In recent years, foreign-born labor has proved to be a major component of American agriculture (USDA ERS, 2016a). In production agriculture, there is a need for ready supply of seasonal and year-round labor in the industry across all of America. Many states are taking action to study the impact of these labor forces on their individual agricultural industries. Researchers in California, where foreign-born workers occupy a majority of all agriculture positions, have improved research in recent years. They are continually analyzing the impact of foreign-born laborers on not only their agriculture industry, but also their state as a whole (AQUIRRE INTERTIONAL, 2005).
Studies in recent years have shown that foreign-born labor makes up a majority of all those peoples employed in production agriculture across the country. This is due in part to the labor-intensive nature of the vegetable, fruit, and livestock sectors compromising the agriculture industry. While farmworkers tend to make up less than one percent of all hired workers in the United States, they are vital to the success of the economy of the United States (USDA ERS, 2016b). Research has shown that twenty-eight percent of all farm laborers in 2013-2014 were U-S born, further proving the importance and impact that foreign-born laborers have. The remaining seventy-two percent of workers prove to have impacts on not only the industry, but also the local economies and the country as a whole (HERNANDEZ, GABBARD, & CARROLL, 2016). This research paper will explore those impacts among others connected with the productivity and importance of foreign-born laborers to the agriculture industry.
After examining the amount of foreign-born laborers employed, it is important to examine their impact on the agriculture industry, the economy, and other socioeconomic areas.
The specific objectives of this research paper will be
• To discuss all forms of foreign-born laborers including authorized, unauthorized, and contracted employees,
• To evaluate past and current immigration policies and their effect on agriculture,
• To view differences in wages and salaries in the industry with respect to legal status, and
• To discuss the socioeconomic impact of foreign-born laborers and their families with respect to school systems, health systems, and job markets in rural America.
Literature review
I. CLASSIFICATION OF FOREIGN-BORN LABORERS
There are several classifications of foreign-born workers that are important to analyze when considering the agriculture sector. The term “migrant”, for instance, varies across different governmental agencies and programs. The National Agricultural Workforce Survey (NAWS) defines a “migrant” as any person who travels at least 75 miles during the calendar year to seek employment in agriculture. This is further classified into categories of international and domestic migrants. In 2001-2002, international migrants made up 16% of all hired farm labor. Again, this categorization can be further classified between “shuttle” and “follow-the-crop (FTC)” depending on the nature and how often these international immigrants move during a calendar year. Domestic migrants are those persons who have not left the United States in the last 12 months but still seek agricultural employment (DEPARTMENT OF LABOR, 2005).
There are, however, more terms to consider when looking at status of foreign-born laborers. Unauthorized workers are those who do not have proper or supporting paperwork to be legally employed in the United States. Authorized employees are the opposite, as they have completed all proper processes to be legally employed in the United States. H2A workers are also a form of “authorized” employees who enter the country on a form of agricultural work visa, only to return at the completion of a growing season. They make up less than five percent of hired farm labor and are usually paid higher wages (USDA ERS, 2016b). In North Carolina, for instance, studies have found that only 26% of foreign-born individuals were US Citizens, with almost 45% being classified as “unauthorized” (ZOTA, 2008). In the United States as a whole in the fiscal years 2013-2014, it was reported that 32% of agricultural laborers were U.S. citizens, 21% were legal permanent residents, 1% were authorized to work under some other program, while 46% of all farm laborers were unauthorized (HERNANDEZ, GABBARD, & CARROLL, 2016).
II. PROGRAMS
There have been several programs and reform enacted throughout history to attempt to address the needs of agricultural employers and employees alike. In the early 1960’s there was a push to reform the US immigration policy. In 1965, the Immigration and Naturalization Act was enacted. This act provided “preferences” to be made according to various categories and classifications, such as relatives of citizens or individuals with skills that were useful to the United States. This changed the face of America and by the 20th century, 4.3 million immigrants had come to the U.S. from Mexico. This act affected agriculture, as the sector became more reliant on those foreign-born laborers who were willing to work the labor-intensive jobs that were open (HISTORY.COM STAFF, 2010). This massive influx of immigrants, however, caused for political debate and led to the passage of additional acts. Years later, in November of 1986, the Immigration Reform and Control Act was passed that allowed for some 1.1 million workers to become legalized (MARTIN & TAYLOR, 2013). This was done in efforts to control and discourage illegal immigration in to the United States. Some of the major implications of this act included the legalization of undocumented workers who had been in the country since 1982 and had been “continuously unlawfully present’. It also provided the legalization of certain agricultural workers and placed sanctions for employers who knowingly hired undocumented workers, increasing enforcement at the U.S. borders (US CITIZENSHIP AND IMMIGRATION SERVICES, 2010). This act affected the agricultural in many ways. As stated above, it provided legalization to many agricultural workers that were in the country illegally at the time of the act’s passage. This benefited the industry as employees and employers alike were given a sense of stability in fulfilling and keeping fulfilled those jobs that had been currently occupied by undocumented workers. This also put a stress on agribusinesses, especially in later years when undocumented workers continued to enter the country and seek employment.
III. REFORM
Industry experts have analyzed that without immigration reform, the industry as a whole may stall in growth. Between 2000 and 2012, the consumption of produce rose approximately 10.5 percent, yet the US agriculture industry only increased production by 1.4% due in part to labor restrictions (MCDANIEL, 2015). Growers are becoming increasingly concerned with the cost and availability of workers. Industries such as strawberries are facing challenged with labor and the fact that their harvest cannot be easily mechanized (CALVIN & MARTIN, 2010b). Labor costs account for almost half of total variable costs for production of fruits and vegetables. Some growers fear that stricter regulations may lead to a reduction in labor force, as well as increased variable costs (CALVIN & MARTIN, 2010a). Still, many growers are seeking reform and legislation to ensure a steady, legal supply of workers to cope with the growing demand of fresh produce in the United States.
IV. WAGES
Over the years, as a result of reform and general immigration, wage rates have seen a steady rise. In 2012, the average wage of a hired farmworker reached $10,80/hour, which was a 19% increase from 1990 (USDA ERS, 2016b). According to the Farm Labor Survey, labor expenses account for approximately 17% of all total variable farm costs, and in some cases account for closer to 40% of variable farm costs in more labor-intensive commodities (USDA ERS, 2016a). In 2007, it was reported that vegetable and melon farms spent approximately $2.2 billion in labor alone (USDA NASS, 2007). Wages can vary greatly depending on the type of work being performed. A survey in 2011 recorded that a first-line supervisor made an average hourly wage of $21.97, while basic farm laborers in the crop and nursery industries made, on average, $9.62/hour (USDA ERS, 2016a). More research conducted between 2007 and 2009 shows that there was also a difference in pay based on legal status. In 2007-2009 authorized foreign-born laborers made on average $9.82/hour, yet during this time, their unauthorized counterparts made on average $7.87/hour (MARTIN & TAYLOR, 2013). With wages that rise yearly, there was research conducted to determine the long-term effects on the industry if labor wages continue to rise. It was noted that if wages experienced a 20% increase, the incremental labor cost would double. This would put stress on smaller, less commercialized agricultural operations and large agribusinesses alike (RUARK, 2011). It is important to realize the effects that these workers have on the industry and how their status and wage affect the already narrowly thin profit margins of the agriculture sector.
V. SOCIOECONOMIC IMPACT
While it is evident that these workers affect and contribute to the agricultural industry, it is important to understand their effects on other parts of the socioeconomic scale. Studies have shown that workers are not coming alone, and a majority, fifty-two percent, of all foreign-born laborers surveyed in 2012 claimed to be parents (NCFH, 2012). In North Carolina, this foreign-born population has effects on school systems throughout the state. In 2004, the state costs of K-12 education for foreign-born students were approximately $467 million. In more rural, agriculture-reliant counties such as Sampson and Duplin, foreign-born students compromised 19.2% and 23.2% of the student populations, respectively (ZOTA, 2008). Studies have also been conducted to look at foreign-born laborers and the health system in the United States. Only 36% of employees surveyed reported that they were being covered by unemployment insurance, where an additional 54% did not know their status of coverage. With around 23% of families living below the poverty line, it is not surprising that that 43% of the farmworkers said that someone in their household, including him or herself, had used need-based assistance in the last two years (NCFH, 2012). Further studies in North Carolina have looked at other impact of the foreign-born laborers in state economies. In 2004, all immigrants regardless of status contributed around $756 million in taxes, while their education, medical, and correctional costs reached $817 million. This, however, did not include the impact of consumer spending which researchers say has an impact of approximately 9.2 billion on the state economy (ZOTA, 2008).
While many individuals tend to argue the fact that foreign-born workers take away jobs from Americans, the opposite is actually true. Academic research provides very little support to the claim that the surge of immigrants since 1970 has led to slower wage growth for native-born workers. The actual evidence shows that when there is a presence of immigrants, this increases the labor supply. This increased supply in turn encourages firms to increase investment to offset any reduction in capital per worker. This actually keeps the average wage from fallowing over the long-term. It is also often that foreign-born workers do not compete for the same jobs as do the native-born peoples. These jobs, such as manual labor in the agriculture field, are not jobs that native-born people are attempting to secure. These workers are then spending their wages on homes, food, and other goods and services in areas in which they live. This leads to increased demand, and in turn, generates more jobs to meet these demands. This research proves the value of foreign-born workers to many rural areas of America (THE PENN WHARTON BUDGET MODEL, 2016).
It is apparent that there are many impacts to the agriculture industry, individual state economies, and the United States as a whole through the use of foreign-born farmworkers. The remainder of this research will continue exploring these impacts.
Methodology
Data presented in this research is collected from United States Department of Agriculture: Economics, Statistics, and Market Information, as well as United States Department of Agriculture: National Agricultural Statistics Service. Additional data was collected from reports generated by the United States Census Bureau. The data studied includes wage rates, farm expenditures, age, migrant type, and authorization status, and number of foreign-born workers and their legal status.
In this study, a multiple regression analysis will be used along with multiple descriptive analyses to study the impact of these foreign born laborers onto produce farm production as a whole. Thus, the empirical model of the regression analysis is Y=f(X1, X2, X3,……). Y is considered production; where-as f is the function of multiple inputs. These inputs, or variables, may include wage rates for agricultural laborers, taxes, labor (as a whole), agricultural chemicals, fuel, tractors and self-propelled machinery, and the number of workers in the field who are classified as foreign-born. A second analysis will be completed using variables of legal status including authorized, unauthorized, foreign-born and U.S. born laborers, as well as, an examination of current legal status of farm laborers. Other descriptive analyses will also be completed and will be further explained in a latter portion of this research paper.
Many of these variables were chosen because they are direct expenditures in agriculture production. Research has shows that foreign-born workers play an integral role in the production processes of American agriculture (USDA ERS, 2016a). It is important for the purpose of this research paper, to examine the number of workers in the industry, as well as their legal status to understand their true impact.
RESULTS AND DISCUSSIONS
DESCRIPTIVE ANALYSIS
Figure 1. California Farm Workers-Birthplace. This figure illustrates the breakdown of California farm workers by birthplace.
This figure shows the rise and then slight decrease of foreign-born workers in the California agricultural sector. While foreign-born workers are the primary majority of all farm workers in California, it is important to note that there has been an increase in the last seven years of U.S-born workers. This may be attributed to the fact that with more and more workers entering the United States and starting families, their children are considered “U.S. Born” and may be choosing to work in the industry.
Figure 2. California Farm Workers-Legal Status. This figure represents the percentages of workers based on legal status classification.
This chart shows the overall increase of unauthorized workers in California’s agricultural sector. It also shows the sharp decline of authorized workers at the turn of the century. Evidence from this data suggests that the percentages are becoming more similar, with the ratios slowly climbing towards 50/50 as the years progress and means for workers to become authorized are being made available.
Figure 3. Current Employer Provides/Pays For Health Care. This chart demonstrates the percentages of employees who are provided health care by their employer.
This chart displays the percentage of farmworkers who currently receive insurance from their employer. On average, a majority of workers are not provided with insurance from employers while less than a quarter of workers across all years are actually provided with coverage. There are also many workers who are not aware of their coverage status. These low averages of covered workers can have an effect on the health systems in the areas in which they are living. These workers are likely to receive government assistance with health care and the following chart goes into more detail regarding those who are covered by other means.
Figure 4. Share of Farmworkers Who Have Health Insurance. This chart demonstrates how many farmworkers are receiving health insurance.
This chart demonstrates the percentage of farm workers that have health insurance. These totals represent the workers who have health insurance through a variety of ways including employer provided insurance, government provided insurance, spouse provided insurance, or self-paid insurance. As compared to the previous chart, showing totals of insurance provided by employers, one can gather that there is a distinct difference in the number insured by outside sources as compared to employer provided.
Figure 5. Family Composition. This figure shows percentages of those worker who are classified based on various family composition factors.
This chart demonstrates the family composition of agricultural workers in California. This information demonstrates that there is a significant amount of workers who are in the industry which are married parents. When considering this, it is apparent that these workers’ families will have impacts on local areas, more specifically the school systems. With an influx of foreign-born students, many school systems are affected in a variety of ways that have been mentioned previously in this work.
REGRESSION ANALYSIS
Upon examination of this regression analysis, one will note that there are two significant variables when considering the impact on total farm receipts. Rent recorded during the time period 1980 to 2012 has proven to have an impact on total farm receipts. If rent increases by one unit, it is estimated that total receipts will increase by 13,469.0168. On the other hand, foreign-born workers also have an impact on total farm receipts. Based on this regression, it is estimated that if workers increase by one, then total farm receipts will decrease by 192832.3697. This may be due in part to the increase in wages from the hiring of more workers. While the researcher would hope to see a positive increase in total receipts, the decrease my come in part to the increased costs associated with the hiring of foreign-born workers. In 2007-2009 authorized foreign-born laborers made on average $9.82/hour, yet during this time, their unauthorized counterparts made on average $7.87/hour (MARTIN & TAYLOR, 2013). Figure 2 above demonstrates that the numbers of authorized and unauthorized workers are beginning to even out, with decreases in unauthorized and increases in authorized. If considering this data, these increased labor costs of authorized foreign-born workers may account for the decrease in total receipts suggested in the regression analysis.
CONCLUSIONS, SUGGESTIONS, & LIMITATIONS
There have been many changes in the agriculture industry over the years, with one of them being the expanded use of foreign-born workers. These workers have proven to have an impact on the agricultural industry as a whole by having significant impacts on the total farm receipts as show in the regression analysis preformed above. These workers impact our industry, our communities, and our nation. The regression analysis proves that these foreign-born workers do have a direct impact on the total farm receipts of American agriculture.
Based on this research, it is evident that there are several kinds of classifications of foreign-born workers. They have been discussed previously in this work and they do make a difference in the analysis of the data by forcing the researcher to differentiate between “authorized” and “unauthorized”. Research has also shown that over the years studied, that there has been an increase in “unauthorized” workers, which as discussed in the literature review, can have impacts on wages and policy for the agriculture industry. The researcher found that these workers do have an impact on socioeconomic factors of an area. With a majority of workers classified as “parent” in all time periods studied, this means that workers may be bringing their children into the areas in which they work. These children impact school systems in a variety of ways, which were discussed in the earlier literature review. Further research has proven that there are also large numbers of workers who are receiving, or have had family members receive, government assistance for health care. This impacts the health system in local areas, as well as the government programs which provide this assistance. These workers do help improve the job market for the agriculture industry and beyond and have proven to have impacts on local economies based on buying power. The main objective of this research was to determine if these workers had significant impact on the industry in its entirety. The researcher feels that this determination was made based on the regression analysis completed in this work. They have proven to have an impact on the receipts of agriculture, and therefore and impact on the success of the industry.
The use of foreign-born workers in the agriculture industry is not one to be ignored. Based on the research done for this project, it is evident that they do indeed have an impact. It is important to see how, on an individual basis, these workers affect the day-to-day operations of agribusinesses across America. This research proves that they affect all facets of our nation including health care and school systems, as well as the economy and the agricultural industry. It is suggested by the researcher to do a more in-depth analysis on the impact of foreign workers on an individual farm basis. It would be interesting to see the impact that just one foreign-born worker could have on a small family operation by increasing productivity and providing more ability for the expansion of operations.
Despite the research completed by various groups on foreign-born labor, there were several limitations. There was extensive research done on the topic of foreign-born labor completed by the National Agriculture Workers Survey and the National Agricultural Statistics Survey, however data for the particular number of foreign-born workers on farms had not been calculated. After research and gathering data from multiple data sources, the number of foreign-born workers could be calculated. These numbers were estimates and were based on percentages presented by NAWS and NASS as compared to statistics from the Bureau of Labor Statistics. These data limitations were overcome by analyzing data from various sources and careful calculations. Data of this exact type, as well as an analysis of this exact type, is not well published, if published at all. The data was, at times, difficult to gather and analyze based on the limited availability, but with time and focus, the data was collected and constructed in a way appropriate for analyzing.
Foreign-born labor can and will continue to make a difference in America’s agricultural industry. Their impact is proven through research such as this and they are proven to play an integral role in our industry and our nation as a whole. Their importance should not be overlooked, nor should their impact to community, industry, and economy.