Average Farm Labor Costs Increase 6% In Q1 2019
Farmers across the country continue to lament about increasing labor costs. Well, new data from the U.S. Department of Labor shows those anecdotes of increased wage costs are in fact true. The 2019 national average AEWR wage, a metric used to pay H2-A workers, is $12.96, up 6% from 2018.
“To put the 6%in context, the U.S. increase in average hourly earnings last year was 2.9%,” says Veronica Nigh an economist with the American Farm Bureau Federation.
The AEWR wage, also known as the adverse effect wage rate, is the regional weighted average hourly wage rate for field and livestock workers combined, as measured by USDA’s annual Farm Labor Survey of non-supervisory farm and ranch workers, according to Nigh.
“In eight states in the west -- Colorado, Nevada, Utah, Idaho, Montana, Wyoming, Arizona and New Mexico -- the 2019 AEWR wage rose by double-digits since 2018, with increases ranging from 15-23%,” she explains. “Only three states saw a decline in the AEWR – Missouri, Iowa and Florida. The rest grew between 2-9%.”
Farmers using the H-2A program must pay employees the higher of the federal or state minimum wage; the prevailing wage determined by the DOL, or the AEWR.
In 2019, the AEWR rate is higher than the prevailing minimum wage in every state, Nigh says. As a result, the AEWR wage rate is what H-2A employers are paying in 2019.
“The increase in the AEWR in 2019 follows a long trend of rising rates,” Nigh says. “Since 2012, the national average AEWR has climbed 25%, from $10.39 to $12.96.”