IRVINE, Calif., (December 5, 2016) -- Following enactment of California’s minimum wage (SB 3) and agricultural overtime (AB 1066) laws earlier this year, Western Growers conducted a survey of its California members to capture the business decisions they are now planning and the impact on farmworkers and farm businesses. The results of our survey reveal that, taken together, sharply higher minimum wage and agricultural overtime costs will harm the very people that supporters of these measures claimed to be helping: farmworkers.
Labor costs represent the largest portion of operating costs for California growers of fruit and vegetable crops, which will dramatically increase under SB 3 and AB 1066. Our survey confirms that these increases in operating costs cannot be passed on to retail and grocery chains. California fresh produce farmers are price-takers and compete in a global marketplace. Simple economics dictate that if our prices are too high, our buyers will go elsewhere.
Consequently, to maintain profitability while remaining competitive vis-à-vis growers in other states and countries, our farmers must control costs, and must focus on their biggest line item. Our survey indicates that California farmers will seek to contain their labor costs in a number of ways, including by reducing California production, shifting to less labor-intensive crops and mechanization. Each of these options either reduces farmworker hours and wages or eliminates jobs entirely.
Furthermore, in an effort to control labor costs and remain competitive, many California fresh produce farmers will be forced reevaluate the range of employee benefits many provide to their farmworkers, including requiring employees to contribute more to their healthcare coverage, reducing vacation days and/or reducing company-paid contributions to 401(k) and other retirement accounts.
Ultimately, our survey demonstrates that California’s minimum wage and agricultural overtime laws will disproportionately hurt farmworkers, their families and the rural communities in which they live, while reducing the number of entry-level and skilled jobs for immigrants seeking to take the first step on the “American Economic Ladder.”
The findings in this report come from an electronic survey of Western Growers’ regular members conducted by the association between October 31st and November 11th, 2016. 148 Western Growers members responded to the survey, nearly 18 percent of the total regular membership of the association.
About Western Growers:
Founded in 1926, Western Growers represents local and regional family farmers growing fresh produce in Arizona, California and Colorado. Our members and their workers provide half the nation's fresh fruits, vegetables and tree nuts, including nearly half of America's fresh organic produce. For generations we have provided variety and healthy choices to consumers. Connect with and learn more about Western Growers on our Twitter and Facebook.