Shortages of migrant workers in Calif. could hurt farmers, increase produce prices
- A shortage of migrant workers in California is causing crops to rot before they can be picked, according to Fortune. This has triggered losses, for example, of more than $13 million in two counties.
- Farmers report they are facing challenges hiring enough workers during the harvest season. The shortage is being blamed over ongoing battles about U.S. immigration policy.
- If the labor shortage affects farmers throughout the country, it could have a significant impact on prices consumers pay at the market. However, Fortune reports that drought and flooding have a more serious impact on farms than labor problems, and that low oil prices could offset the losses of available workers.
The food industry is concerned about U.S. immigration policies, and with good reason. Fifty-seven percent of the country’s agriculture workforce is undocumented, according to the U.S. Department of Labor. These workers earn low wages, which in turn keeps fresh produce prices down — a cycle that affects large and small farms alike.
This is not a new problem for farmers. Between 2009 and 2016, 3 million undocumented immigrants were deported from the U.S. There also has been a surge in the number of undocumented immigrant arrests in 2017. Immigrations and Customs Enforcement estimates that it has made more than 21,000 arrests from January 20th to March 13th this year.
Looking specifically at California, 9 out of 10 farm workers there are foreign born. The majority of those are coming from Mexico. However, more Mexicans are leaving the U.S. than coming into it. There has been a net loss of 140,000 Mexicans from 2009 to 2014, with family reunification listed as the top reason for their return home. If this trend continues and farmers continue to lose workers, fresh produce prices will continue to climb.
California grows more than 200 crops, some of which are not raised in other parts of the United States. It's the top producer of a number of commodities, including almonds, apricots, kiwi fruit, avocados, grapes, lemons, melons, peaches, plums, and strawberries.
The RAISE Act, introduced to the Senate in February of this year, could also affect immigration policy. The proposal would significantly reduce the number of people allowed to legally immigrate to the U.S., and would weigh each person’s age, education and ability to speak English, among other things.
Some farmers are attempting to offset the worker shortage by offering an hourly rate that exceeds the minimum wage, 401k plans and paid vacation and holiday time off. This could prove a successful — albeit expensive — way forward. This is already a tough time for the American farmer. According to the USDA’s Economic Research Service, national net farm income is estimated to be down nearly 9% from last year — the fourth consecutive year of declines.
Ultimately, a loss of available workers could lead to more expensive produce for consumers who want to buy fruits and vegetables grown in California and other parts of the country. Food and grocery companies may have to re-think the cost of hiring undocumented workers and consider if they could still turn a profit if they increased the wages they paid. This comes at a time when many grocery chains are cutting prices on produce to try to stay competitive.
If a lack of available labor continues to be a problem countrywide, expect companies to respond the way they have for decades: pass the increased cost of the product on to the consumer. It will be interesting to see how shoppers respond, and if purchasing behavior in the produce aisle shifts as a result of price hikes.