Wages Set Too Low
Federal regulations require employers who hire H-2A workers to pay at least the highest of the state or federal minimum wage, the local “prevailing wage” for the particular job, or an “adverse effect wage rate” (AEWR).
The AEWR was created under the bracero program as a necessary protection against wage depression. The Department of Labor (DOL) issues an AEWR for each state based on U.S. Department of Agriculture (USDA) data.
The AEWR has often been criticized by farmworker advocates as being too low. Farmworker Justice explains why:
“First, the USDA survey that DOL uses for the AEWR measures the average wage rates. Employers that have a hard time finding U.S. workers should compete against other employers by offering more than the average wage to attract and retain workers. Second, the AEWR is based on the previous year’s wage rates and does not reflect inflation. Third, the USDA surveys of the average wage include the 55% or more of farmworkers who are undocumented, so the wages are depressed compared to what they would be if only U.S. citizens and authorized immigrants had the job. In addition, the AEWR’s, by themselves, also do not prevent employers from imposing very high productivity standards that desperate foreign workers will accept but that would cause U.S. workers to insist on higher wages.”52
H-2B workers often face an even worse situation with regard to wages than H-2A workers. Under the law, they are entitled only to the “prevailing wage” for their work; there is no adverse effect wage rate for those workers. Of course, even though H-2B workers are entitled to payment of prevailing wages and to employment in conformity with required minimum terms and conditions as provided for in the employer’s labor certifications, federal law provides no real remedy when these rights have been violated.
The purpose of the prevailing wage is to ensure U.S. worker wages are not depressed by the influx of foreign workers to the U.S. labor market, but the current methodology for calculating the H-2B prevailing wage rate is doing the exact opposite. In fact, under the current methodology, the wages of H-2B workers are in some industries almost $4 to $5 lower than the average wage for those occupations, a situation that inevitably places downward pressure on U.S. worker wages.53 The DOL itself determined that the current H-2B wage rule degraded the wages of U.S. workers and, in response, proposed a new rule that would better protect U.S. worker wages.54 This new rule has been attacked by employers in the courts, and its implementation has been effectively blocked by Congress, largely due to the efforts of a few vocal senators and representatives from states with industries that rely heavily on H-2B workers. As a result, a wage rule that directly contravenes its purpose — to protect U.S. worker wages — is still in effect today, resulting in the gross underpayment of wages to hundreds of thousands of H-2B and U.S. workers.
But this is not the only reason that the H-2B wage rule is harming U.S. workers: When an industry relies on guestworkers for the bulk of its workforce, wages tend to fall. Guestworkers are generally unable to bargain for better wages and working conditions. Over time, wages decline and the jobs become increasingly undesirable to U.S. workers, creating even more of a demand for guestworkers.