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By Don Jenkins, Capital Press

The U.S. Department of Labor will cut minimum wages for foreign seasonal farmworkers, arguing farmers can no longer bear escalating labor costs.  

A rule set to take effect immediately will count housing as compensation for farmworkers in the U.S. under the H-2A program. The rule also will revise how H-2A wages are calculated, slightly rolling back current wages in most states and likely slowing wage growth.  

The 166-page rule was scheduled to be printed Oct. 2 in the Federal Register. High labor costs are making U.S. farmers uncompetitive with foreign producers, according to the rule.

The Labor Department also linked the wage rule to increased enforcement of immigration laws. Farmers need foreign workers because unemployed or underemployed U.S. residents won’t fill farm jobs left vacant by forced or voluntary deportations, according to the department.  

The public and farmworkers have an interest in preserving farms, the department said. “Without swift action, agricultural employers will be unable to maintain operations, and the nation’s food supply will be at risk,” the rule states.  

Worker and Farmer Labor Association CEO Enrique Gastelum estimated the new rule will slice the cost of employing and housing an H-2A worker in Washington by 19%. H-2A workers filled more than 35,000 farm jobs in Washington last year.  

A half dozen growers already have called him and said the rule was a game-changer, Gastelum said. “People are so strapped for cash in the industry,” he said. “It gives people breathing room.”  

The Labor Department sets minimum H-2A wages for each state to prevent foreign workers from undercutting pay for U.S. workers. In states with a high number of foreign guest workers, such as Washington and California, the H-2A wage becomes the de facto minimum wage for other farmworkers.  

The Biden administration adopted a wage rule in 2023 that farm groups claimed artificially inflated farm wages. U.S. District Court rulings battered the Biden rule, forcing the Trump administration to either fall back to an older wage-setting rule or adopt a new one.

Even the older rule made H-2A wages unreasonably high, the Labor Department said. Hourly H-2A wages were partly determined by a pay survey that included overtime and bonuses. H-2A wages have been rising faster than wages for non-farm private-sector jobs, according to the department.  

From now on, wages will be based on a Bureau of Labor Statistics’ survey of hourly wages, the department said.  

The Labor Department’s assessment echoed comments long made by the National Council of Agricultural Employers.  

“I think they’re right. We’re losing farms at an accelerated pace,” council CEO Michael Marsh said. “One of the biggest reasons has been a wage rate disconnected from the market.”  

The new rule also introduces lower hourly wages for entry-level foreign farmworkers. Housing compensation will be set state-by-state based on housing cost surveys.  

The Biden administration took the position that housing foreign farmworkers was a business cost and should not be taken out of farmworkers’ wages.  

The H-2A hourly wage in Washington for an experienced foreign farmworker will drop to $19 from $19.82. When housing is counted as compensation, the wage will be $17.33 an hour. The wage can’t go below the state’s minimum wage, which next year will be $17.13.  

The comparable hourly wage in Oregon will go to $17.62 from $19.82. In California, the wage will go to $18.71 from $19.97. In Idaho, the wage will go up to $17.07 from $16.83.  

While the wage rule might allow farmers to hire more H-2A farmworkers, Congress should still provide farmworkers with a path to gaining legal status, he said. “The rule is a step in the right direction, but we need Congress to do its job.”