A federal court in Louisiana vacated the U.S. Department of Labor’s 2023 Adverse Effect Wage Rate (AEWR) Methodology rule, which organizations in the specialty crop industry say will bring stability to agricultural employers.
This rule incorporated wage data from the Occupational Employment and Wage Statistics to set wages for non-range agricultural occupations.
“For the disaggregated wages — for those individual jobs that were done on farms for generations that like driving a truck from the field to the packing shed, constructing a corral on a farm for maintenance of livestock, driving other workers from the housing to the worksite — those disaggregated wages for which the employer had to search out for an individual state of jurisdiction and a separate wage rate to determine what to pay those workers is eliminated,” says Michael Marsh, president of the National Council of Agricultural Employers.
Marsh says this ruling essentially scales back the wage rate to a 2010 rule, which maintains Farm Labor Survey generates AEWR for workers. However, he points out that NCAE is among the litigants of a case in the District Court in Florida about the use of the FLS in configuring AEWR.
Marsh says the other troubling part of using OEWS data is that the FLS picked up those figures, which also inflated the FLS’s AEWR figures.
“This is a big deal,” Marsh says. “We’re very, very happy. However, at the same time, it doesn’t resolve the bigger issue, where the other 92% of the wages are generated from, which is from the Farm Labor Survey, which is a wage rate that doesn’t exist anywhere in the world except in this program.”
Marsh says that when the previous administration published the rule in 2023, the Department of Labor estimated the OEWS data would impact about 1.8% of all H-2A petitions and would cost about $375 million spread over 10 years. However, he says it ended up being closer to 8% and costing growers about $1.4 billion in additional pay over 10 years.
“The market needs to determine what range of wage rates should be, rather than a government mandate,” he says. “And markets will take care of themselves. They’ll determine exactly what those wages should be if you let markets work. For the farmer growing strawberries, the market is going to tell the farmer what they’re going to get paid for the strawberries, versus the government telling the market what they’re going to pay for the strawberries.”
Marsh says the suspension of the enforcement of the Farmworker Protection Final Rule also helps growers get back into balance as costs of labor continue to rise, along with the vacating of the OEWS data to set AEWR.
“This gets us down the road,” he says. “It helps to significant extent, it’s a big deal that these that $1.4 billion in additional pay for only 10 years from the farmers transferred to workers will go away, but at the same time, we’ve got to figure out a way to reconnect our wage rates generated right now, being generated by our labor survey, to the marketplace, so that we can bring competitiveness back to American farmers and ranchers.”
He says it’s critical for wages to fall in line with other countries, where lower wages outside the U.S. can drive out American production but also cause disproportional reliance on imports.
“As long as the FLS is still used to turn wage rates, that’s going to continue to jeopardize the ability of the family farm to stay in the family, and that’s the way most of agriculture is because our foreign competition is just beating the pants off of us. And it’s not just Mexico and Canada,” Marsh says. “We’ve lost our asparagus production to Mexico and Peru, and it’s just cheaper to produce it there and bring it in, cheaper than we can produce it here.”
Marsh says there’s still work to do with the FLS, but he says this ruling out of Louisiana is a step in the right direction.
“We’ve got more to do,” he says. “We’re hopeful that we can get the administration to the point where we can settle the rest of these claims with regard to the Farm Labor Survey piece in the litigation in Florida.”
