend 8.4 percent of their income on the consumption of food and alcohol— about a quarter less than in 1970 and, with one exception (the French, who spent 16.7 percent), much less than half the proportion of any other developed country.

• The production of fruits, vegetables and horticulture products (FVH) is a mostly robust and expanding sector of the agricultural economy. The value of the sector's production in 1997 was more than $35 billion, with exports accounting for about 30 percent of that amount. The value of vegetable production increased 14 percent between 1993 and 1997, while that of fruits and nuts went up by 25 percent.

• The FVH sector, like most other economic sectors tends strongly toward concentration. Nearly three -fourths of US farms have sales of less than $50,000 and account for only 10 percent of total farm sales. In contrast, just four percent of all farms account for one-half of total sales, while less than one percent of farms produce 25 % of total US output.

• FVH agriculture is an important employer. Last year, the 1.45 million hired farmworkers comprised about 40% of the sector's total workforce.

• Farm work pays very little. In 1977, the median weekly farmworker earnings stood at $277-55% of the median for all workers. About 60% of all farmworkers earn less than $10,000 per year, well below the poverty level.

• The seasonality and arduousness of fieldwork militate against a significant year-round, permanent workforce. Partly as a result, foreign-born workers dominate the FVH labor market. This, in turn, reinforces the sector's reluctance to invest systematically in labor saving technologies, improve wages and labor standards in significant ways, alter its labor management practices, or offer the associated services (such as the provision of acceptable housing) that might allow it to attract a more loyal and stable workforce.

• Temporary foreign workers comprise only a miniscule proportion of the FVH workforce. In 1997, the US Department of Labor "certified" 23,352 H-2A workers, up from 17,557 in 1996 and 12,173 in 1994.

• The use of unauthorized workers is again widespread. Depending on the area, unauthorized workers can comprise up to 70 percent of the harvest workforce.

Taking the above factors into consideration, Heppel argued that a successful program must be guided by three primary goals; meeting the needs of both farmworkers and agricultural employers, increasing the job opportunities of US workers, and improving the circumstances of the families of U.S. agricultural workers and the lives of farm communities. Yet, Heppel noted that while the immediate focus must be on an agreement on farmwork, a broader issue also needs sustained attention: how to protect U.S. workers' interest in other low wage, low value-added, difficult, often seasonal, and thus undesirable labor market sectors in the global economy.

Ensuring a Balance

Heppel argued that every effort should be made to resist both the inevitable grower attempt to "tilt" reforms in a direction that makes few substantive improvements in farmwork (and continue to place growers in a commanding position vis-à-vis foreign workers), and equally inevitable efforts by farmworker advocates to actually "strengthen" the H-2A program (a program whose implementation they otherwise view with contempt) to the point of making its use impractical. Tilting too much toward the former would continue to produce unacceptable social and labor market policies and make any new or substantially altered H-2A program nonviable. Siding with the latter would make any result unacceptable to Congress.

Ensuring Job Opportunities for US Workers

A successful program must devise significant, yet fiscally realistic tax incentives for FVH growers to hire and retain US workers on a preferential basis—in effect subsidizing some employer costs for the duration of the experiment and testing concretely whether a workforce in perishable agriculture composed primarily of US workers can be constructed and maintained. Heppel argued that one of the most difficult issues surrounding the employment of foreign workers in any sector is the labor market test that is used to determine whether US workers are available and willing to perform the required work. Such a determination can be made through a government registration of both domestic and foreign workers or through the creation of an agricultural registration center that would be developed and run privately—though independently of growers.

Improving the Wages and Working Conditions of Farmworkers

The wages and working conditions of farmworkers have long remained significantly inferior to other U.S. labor sectors—stifled to a large extent by large numbers of foreign farm workers. Farm labor contractors, who are widely thought to discourage the employment of US workers and undermine collective bargaining efforts, have further exacerbated the overall poor working conditions. Heppel argued that there should be no incentive for hiring foreign workers based on their lower costs. Employers should be expected to offer a base wage to all workers that can be anchored on some of the existing government formulas plus, initially at least, a negotiated wage premium. In addition, employers employing legal temporary foreign workers could also be required to pay most if not all of the social insurance costs associated with employing U.S. workers.

The employment of unauthorized workers has become a thorn in the side of both growers and farmworkers. On one hand, it has further suppressed conditions for all farm workersand has left many migrant workers vulnerable to labor exploitation. On the other hand, the agricultural industry, increasingly targeted by US border controls and the enforcement of immigration-related work authorization rules, has protectively responded by building a panoply of legal and institutional structures that are both inconvenient and ineffective. Changing the legal status of most of the workers who now work in the fields without legal authorization would resolve both dilemmas. Future policy must adopt a "zero tolerance" posture toward the employment of unauthorized workers and establish sharp disincentives for this practice.

Housing and Occupational Safety and Health Administration are other issues of concern that have been at the heart of the opposition to the current H-2A program by western grower interests. Heppel argued that both sides and their allies should expend as much political capital as may be necessary to impress upon the Farmers' Home Administration and other similar state and federal agencies the need to review current housing programs with the objective of facilitating and expanding funding for publicly and privately constructed and/or rehabilitated housing. If appropriate housing is not readily available, a voucher system that also includes transportation to and from work or a travel subsidy (when the distance is greater than a negotiated maximum) could replace grower-provided housing. With regard to OSHA protections, Heppel suggested that it might be sufficient at this time simply to emphasize the enforcement of existing standards.

Finally Heppel noted that, if a grand bargain working to improve the lives of farm communities indeed becomes possible, care, energy, and political capital on both sides must be committed to improving government-provided services for this underserved population. Among these are education and health services—all of which must be designed to respond to the unique circumstances of living as a farmworker. Moreover, restoring to all agricultural workers the benefits they lost under the 1996 welfare reform should also be a common objective.

Program Integrity and Accountability Issues

Heppel noted that participation in any agreed upon situation should be made subject to "playing by the rules" and that all parties must be fully accountable for their actions. In terms of eligibility, employers would have to be exempt from sanctions for their previous employment of unauthorized workers and workers would register with the program without regard to their prior illegal status. Future accountability can be reinforced by viable and realistic compliance mechanisms. Bonding by individual employers or employer groups should be considered to provide disincentives for breaking the rules while making collecting fines easier. Bonding by workers should also be considered, perhaps taking the form of withholding an amount of the foreign worker's wages and depositing it into an interest bearing savings account accessible only by the workers and only from the country of origin.

In terms of enforcement, Heppel argued that Federal and state departments of labor/employment and immigration authorities should be given both adequate funds and the authority to enforce compliance with all the rules. A credible and even-handed enforcement effort is essential to the programmatic integrity and political viability of any experiment. It also creates both an incentive and an opportunity for all parties to an agreement to become socialized into new norms and can assist civil society institutions with an interest on an issue to exercise due vigilance. For an enforcement policy to stand a chance to succeed, however, it—and the rules it enforces—must work with, rather than against the market.

From the industry perspective, Monte Lake noted that agricultural employers are also seeking reforms of the status quo. Since 1986 when the Immigration Reform and Control Act (IRCA) introduced sanctions or penalties for employers who knowingly hired aliens unauthorized to work in the United States—and thus placed immigration control on "the backs of employers"—employers have been fearful that they would not have a sufficient legal workforce. Producers perceived that the sanctions adopted in the law were likely to end the supply of illegal aliens and cause financial ruin. To ease this fear, the "Replenishment of Agricultural Workers" (RAW program) was established by the law to be admitted if a labor shortage were found to exist. However, this component of the law was never enacted, and many workers ultimately moved out of the industry. New concerns arose in 1995 and 1996 with the passage of the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA). This movement resulted in audits and increased funding to the southern border—all of which placed added pressure on the agricultural workforce supply.

In effect, Lake argued, these reforms have created several significant problem areas for the industry and have contributed to industry instability. These areas include the submission of fraudulent documents (comprising approximately 70-80 percent), falsified government referrals, and problems with the Social Security Administration in cases of mismatches between numbers and names and fraudulent numbers given on employment verification forms. Under these circumstances, the industry is often left with no recourse.

The existing temporary program known as H-2A—intended to enable agricultural employers to obtain seasonal alien workers during periods when there is an inadequate domestic workforce—has become a nightmare for agricultural employers. Lake argued that the system is saddled with bureaucratic complexities, excessive paperwork requirements, and slow and inconsistent decision-making by the U.S. Labor Department. Working within this system has been a cumbersome process and the program often makes unrealistic requirements such as demanding that growers guess the number of workers they will need in the upcoming season. In addition, the Department of Labor rarely provides needed workers in a timely manner.

One of the primary criticisms of the H-2A program has been that the industry uses the system to keep down labor costs and that the wages and working conditions of all farmworkers have consequently remained inadequate. Lake pointed out that growers use the H-2A program to compensate for a shortage in the supply of domestic agricultural workers. Currently, only 31,000 workers come in through the H-2A program. While not advocating the expansion of the guestworker program, Lake argued in favor of making it work better. Wages and working conditions might be improved by establishing a premium wage rate and changing the legal status of many foreign workers. The need for adequate housing and health care are other areas that must also be addressed.

In working to improve the status quo, Lake argued that both the agricultural industry and farmworkers must champion a commonality of interest. Yet, both sides must bring realism to the debate. The agricultural industry is in international economic competition and the prices of fruits and vegetables must remain competitive with those of developing countries. Regarding employment eligibility, Lake noted that the agricultural industry is looking for a legal system for employing workers. The pilot programs established by the INS have worked well and are increasingly accepted within the industry. Another viable option might be to create a farmworker registry to connect legal U.S. workers with agricultural employment opportunities.

Cecilia Munoz agreed with Lake's fundamental premise that the status quo is unacceptable, both from the farmworker and grower perspective. Unlike any other labor sector in the United States, current conditions in the agricultural industry at the end of the century are not much better than they were at the beginning. For Latinos, who are heavily represented within the industry, this stagnation has amounted to a civil rights violation, making this group one of the only communities still struggling with standard labor requirements such as the need for adequate housing, protection from exposure to hazardous chemicals, and basic sanitation rights. This, she argued, is a serious crisis.

Thus far, the legislative debate has been framed as a labor shortage problem, despite the fact that unemployment statistics are in the double digits among domestic farmworkers. Growers have been unwilling to make the necessary changes to attract workers because it is cheaper to rely on an illegal workforce. Hence, the existing labor supply problems are less an indication of a labor shortage than of the role the industry has chosen to play. A primary goal must be to give incentive to the agricultural industry to transform itself.

Indeed, the agricultural industry is the only labor sector that has not yet undergone the transformation of labor standards. The government has offered workers as a subsidy, creating a situation where the labor standards of the agricultural sector are not on equal footing with those of other industries in terms of laws, wages, and working conditions. Munoz argued that any meaningful debate must be both honest and transformative, and deal with these problems directly. Arguments dealing only with the expansion of the H-2A program would only cause further deterioration in existing labor standards.

Munoz noted there has been some suggestion that a meaningful debate will occur, centered on legalizing migrant workers to ensure them the same labor protections afforded to American workers. Future debate should strive to create meaningful solutions that meet the agricultural industry's need for workers without enslaving farmworkers in the process.