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                                              Deputy Wage and Hour Administrator

                                               Employment Standards Administration

                                               United States Department of Labor

                                                          before the


                            OF THE HOUSE JUDICIARY COMMITTEE

                                                         June 15, 2000

 Mr. Chairman and Members of the Subcommittee:

Thank you for the opportunity to appear today to present the Administration's views on H.R. 4548, which would establish a new 3-year agricultural guestworker

program as an alternative to the existing H-2A temporary nonimmigrant agricultural worker program under the Immigration and Nationality Act. We recognize the

efforts of Congress to address the challenges facing both agricultural producers and farm workers.


Mr. Chairman, I would like to briefly describe current trends in the agricultural economy and workforce that frame the context in which this bill should be considered.

I will then present some of our specific objections to H.R. 4548 and provide recommendations for stabilizing the agricultural labor market that will reduce farmers'

risks while simultaneously improving the lives of the Nation's farm workers.


First let me state that the Administration has acknowledged problems with the current H-2A program and is working administratively (through administrative actions

and the regulatory process) to reengineer and streamline the program to better assure growers an adequate, predictable labor supply while protecting U.S. farm

workers who are among the poorest and most vulnerable in our society. To this end, the Administration has requested $10 million to fund America's Agricultural

Labor Network ("AgNet") that would benefit growers and workers by having an efficient additional means to match workers with employment opportunities. The

Department of Labor has published regulations to reduce the length of time that employers must file an H-2A application from 60 to 45 days before the date when

employees are needed; reduce the deadline for when employer-provided housing must be available for inspection before the date of need; and to modify the

requirement that certified H-2A employers provide notice of the exact date on which H-2A employees have departed for the place of employment. DOL and the

Immigration and Naturalization Service (INS) will soon issue a final regulation that will complete an earlier proposal to delegate authority to adjudicate most H-2A

petitions to DOL. This change would significantly reduce the burden to growers when filing for H-2A workers by removing an entire step from the current process.

Furthermore, DOL has made additional administrative changes to the H-2A program such as modifications to the positive recruitment requirement. DOL intends to

consistently meet the existing 30 day deadline to issue approved certifications for growers.


State of the Agricultural Economy and Labor Market


U.S. agriculture is benefiting economically from increased access to global markets, but farm workers are not sharing in those benefits. Production of labor-intensive

commodities like fruits and vegetables has increased and global demand for American produce continues to grow, but farm worker earnings and working conditions

are either stagnant or in decline.


The Administration supports policies that will:


promote greater predictability and reliability in both the labor supply and availability of work;


     assure that the system available to growers seeking access to foreign workers is as simple and the least burdensome as possible;  improve farm workers'

     wages, working and living conditions;  better connect authorized workers to employment opportunities;  increase the number of weeks farm workers are

     employed each year; and, in turn, increase farm workers' earnings.


The Congress has heard testimony that labor-intensive agriculture in the U.S. - including tobacco, vegetables, fruits, nuts, berries, horticultural and greenhouse

commodities - continues to undergo a dramatic transformation. U.S. farm receipts for fruit and horticultural specialty crops have more than doubled - and, for

vegetables, more than tripled - during the last two decades. Labor-intensive agriculture underwent explosive growth between 1987 and 1997. Domestic and foreign

demand for its commodities has increased substantially, and technological developments in transportation and storage along with changes in consumer tastes and

preferences that favor fruits and vegetables have facilitated the expansion. This market expansion has been accompanied by changes in the structure of the

labor-intensive agricultural sector. Fewer and fewer farms are growing these commodities on more and more acreage.


But while overall production of labor-intensive agricultural commodities is up - as measured by acreage, production and the market value of sales - the number of

employed farm workers has remained relatively stable. Recent research reports indicate that the total number of hired and contract farm workers in the U.S.

decreased slightly between 1990 and 1998, but agriculture's use of hired labor has remained relatively constant over the last ten years - at an estimated 1.8 million



Labor in agriculture has become more productive. And the increased output was apparently accomplished with little investment in mechanized agriculture. But this

increased productivity has not resulted in higher wages. Rather, according to both the National Agricultural Worker Survey (NAWS) and the National Agricultural

Statistics Survey (NASS), farm worker wages declined over the last decade in real terms.


While the level of employment has remained stable, the NAWS data from 1989 through 1998 reveal that the demographic and employment characteristics of farm

workers have changed substantially. Compared to 1988, farm workers in 1998:


found fewer weeks of employment;


earned less per hour in real terms;


continued to have poverty level earnings; and


were less likely to utilize public assistance/programs designed to help ameliorate


the effects of poverty on the working poor.


NAWS findings of falling real wages, less employment, and low annual incomes of U.S. crop workers are all indicators of a national oversupply of farm labor. These

same factors contribute to the higher turnover in the agricultural labor market, as workers exit farm labor in search of jobs paying higher wages, offering more hours

of work, and offering more steady and predictable employment. Instability in this labor market is due, in part, to agriculture's failure to create the working and living

conditions necessary to attract and retain skilled, experienced and authorized workers. Over the last decade, agriculture's ability to retain workers has dwindled. The

agricultural sector has replaced many authorized workers with unauthorized workers. Today, only about one-half of the agricultural labor force is authorized to work

in the U.S.


Examining farm worker wage, earnings and poverty trends more generally from 1989 to 1998, one finds that over the period of the 1990s - with a strong economy

and greater, increasingly widespread prosperity - farm worker wages have lost ground relative to those of workers in the private, non-farm sector. Between 1989

and 1998, the average nominal hourly wage of farm workers rose 18 percent (from $5.24 to $6.18), while the wages of workers in the private non-farm sector

increased by 32 percent. Consequently, farm workers went from earning 54 percent of the average hourly wage for all production workers in 1989 to earning just

48 percent of that wage in 1998. Adjusted for inflation, the average real hourly wage paid to farm workers -- in 1998 dollars -- dropped from $6.89 to $6.18 -

over a 10 percent loss in purchasing power.


Compounding the effect of falling real wages is the inability of farm workers to find enough employment. Over the ten-year period 1989-1998, the amount of

agricultural employment that farm workers were able to obtain per year declined. In 1989-1990, farm workers were employed, on average, 29.3 weeks per year in

agriculture. In 1997-1998, the average number of weeks dropped to 24.9. Even during months in which the demand for farm labor peaks, many farm workers are

not employed in agriculture - in July 1997, only 56 percent of all crop workers had a farm job. Earning less per hour (in real wages) and working fewer weeks per

year, it is not surprising that the median personal and family incomes of farm workers have remained low since 1989-1990.


Instability in the farm labor market is also reflected in other changes in the demographic and employment characteristics of farm workers. The market is increasingly

young, and migrant.


These demographic changes have occurred at the same time farm worker employment, wages and earnings have declined:


the average number of years working for the current agricultural employer has declined;


the percentage of workers employed seasonally, rather than full-time, increased;


use of farm labor contractors in labor-intensive agricultural commodities increased; and


other employer-provided benefits that could help stabilize the workforce and induce workers to remain in the industry -- such as paid holidays and vacations,

health insurance and paid transportation -- are also in decline.


All of the above trends paint a picture of the conditions under which farm workers live and work. Low wages, sub-poverty annual earnings, significant periods of un-

and under-employment, low utilization of safety net programs all add up to a labor force in significant economic distress. In addition, the continued oversupply of

workers will not allow the market conditions necessary to give farm workers sufficient labor market leverage to substantially change these conditions.


                                                      Views on H.R. 4548


Mr. Chairman, it is the Administration's view that H.R. 4548 will not ameliorate these serious problems in the agricultural labor market, but rather -- if enacted -- it

would almost certainly make them worse. The Administration has been and remains opposed to establishing a new agricultural guestworker program that further

increases the supply of agricultural workers and reduces their legal protections.


We have raised serious concerns that legislation like H.R. 4548 would almost certainly:


* increase illegal immigration;


* reduce work opportunities for U.S. citizens and other legal residents; and


* depress wages and work standards for American workers.


The Administration's position on this issue is consistent with the conclusions of two


Congressionally-created commissions -- the bipartisan Commission on Immigration Reform, chaired by the late Barbara Jordan, and the Commission on Agricultural

Workers, which examined this issue in the early 1990s - as well as the more recent Binational Study on Migration, a joint study by highly respected scholars from

both Mexico and the U.S. which issued its report in September 1997.


Mr. Chairman, let me explain the Administration's opposition to H.R. 4548 by posing and answering four questions that we would urge the Congress to carefully

consider. I believe the answers we present demonstrate that H.R. 4548's proposed new guestworker program will have the harmful effects we would expect and is,

therefore, not the solution to problems besetting the agricultural labor market.


First, would H.R. 4548 provide growers the stable labor supply they seek? H.R. 4548 would permit admission of an unlimited number of new "H-2C" foreign

agricultural guestworkers without any reliable determination that a labor shortage actually exists. So the answer to this question may be "yes" in the short-term and for

some growers. Growers currently using the H-2A program would likely move over to the new program envisioned by H.R. 4548 because unquestionably their labor

costs would be lower. And many other growers may want to use the program as well.


Making use of the new H-2C program even more appealing is the fact that this program -- for the first time, and in contrast to all other employment situations in the

country -- would shift the burden of finding workers from the employer to the government. Agricultural employers desiring to hire foreign guestworkers would have

no obligation to find U.S. workers on their own behalf except to apply to the government-operated registry, advertise (on behalf of the registry) in a local publication,

and make "reasonable efforts" to contact workers employed in the previous season. Under H.R. 4548, the government would only have 14 days to find an

employer's workers, may only search for such workers registered in the State where the work is to be performed, and must contact each potentially qualified worker

to obtain a commitment to accept the offered job. Failure to overcome the obstacles to effectively operating an electronic job matching service in the agricultural

labor market would allow the employer to obtain its workforce abroad.


The second question is whether H.R. 4548 will protect U.S. agricultural workers from unfair competition? It would not. Domestic farm workers will see

their employment opportunities further reduced and farm workers generally will see their wages, benefits and working conditions undermined because of the inferior

protections provided by the proposed H-2C program.


As noted, the bill contains no requirement for employers to develop and implement an affirmative or effective domestic farm worker recruitment plan. Nor does it

ensure U.S. farm workers their current right to be hired by employers using H-2A workers if they make themselves available for work. Unless they are referred

through the registry, those appearing in person for the work offered by the employer could be turned away because this legislation would no longer require the hiring

of any U.S. worker who makes him/herself available for work during the first half of the employer's contract period. Moreover, farm workers would also lose their

guarantee of pay for at least three-quarters of the work hours/days offered in the employer's contract and could be terminated without pay at any time for "lack of



Farm workers would lose rights under current law and no longer be guaranteed any wage higher than the Federal or State minimum wage -- unless the employer

decides to pay by-the-hour and offers a higher hourly wage. Any employer would have to promise to pay the locally prevailing wage or the (new) adverse effect

wage rate - that is, the locally prevailing wage plus up to 5 percent. But any employer offering any "incentive payment method" - that is, piece-rate, task-rate, or

group-rate - would only have to meet this obligation on average for the group of workers as a whole; no individual worker would be guaranteed any higher minimum



Under the current H-2A program, each H-2A worker and similarly-employed U.S. worker must be paid the higher of the State or Federal minimum wage, the

locally prevailing wage, or the "adverse effect wage rate" -- which is the average State or regional wage for farm jobs. With the disparity between pay requirements

in current law and H.R. 4548, tens of thousands of farm workers would be very likely to experience pay cuts. For example, we estimate that in North Carolina

alone, more than ten thousand farm workers - H-2A and similarly-employed U.S. workers - could experience a nearly 20 percent pay cut under the wage

provisions of the proposed H-2C program.


Under H.R. 4548, some farm workers who benefit from employer-provided housing now might lose their housing since their employers could substitute a voucher

for housing. Moreover, compared to current law, the proposed new program would shift travel costs from growers to low-wage workers. For example, in a change

from current law, workers would not have to be reimbursed for travel costs at all if they travel less than 100 miles or if -- for some reason --they do not reside in

housing provided directly or secured through a voucher. Furthermore, domestic farm workers hired through the registry, who work along side H-2A workers, would

not be entitled to receive prevailing benefits and working conditions as required under current law.


The third question is whether H.R. 4548 will adequately protect foreign agricultural workers from abuse? Again, the answer is clearly "no." For the

reasons just discussed with regard to domestic farm workers, foreign workers admitted under the H-2C program would lose rights under current law with regard to

wages paid and other benefits. In addition, the bill weakens the current housing requirement by allowing growers to provide a housing voucher in lieu of actual

housing. One likely result of this approach is if the voucher is convertible to cash, foreign workers may not obtain housing thereby leading to adverse impacts on local



Also, instead of being fully reimbursed for travel expenses, the new H-2C workers would at most only have to be reimbursed for their travel from the border to the

place of employment if they complete 50 percent of the contract period, and back to the border if they complete the contract. The current H-2A program requires

reimbursement from/to the place where the worker was recruited. Again, under H.R. 4548, there need be no travel reimbursement for distances under 100 miles.

Also, like domestic farm workers, the H-2C workers would not be entitled to receive prevailing benefits and working conditions.


Finally, we must consider how H.R. 4548 will affect illegal immigration to the U.S.? The substantially reduced worker benefits and protections afforded

under the new H-2C program will provide powerful incentives for many more U.S. agricultural employers to actively reach out to recruit labor from abroad. Experts

and academics who study migration flows generally agree that guestworker programs establish migratory networks and paths that increase illegal immigration.

Guestworkers tend to come and stay in the receiving country. The program resulting from H.R. 4548 would be no different. And it would make it easier for foreign

agricultural workers admitted under the program to become illegal workers by overstaying in this


country. And it appears that H.R. 4548 would put the employer under no obligation to ensure the workers it imported leave the U.S. upon completion of the work.


In sum, the cost of this proposed new H-2C program could be enormous to the Nation. In our view, this proposed new guestworker program would exacerbate the

Nation's problem with illegal immigration, adversely impact the employment opportunities, wages and working conditions of U.S. farm workers, and increase -- not

reduce -- the opportunity for abuse of foreign agricultural workers.


Policy Recommendations for Stabilizing the Agricultural Labor Market


Mr. Chairman, there are ways to stabilize the agricultural labor market. We need to implement near-term policies that will address the known problems in the labor

market and begin to explore additional steps that may be appropriate to promote greater predictability and reliability in the labor supply and to modernize protections

for farm workers to reflect the agricultural labor market of the 21st century. We believe the following recommendations can establish a foundation for progress:


Policy Recommendations


Increase the minimum wage. Congress should raise the minimum wage by $1 an hour over two years. This increase would make a significant difference in the

ability of many migrant and seasonal farm workers who work for wages at or near the minimum wage to earn enough to support themselves and their families.


Provide funding for "AgNet". Congress should fund "AgNet," an Internet-based, on-line job matching system to help connect agricultural employers and

workers. In its FY 2001 budget request, the Administration has again asked for $10 million to build and implement AgNet. Even though Congress did not provide

that funding when requested for FY 2000, the Department of Labor has developed a prototype and is ready to move forward with the program if appropriations are

made available. AgNet will be both an information system and a voluntary labor exchange tailored to the needs of the agricultural sector. Workers will be able to

post work experience and the types of opportunities they seek; search for jobs; and have the system match worker information against that submitted by employers.

Employers will be able to post jobs and search for workers. We believe AgNet holds the potential to be a new and powerful resource for employers seeking farm

workers and for those seeking agricultural jobs. But it will not be the exclusive labor matching service envisioned in H.R. 4548.


Continue to streamline and reengineer the current H-2A program. We are committed to complete current efforts and continue to streamline the H-2A

program without weakening protections for U.S. and foreign farm workers. The Department has been working to reengineer and streamline the H-2A program to

ease application burdens on growers while maintaining effective worker protections. This includes a change in the regulations to reduce the deadline for when

employers must file H-2A applications from 60 to 45 days before the date when workers are needed, and another change -- which will be published as a final rule in

the Federal Register within the next few weeks -- to delegate from INS to the Department of Labor authority to adjudicate certain H-2A petitions - those filed on

behalf of workers located outside the U.S. Additionally, the McConnell Amendment requires that certifications now be issued 30 days before the date of need. The

Department has also established a section on its web site for H-2A employers, who can now access information about the H-2A program and the necessary forms

for processing an H-2A application on-line.


Encourage use of available verification systems. We should work together to increase growers' use of automated verification systems thereby increasing

growers' confidence in and reducing their business risk associated with their workers' immigration status.


Increase resources for domestic enforcement. Congress should support increased resources for stronger enforcement of U.S. labor laws. Increased funding and

Congressional support for strong labor law enforcement will ensure that the Department can effectively focus on and deploy adequate resources to address those

employers which pay less than legal wages and provide substandard work environments.


Identify and eliminate barriers for U.S. farm workers accessing "safety net" programs. We should identify barriers U.S. farm workers face in accessing

"safety net" programs they are currently eligible for including the Earned Income Tax Credit (EITC), and farm worker health, housing, and educational assistance.


Continue discussions with other countries. The United States must continue to pursue bi-lateral and (under the terms of the NAFTA labor side agreement)

tri-lateral discussions with countries that send farm workers to the U.S. to explore ways in which the workers legal rights can be better protected.




This Administration has consistently opposed proposals similar to H.R. 4548 to supplement or replace the current H-2A program with a new agricultural

guestworker program for the reasons stated in this testimony. Indeed, during the 105th Congress, the Secretary of Labor recommended that the President veto H.R.

3410 which was similar to the legislation you are considering today. For these reasons, the Administration strongly recommends that Congress reject this proposal

and, if passed by the Congress, the Secretary of Labor would strongly recommend that the President veto H.R. 4548. We urge Congress to examine and give

favorable consideration to the recommendations I just outlined as ways to establish a foundation for progress towards stabilizing the agricultural labor market.


I appreciate the attention given by the Subcommittee members and staff to our views, and their consideration. The Department looks forward to continuing to work

closely and cooperatively with you and your staff.


Mr. Chairman, that concludes my statement and I will be pleased to respond to questions.


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