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California's New Minimum Wage

 

California's minimum wage rose from $10.50 to $11 an hour January 1, 2018 for employers with 26 employees or more. These employers will pay at least $15 an hour after January 1, 2022.

 

Labor Shortages

 

The California Farm Bureau Federation reported that over half of 760 farm employers responding to a survey experienced labor shortages over the past year, similar to the share reporting labor shortages in 2012. Of those reporting labor shortages, most reported they were up to 20 percent short of the desired number of workers.

 

Half of the farmers reporting labor shortages increased wages and added benefits and incentives to attract and retain workers, many of whom are aging and reducing their hours of work. A third of farmers used more labor-saving machines, and another 30 percent investigated mechanization. Some farmers reduced their acreage of labor-intensive crops.

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The Los Angeles Times reviewed the status of mechanization in various crops July 21, 2017, emphasizing the large number of prototype machines in development to replace hand workers. From apples to strawberries, tech firms are developing machines to harvest crops.

Asparagus acreage is declining, and many leafy greens are harvested mechanically with knives or water jet cutters. Urban tech firms want radical changes in farming to facilitate mechanization, while firms such as Ramsay Highlander in Salinas stress the productivity gains from incremental changes such as conveyor belts to make hand workers more productive. Machines are being used to plant lettuce so that it does not have to be thinned.

Christopher Ranch, which hires 600 workers to pack and process 90 million pounds of garlic a year at its plant in Gilroy, saw a surge in applications after raising packing shed wages from $11 to $13 an hour in 2017; the firm's minimum wage is scheduled to increase to $15 in 2018. The wages of more skilled packing shed workers rose as well. Christopher uses FLC (Farm Labor Contractor) crews and H-2A workers in the fields, where workers are paid piece rates.

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How would US fresh fruit and vegetable producers respond to higher labor costs?  Case studies suggest that there would be labor-saving mechanization in commodities such as raisin grapes and higher prices in strawberries.  Weather is the single most important factor affecting fresh fruit and vegetable trade, but labor and transportation costs also shape trade patterns.  Affluence created a demand for fresh fruits and vegetables year-round, and new seeds and better storage enabled producers to supply commodities year round.  Rising wages can prompt labor-saving mechanization instead of rising imports.  Vegetables are far more mechanized than fruits— about 75 percent of US vegetable and melon tonnage is machine harvested, but less than half of the fruit tonnage.  There was significant interest in mechanization in the 1960s and 1970s, when the end of the Bracero program and the rise of unions led to rapid increases in farm wages.


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