The growing momentum of the campaign to raise the minimum wage to $15 per hour presents those of us who are farming with a serious challenge. Most of us pay significantly less than that to our farmworkers. Many of us do not even earn $15 an hour ourselves, as owner-workers.
The minimum wage campaign was successful in a few cities at first, notably achieving various phased-in raises culminating in $15 per hour a few years hence in the municipalities of Seattle, New York, Buffalo, Syracuse, Los Angeles, San Francisco and Portland. Last year the states of New York and California joined the march to $15, with thirty more plus Washington DC raising their minimum wages significantly. The city raises were often targeted at restaurant and food service workers, having little impact on farms. The state raises, however, are a different story. In some states agricultural workers are not exempt from state minimums, in others they are but the reality of all other traditionally low wage work escalating to $15 an hour in a few years may make workers reluctant to take jobs on farms which pay so much less.
As Frank Gasperini, executive vice president of the National Council of Agricultural Employers says, “For agriculture, one of our real differences if the country goes that way is that exemptions really don’t do us much good because we’re competing in the marketplace with jobs that will be paying $15 an hour.”
But farms, as opposed to food service establishments that exist in a local marketplace, often sell their products at a distance and even abroad, having to compete with prices from competitors paying significantly less for labor.
New York Assemblyman Bill Nojay, R-Pittsford, is a strong critic of raising the minimum, believing that it will cost upstate New York 200,000 jobs. He says New York farmers are already paying an average of $12.40 per hour for workers, which is about $5 more than Pennsylvania, $4 more than New Jersey and Ohio, and over $2 more than farmers in California.
Dean Norton, New York Farm Bureau president, says: “People aren’t really looking at our competitiveness. Many of our members tell us they will be forced to make tough choices…like reducing staff, changing what they grow and how they grow it, or just leaving farming altogether.”
Farm Credit East conducted a study to estimate the impact of New York’s minimum wage rate changes on the state’s farm economy. They came up with increases in labor costs between $287 and $622 million by 2012. “Because New York farm businesses deal in global and national markets,” it says, “and are generally unable to pass costs to consumers, the increase in labor costs is likely to reduce net farm income between 31.8% and 51.1%. We anticipate that this increase, without a significant change in farm economic conditions, will place between 1,365 and 1,995 profitable farms in a loss situation.”
Supporters of the higher wage, however, argue that over 200,000 workers in the Finger Lakes region of New York, who currently earn $9 an hour, and 6 million Californians who currently earn $10 an hour, will have more money to spend in the local economy. And, they believe, higher labor costs will not necessarily drive up food prices commensurately.
Philip Martin, professor emeritus at the University of California at Davis, says: “The fact is that most of what people spend on food is not for the labor intensive parts of food. They spend it on milk and cheese and meat and bread and things like that. And the labor costs there are much less than they are in strawberries, or fresh peaches.”
Besides, point out wage increase supporters, farm profits have increased more rapidly than wages. In 1974 California farm employers reported an average cost of $2.60 per hour for workers. That would be the equivalent of $12.49 per hour in 2014. But reported hourly wages in 2015 were in fact only $11.75.
Many observers have noted that in many instances even $15 an hour may not be adequate for a real living wage. In many parts of California, because of high rents, more is required. A study by the Alliance for a Just Society completed in late 2015 found that single adults in the Golden State need to earn $19.39 to cover basic living costs. With dependents, those costs increase. The accompanying graphic illustrates a MIT Living Wage Calculator estimate for what would constitute a living wage in various counties of California in 2022. For an adult with one child in Sacramento, the number is $26.93 per hour, or $56,000 per year.
Some farmers feel that the Living Wage movement can be an opportunity for farms to achieve higher prices. They believe we should ally with farm and food service workers to make the case for economic justice for all of us involved in feeding America. Given that 84% of existing farms are in debt, that the USDA calculates farm incomes are dropping significantly, and that fewer organic farms and organic acreage exists in America than existed 7 years ago perhaps, these folks reason, our future would be brighter if we joined forces with a movement which is making economic and political gains. In this issue we explore that idea.
