Report: Farm Workforce Modernization Act Would Save Billions

The Farm Workforce Modernization Act awaits Senate action during the lame-duck session, and many in the farming community say this legislation is the closest meaningful immigration reform has come to the finish line in years.  Research by David Bier, Cato Institute associate director of immigration studies, said s farmers would save billions over the next few years if the Senate passes the legislation.

"The Farm workforce Modernization Act would reduce labor costs for H-2A farms by about a billion dollars in the first year and about $1.8 billion in the second year, with even greater savings in the years to follow. Obviously, these savings would result in vastly greater productivity of those farms because they would be able to hire a lot more H-2A workers and that's going to result in a lot more productivity on those farms.”

Procedural changes by the Department of Labor regarding how it allows states to estimate prevailing wage for H-2A farm workers will result in more prevailing wage surveys.  Those surveys aren’t happening right now because they have strict statistical requirements that the Department of Labor rule will remove, forcing the cost of labor to go even higher.

"And in some cases, you're going to have a margin of error for these surveys up to 18 percent. So, very faulty surveys are going to be coming our way and we're going to see a lot more wage variability. We're going to see a lot more wage increases because the prevailing wage can only increase the wage required of these H-2A farms, it cannot decrease.”
Meanwhile, food prices are already inflated, and without a fix for farm labor, Bier said prices will continue to increase.

“Food prices increased 11 percent from last September to this September. And that's in part a consequence of the supply chain issues and the other issues in the food sector, but it's also a consequence of the labor costs and the labor shortage that farmers are facing. These higher wage requirements in the H-2A program, ultimately those wage increases are passed on to consumers who pay higher prices.”

He encourages farmers and ranchers to urge their senators to come together and support the Farm Workforce Modernization Act.

"We definitely need to have bipartisan consensus about how to move forward with the H-2A guest worker program," Bier said.  "Without that consensus, we're going to continue to see higher prices being imposed through government inaction and a failure to create a modern guest worker program that works for the entire country.”
And the H-2A program is expanding. H-2A wages may reach more than 29% of all farm labor costs in the United States, compared to less than one percent ten years ago, increasing the need for the Farm Workforce Modernization Act.

"And so, as this program expands, the importance of legislation to address some of these problems will only increase over time. And more and more farms are resorting to using this H-2A program despite all of the cost problems and regulatory requirements because the labor shortage in the farm sector has just become so severe that they really have no other option.”

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