The U.S. farm labor supply is shrinking and agricultural wages are rising. Hertz and Zahniser (2013) document increasing occurrences of farm labor shortages between 2007 and 2011. Fan et al. (2015) find that farm labor migration within the United States has diminished since the 1990s, due to both demographic changes in the agricultural workforce and structural changes in the economy. Charlton and Taylor (2016) find that rural Mexico, the primary source of labor to U.S. farms, is transitioning out of farm work into other industries. Furthermore, net migration from Mexico to the United States has been negative since 2010 (Passel et al., 2012). The annual non-metro population in the United States decreased by an average of 43,000 residents per year between 2011 and 2016 and by 21,000 in 2016, suggesting that the overall U.S. rural labor supply is simultaneously shrinking (USDA, ERS).
Meanwhile, U.S. farm wages are rising. Figure 1 illustrates the growth in real farm wages between 1989 and 2016, and figure 2 shows that farm wages in Montana are growing even faster than the national average (state-level wage data are available only 1995-2010).
Figure 1. U.S. Farm Wage Growth
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(Source: National Agricultural Statistics Service)
Figure 2. Montana and National Farm Wage Growth
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(Source: National Agricultural Statistics Service)
One observable response to the decreasing farm labor supply is increased employer demand for foreign guest workers through the H-2A non-immigrant agricultural guest worker visa program despite contentions that the program’s regulations are costly and inefficient. Employers must contract the employment dates in advance, obtain permissions from multiple government agencies, guarantee a minimum number of hours, provide housing for workers, and fund transport to and from the United States. The employer must first submit a job offer with the State Workforce Agency (SWA) sixty to seventy-five days before the specified employment start date. The employer must demonstrate that no qualified U.S. workers are available, willing, and able to take the job and that foreign workers will not adversely impact wages of similarly employed domestic workers. If the job is accepted by the SWA, the employer must file for a temporary labor certification for H-2A workers from the U.S. Department of Labor and then file an I-129 form to the U.S. Citizenship and Immigration Services. Lastly, prospective workers apply for the visa from outside the United States or apply for admission under the H-2A classification at a port of entry (US Department of Labor).
Conversations with H-2A consultants in Montana and throughout the country indicate that employers turn to the H-2A program as a last resort; yet, demand for H-2A workers increased by 180 percent between 2006 and 2016. Figure 3 shows the number of certified H-2A workers in Montana, North Dakota, South Dakota, and Wyoming over the past ten years. All states except Wyoming show increased demand for H-2A workers. Data indicate that H-2A workers have been hired as ranch hands, equipment operators, managers, and other positions. As the farm labor supply shrinks, demand for H-2A workers will likely continue growing, and methods of improving the efficiency of the program’s use will become more critical to agricultural production.
Figure 3. Growth in Demand for H-2A Agricultural Foreign Guest Workers in the Northern Great Plains
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(Source: U.S. Department of Labor, Employment and Training Administration, Office of Foreign Labor Certification)
