The San Joaquin Valley is the agricultural powerhouse of the United States and California. California accounts for an eighth of U.S. farm sales, largely because it produces high value fruit and nut, vegetable and melon, and horticultural specialty (FVH) crops such as nursery products and flowers. Over three-fourths of the state's $37 billion in farm sales in 2010 were crop commodities, and almost 90 percent of the $28 billion in California crop sales represented labor-intensive FVH commodities.
About half of California's farm sales and farm employment are produced in the eight-county San Joaquin Valley with four million residents that stretches from Stockton in the north to Bakersfield in the south. The leading U.S. farm county is Fresno, which had farm sales of almost $6 billion in 2010.
California's minimum wage went to $10 an hour January 1, 2016.
California in April 2016 approved SB 3 to raise the state's $10 an hour minimum wage to $15 by 2022 for large employers, and by 2023 for employers with 25 or fewer workers. The minimum wage will rise by $1 an hour in January each year beginning in 2017, and increase with inflation from 2024. The governor can suspend minimum wage increases for a year in recessions or if there are serious budget crises.
SB 3 was enacted to head off a $15 an hour union-sponsored initiative on the November 2016 ballot that was expected to be approved by voters.
The minimum wage increase is expected to affect 5.4 million of California's 15.1 million workers, raising their wages by an average $2.20 an hour or $3,700 a year. The University of California, Berkeley's Center for Labor Research and Education estimates that almost 40 percent of those affected by the $15 minimum wage are 20 to 29, and that over half have a high school education or less. Over 55 percent of those expected to benefit from the rising minimum wage are Latino. A third of California workers affected are in retail trade and food services; less than five percent are in agriculture.
There is much speculation about the impacts of the $15 minimum wage in the San Joaquin Valley. In Fresno and other San Joaquin Valley cities, the $15 minimum wage would be three-fourths of the projected $20 median wage in 2022, while $15 will be less than half of the projected median wage in San Francisco in 2022.
California farmers lamented the 50 percent increase in the minimum wage. They complained that labor costs have risen rapidly because of the Affordable Care Act and paid sick leave as well as the slowdown in Mexico-U.S. migration. The higher minimum wage is likely to spur labor-saving mechanization.
Almost 200,000 workers in Fresno county are expected to be affected directly by the minimum wage increase. Many employers predict that they will have to lay off workers and raise prices. Some economists and unions counter that the increased wages of workers will lead to more spending and economic activity that generates new jobs. Fresno county has a million residents, and 200,000 receive some form of financial assistance from the county because of low incomes.
San Francisco in April 2016 became the first U.S. city to require six weeks of paid leave for new parents, including same-sex couples who adopt. California already requires paid parental leave of 55 percent of usual pay for six weeks, paid for by employee-financed public disability insurance. San Francisco will require 100 percent of usual pay beginning in 2017 for employers with 50 or more workers, and a year later for those with 20 or more employees.
New York in April 2016 approved S 6406 to raise that state's minimum wage to $15 an hour in New York City by 2018 and slower in the rest of the state. New York will also require employers to provide up to 12 weeks of paid leave for their employees beginning in 2018, with the benefit financed by employee payroll deductions.
California has about 12 percent of U.S. workers and New York six percent, so that two states with almost 20 percent of U.S. workers are experimenting with some of the largest-ever minimum wage increases.
Oregon approved a minimum wage hike in February 2016 that will raise the minimum wage in Portland from $9.25 to $14.75 on July 1, 2022, $13.50 in counties with medium populations, and $12.50 in rural areas.
This post was an excerpt of the most recent Rural Migration News published in April 2016.
Rural Migration News summarizes the most important migration-related issues affecting agriculture and rural America. Topics are grouped by category: Rural America, Farm Workers, Immigration, Other and Resources.
There are two editions of Rural Migration News. The paper edition has about 10,000 words and the email version about 20,000 words.
Distribution is by email. If you wish to subscribe, send your email address to ruralmigrationnews-subscribe [at} primal.ucdavis.edu. Current and back issues may be accessed at http://migration.ucdavis.edu.
The paper edition is available by mail for $30 domestic and $50 foreign for one year and $55 and $95 for a two-year subscription. Make checks payable to Migration Dialogue and send to: Philip Martin, Department of Ag and Resource Economics, University of California, Davis, California 95616 USA.
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