Farm Bureau: Outside forces already drive our cost of labor well above minimum wage

By Anjalee Khemlani
New Jersey | Dec 14, 2018 at 7:15 am

The idea of delaying a $15 minimum wage for farm workers has been a topic of debate among politicians and “fight for $15” advocates in recent days.

Ed Wengryn, research associate at the New Jersey Farm Bureau, explained why that group feels such a delay is fair.

The main reason: Farm workers are awarded so many perks now that their hourly wage (already above minimum wage, the NJFB said) is just part of their compensation.

Wengryn said many in the industry need to bring in workers from outside of the state. Because of that, he said, travel, transportation and housing often also are taken care of. That includes airfare for those coming in from Puerto Rico or from other countries.

“If you’re using the foreign labor programs, you have to advertise the prevailing wage, which in New Jersey is more than $12,” Wengryn said. “You have to post the jobs locally, and, if nobody takes them, you can petition the federal government go get (guest) workers brought in. When you drive up the minimum wage, you drive up the prevailing wage they have to pay.”

The NJFB represents approximately 7,000 farms.

Overall, there are more than 9,000 farms in the state, contributing an estimated $1.1 billion in annual economic output, making New Jersey a Top 10 state for crops in the country.

Agriculture, in fact, is the state’s third-largest industry, which is just one of the reasons why Gov. Phil Murphy’s Agricultural Transition Advisory Committee spent significant time on the topic of a $15 minimum wage.

The NJFB is supporting a bill from Assembly Speaker Craig Coughlin (D-Woodbridge) — which raises the minimum wage to $15 by 2029 — because it feels farm workers are already earning more than $12 per hour in some cases, which is well above the $8.85 per hour minimum wage for 2019.

And the cost of labor, Wengryn said, also can include shuttles or other forms of transportation, so the workers can go shopping and do other necessary errands.

In addition, Wengryn said, farm worker pay can be a piece rate — which is based on pace. The faster the work is done, the higher the amount paid.

Most farm workers paid this way make between $9.10 and $9.50 per hour working piece rate, Wengryn said.

These farm workers tend to work multiple jobs, though likely some are on the same job site, and total about 50 to 60 hours per week during peak season.

“They’re getting a decent paycheck on a weekly basis,” Wengryn said.

What does that look like? A new farm worker can get $500 per week, while a seasoned one will make more than $600 per week, he said.

And to pay for all this, the farmers rely on unpredictable crop yields yearly.

For example, this year’s yield was low, according to Wengryn.

So, any normal costs that need to be covered are being done by eating into the margins, he said.

Meanwhile, the cost to operate for farmers is set entirely by the market and the industry, rather than by the individual farms, Wengryn said.

“Prices are set in a regional marketplace, and they are really driven by California, Florida, Texas and the South,” Wengryn said. “By the time our season comes into play, their seasons are full-blown or starting to tail off. So, we kind of fill in between growing seasons. Our farmers don’t get to set the price, the price has already been set.”

So, if the cost of production is “X,” the farmer doesn’t get to set a price that will recoup that amount. Especially because it is a competitive environment among the in-between season sellers, and supermarkets can easily go to another state for fruits and vegetables, Wengryn said.

Even in a market where the farmer sells directly to consumers, the consumers are price-shopping and will not buy after a certain price point.

“We as a country, not just in the state, have a cheap food policy that food is not something that people should not pay a lot for,” Wengryn said.

So, farmers face price and cost pressures, while also dealing with a costly labor pool.

It wasn’t always that way, Wengryn said.

“We used to have a big population that would follow the harvest,” he said. “They would start in Florida, come up through Georgia, through the Carolinas and then come to New Jersey (and then go to) New York. They would (pick) blueberries in New Jersey and then go pick apples in New York in the fall.

“With the unsettled national immigration infrastructure, those workers don’t move like that anymore. They’ve either settled here illegally — and not just here in New Jersey, they’re either in Florida, in the Carolinas. They have kind of become that underground community of people that we talk about. They don’t follow the crops anymore.”

Having as much uncertainty as farming does sometimes leads to a change in the industry.

“We view ourselves as an industry that doesn’t get to set its prices,” Wengryn said. “We can’t move our businesses, either. We can’t relocate or move to another state. The land is here. What can happen is what’s grown on the land can change.”

And it can change into what is likely to be low-labor and low-input agriculture, resulting in low-value crops.

Even with some of the agricultural subsidies that exist at the federal level, which are usually paid as emergency relief, absorbing extra costs is tough. Especially if the cost to produce increases by more than the farm can handle.

For example, a farmer that was growing Asian fruits and vegetables — where there is a decent demand — stopped growing them after the last price increase. The farmer saw his cost go up by $60,000 for one year and quit growing those fruits and vegetables, Wengryn said.

Instead, he now grows corn and soybean, which require far less, if any, labor.

“The 40 people who worked for him for the season, they don’t have jobs anymore,” Wengryn said.

Which is why the NJFB is supportive of the extended phase-in for farm workers, he said.

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Anjalee Khemlani | akhemlani@roi-nj.com | AnjKhem