Regularize and Rationalize Farm Labor

Regularize and Rationalize Farm Labor

It makes sense for farm policies to encourage more labor-saving mechanization—through research, for example—and to rationalize and regularize the farm-labor market. This would be in the best interest of everyone: farm workers and farmers, plus the rural areas of the United States and Mexico that farm workers have migrated to and from.

On a per-capita basis, nonmetro areas of the United States receive more government transfer payments than metro areas. In 2008, such payments made up 23 percent of nonmetro residents’ incomes, versus 14 percent of metro income.⁶⁶ Unlike metro areas, which receive immigrants at both the top and the bottom of the education ladder, most of the newcomers in nonmetro areas have not finished high school. Immigrant parents hope their children will escape poverty in the United States, but the odds are not good.

If illegal migration were curbed and wages did not rise, more farmers might turn to the H-2A guest worker program, the only program currently available to hire legal foreign guest workers. Most farmers do not pay social security, Medicare, and federal unemployment insurance taxes on the earnings of H-2A guest workers—making guest workers up to 20 percent cheaper than U.S. workers. One way to rationalize and regularize the farm-labor market would be to levy payroll taxes on the earnings of guest workers.

The amount of money generated from payroll taxes on guest worker earnings would be significant—perhaps $1.2 billion a year. Half of this money could be used to support research on agricultural mechanization and the other half to support development of guest workers’ areas of origin. This would have positive effects in both the rural United States and rural Mexico.

Research accelerated by additional resources from payroll taxes could promote rationalization and ensure that future guest workers have incentives to return to their areas of origin. This leaves the question—what should be done about the million or more unauthorized farm workers currently employed in U.S. agriculture?

There is no easy answer to this question of those now laboring in U.S. fields. The passage of the AgJOBS legislation would allow them and their families to become legal immigrants, meaning the United States would gain several million additional legal Mexican immigrants because families would be united here. AgJOBS would create a path to immigrant visas by requiring continued U.S. farm work, but this strategy goes against decades of experience that demonstrate that the best way to help farm workers increase their incomes is to get them out of agriculture.

AgJOBS would solve part of Mexico’s rural poverty problem by transferring some poor people from rural Mexico to rural America. Given the failures of the Bracero program and 1986 immigration reforms, we need a new approach to immigration and agriculture.

Philip Martin is a professor of agricultural and resource economics at the University of California, Davis.