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H-2A wage increase may slow growth of guest worker program

By: Sean Ellis
Published in Blog on  April 05, 2019

By Sean Ellis

Idaho Farm Bureau Federation

POCATELLO – The growth in the number of U.S. farming operations that use the federal H-2A guest worker program slowed during the first quarter of 2019, a possible result of the average 6 percent increase in the federally mandated minimum wage ag operations must pay H-2A workers.

According to American Farm Bureau Federation, recently released federal data show that the number of certified H-2A positions nationally was up 10 percent during the first three months of 2019 compared with the same period in 2018.

That was the slowest increase in three years, according to AFBF Economist Veronica Nigh.

Use of the H-2A program has grown rapidly in recent years. A total of 85,248 positions were certified nationally in fiscal 2012 and that number grew to 242,762 in fiscal 2018.

In an AFBF Market Intel report, Nigh said that the slowdown in the growth of the program during the first quarter of 2019 seems “to indicate that the large increases in H-2A wages are starting to take a toll.”

The federal H-2A agricultural guest worker program allows agricultural producers who can’t find enough domestic workers to bring in foreign guest workers to fill jobs on a temporary or seasonal basis.

Besides paying for their housing and transportation to and from the United States, farm operations that use H-2A workers must pay them a minimum wage mandated by the federal government. This wage is known as the “adverse effect wage rate” and it differs by state.

The average AEWR nationwide increased 6 percent this year, to $12.96.

In Idaho, the rate increased 16 percent, to $13.48. Eight Western states saw increases ranging from 15-23 percent.

Whether the increase will impact the number of Idaho farming operations seeking H-2A workers this year is yet to be determined.

In Fiscal Year 2018 – Oct. 1 to Sept. 30 – the Idaho Department of Labor received 616 applications from agricultural operations seeking H-2A workers. That was a 7 percent increase from the 576 applications in fiscal 2017, which saw a 13 percent increase from the 509 applications received during fiscal 2016.

So far during fiscal 2019, IDL has received 578 applications.

According to Georgia Smith, a spokeswoman for the IDL, the department’s busy time for receiving H-2A applications is from mid-December to February. She said the department anticipates the number of H-2A applications it will receive during all of fiscal 2019 will come close to or possibly exceed 2018’s total but not by much.

Of the 578 applications IDL has received so far during fiscal 2019, only a handful have been withdrawn because of the H-2A wage increase, Smith said.

According to IDL data, a total of 5,367 H-2A positions were certified in Idaho in fiscal 2018, up from 4,615 in fiscal 2017.

According to IDL, 147 of the H-2A applications the department has received this year are from the Magic Valley area, 110 are from the Rexburg area and 97 are from the Mini-Cassia area (Minidoka and Cassia county).

 

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