An onion field off of 76th Avenue Northeast on Friday, March 12, 2021. (Amanda Loman/Salem Reporter)
A recent economic report commissioned by the Oregon Farm Bureau said requiring overtime pay for agricultural workers would overwhelm farmers with higher costs and have mixed impacts on how much farmworkers take home.
The report comes as some Oregon legislators are again pushing to mandate overtime for agricultural workers during the 2022 session after a similar effort in 2021 died in committee.
The nonprofit Salem-based farm bureau asked Highland Economics, a Portland-based firm, to gather and analyze data about the potential impacts of mandating agricultural overtime. They sought the study after getting pushback from Oregon legislators who questioned the validity of employer concerns that requiring overtime pay would be detrimental to the industry, said Executive Vice President Dave Dillon.
Employers in Oregon are generally required to pay non-manager employees one and a half times their hourly pay when they work more than 40 hours per week, but most agricultural workers are exempt from those State Bureau of Labor and Industries rules.
The exemption is the subject of a pending legal challenge in the Oregon Court of Appeals. On Nov. 30, the Oregon Law Center filed a petition on behalf of Oregon farmworkers Javier Ceja and Anita Santiago and Salem nonprofit Mano a Mano Family Center to challenge the current BOLI rules that exclude agricultural workers from getting overtime pay.
Oregon has around 86,000 agricultural workers, more than 13,000 of whom are in Marion County, according to a 2018 state report. The vast majority are Hispanic.
According to the economic report, if overtime pay is mandated for agricultural workers, employers will reduce hours for existing farm workers and instead try to hire more laborers to reduce overtime pay. But two-thirds of those surveyed said it was unlikely they would be able to hire more employees due the current farmworker shortage.
The report also said mandated overtime would have mixed results in farmworker compensation. Some workers, particularly more skilled and higher paid workers such as equipment operators, would receive higher overall pay. Others would get the same pay for working fewer hours, or see a pay reduction if their hours or positions are cut. Raised wages may also result in some farmworkers getting less social assistance, the report said.
“The market is not willing to pay more for a pear or berry or head of broccoli that is picked in an employee’s 41st hour of work in a week than one picked in the 39th hour of the work week,” Dillon said in an email.
Dillon said if farmers or ranchers can’t afford to cover increased costs, their options are limited to relying on machinery and moving away from labor-intensive crops, lowering production, selling the operation or going out of business, and some farmworkers will lose jobs.
“A lot of farms and ranches will have to stop the work at 40 hours and say, ‘We can’t afford anything past 40 hours.’ So any of those hours that were worked before at the normal rate, those could be lost,” he said.
The report said cash costs for farms in all sectors on average would rise between 6% and 12%, and increased costs from mandated overtime and the lower profits it brings will likely cause some producers to go out of business and some overall reduction in agricultural production. The report said those same challenges may dissuade new operators from joining the farming industry.
Raised costs and reduced profits may also lead to more development of farmland, particularly in the Willamette Valley, Columbia Plateau and other agricultural areas of the state where land value for development is high, the report said.
Gordon Lafer, a professor at the University of Oregon’s Labor Education and Research Center, said the report’s findings don’t reflect what has been seen in California and Washington, which have both mandated agricultural overtime pay in recent years.
Highland Economics conducted a report for California in 2016 “that was very similar in its findings,” Lafer said. “All of the key findings have turned out to be wrong.”
Lafer said agricultural employment in California is up slightly since agricultural overtime was mandated as opposed to down, and labor costs have dropped slightly instead of spiking. “Some of that is probably because of the Covid recession, so you could say it went flat. But it was nothing like what they project,” he said.
Dillon pointed to a University of California, Davis survey of California farmworkers that found over half reported their hours were changed after overtime was implemented, and 40% said they felt more pressured at work.
The findings of Highland Economics’ report for Oregon drew from two surveys, one of 246 Oregon crop producers and the other of 56 livestock producers. The surveys were “not designed to be statistically representative,” the report said.
Lafer said predicting the impact of overtime wages would require holding constant other factors like crops produced and size of farms.
“We want to create a representative sample, but they didn’t do that. And when you don’t do that, it doesn’t mean it might be off by a little, it means you have no idea how much it’s off by. This would would be thrown out of court as junk science,” he said.
Before asking Highland Economics to conduct the report, Dillon said the farm bureau did its own internal survey of 544 members, all farm and ranch families, and 91% said they couldn’t absorb the costs of mandatory overtime pay. He said the effect of mandated overtime and annual minimum wage increases will bring pressure that will push people out of the industry.
“Whether that means bankruptcy – probably not in most cases, it’ll be expressed in some different way – but at the end of the day, you can’t say with any credibility that there won’t be a negative impact of imposing costs that the marketplace isn’t providing the revenue to cover,” Dillon said.
According to the report, around half of all surveyed operations said they had lost revenue due to labor shortages.
Lafer said to limit employees to 40 hours a week during harvest time, employers would have to hire a significant number of additional workers who aren’t there, “and who especially aren’t going to be there if Oregon is the only state on the west coast that doesn’t have overtime.”
“The only reason that farmworkers don’t have the same overtime rates as everybody else is because of racism in the 1930s,” Lafer said. To pass federal overtime rules, advocates ” had to get the votes of southern members of Congress who didn’t want Black workers in the cotton fields to have to have labor rights.”
“I don’t think I’m in a position to argue about the origins of some of these policies, and I would hope that we’re in a place where we have a higher value on equity based on race and other dimensions of identity than we did in the 1930s,” Dillon said. “Whatever the rationale was 100 years ago, what we’re talking about is the economic realities of 2022 and what is going to help family agriculture be viable in the state. That’s the only concern we have right now.”
A separate report released in December by Oregon Health & Science University found farmworkers who work long hours face greater risks than the general population of physical harm, mental health issues and disrupted family functioning.
Dillon said he doesn’t know how much any advocates of agricultural overtime have talked to people who work on farms and ranches to know what they want. “(Farmers are) adults who are making decisions in their lives like any of the rest of us,” he said. “So to me, it’s a little bit disingenuous to try to sort of substitute outside judgment for, ‘Well, they shouldn’t be doing this or you shouldn’t be doing that.’ There should be the agency with that individual to make that decision.”
Levi Herrera-Lopez, executive director for Mano a Mano, wrote in a statement that he understands some agricultural employers “are concerned that treating workers fairly will cost them more, but that does not change the fact that excluding farmworkers from overtime protections shifts the economic burden to the workers who can least afford it.”
Now that both Washington and California provide agricultural overtime, he said it is even more important for Oregon to stay competitive.
“There is ample evidence that every cent agricultural workers earn is going to be invested right back into the community, via retail, childcare, housing, health care, other small businesses, etc., all of which will help to grow Oregon’s economy,” he said. “We all benefit from their labor. Oregon benefits from their labor. And so should they.”
Contact reporter Ardeshir Tabrizian: [email protected] or 503-929-3053.
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