OSU Economist: Ag OT Will Hurt Farms & Workers

A recent economic analysis by Oregon State University shows the state’s new ag overtime rules will negatively impact farm profitability and result in decreased paychecks for workers.  When the idea requiring overtime pay in the farming industry was first floated, supporters said farm workers across the state would benefit from larger paychecks.  OSU economist Tim Delbridge said says while a noble idea, the data does not support that claim.

“Our analysis showed that there's a lot of workers, probably a majority of workers, are going to see stagnant total wages, or perhaps a decrease in total wages earned because they're going to be working fewer hours,” he stated.

Delbridge likened the issue to fast food or the service industry, where he pointed out it’s very challenging for employees to get overtime work; with hours typically capped at 35-40 hours.  And those reduced hours translate into smaller paychecks for farm workers.

Moving forward, Delbridge says this data highlights the importance of farmers managing payroll costs.

“Everybody is going to have to adapt in their own way. Some are going to invest more in automation. Some are going to hire more workers, some are going to change their production plans to minimize labor. Everybody's going to have to do that, and everybody has to keep a close eye on their labor costs to make sure that they can stay viable. Honestly and unfortunately, I do think that there are going to be some farms that are kind of struggling as it is, and they may not be able to adapt profitably.”

Delbridge added the increased overtime wage could also lead to an increase in farm consolidation.  Click Here to read the economic analysis.

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