State Labor Regulations and Labor-Intensive Agriculture

The state of U.S. agricultural production is changing. Over the next decade, increases to minimum wage and other changing labor regulations will have a dramatic impact on fruit, vegetable and other labor-intensive agricultural production in the U.S. These impacts will be on top of evolving immigration policies and trends, which have been receiving a lot of attention in mainstream media  as well as farm media in recent months. Many of these changes will undoubtedly be welcome to farmworkers and their families. This has been extensively discussed elsewhere, as well as the ongoing debate over what is an "appropriate" minimum wage. Here we consider the implications for agricultural production and farm management, which we believe will be substantial. While immigration is generally a national issue, many labor laws are set at the state level. Most U.S. fruit and vegetable production takes place in states that have significantly raised minimum wages in the last decade and plan further increases into the 2020s. Several of these states are also considering or have already mandated new benefits for farmworkers, such as sick leave and overtime. Many fruit and vegetable farmers, as well as other farms that rely on non-family labor, such as dairy farms, will need to reduce their labor use, increase productivity or take other measures, such as finding new markets, to remain viable. Farmers in the top 10 fruit- and vegetable-producing states (Figure 1) in the U.S. saw the minimum wage increase from 11% to 45% between 2008 and 2017. This range reflects important differences between these states, which we divide into "low-wage" and "high-wage" groups. The five "low-wage" states use either the federal minimum wage or a state minimum adjusted for inflation. The five states in the "high-wage" group have current minimum wages at or above $9 per hour and have committed to future increases. California, by far the largest fruit and vegetable producer in the U.S., will raise its minimum wage to $15 by 2023 and has also mandated overtime for farm workers. Washington ($13.50 by 2021) Oregon ($13.50 by 2022), New York ($12.50 by 2021), and Arizona ($12 by 2020) also plan to raise the minimum wage. Combined, the high-wage group represents more than two-thirds of U.S. fruit and vegetable production; California alone is 55% of production value (Figure 2).