A recent analysis conducted by University of California agricultural economists, Alexandra Hill and James Sayre, sheds light on the evolving dynamics of farmworker demographics across the U.S. and Mexico, alongside the ramifications for agricultural operations within the United States. The study highlights a shift in the agricultural workforce, marked by an aging population and escalating labor costs, which have been mounting pressures on U.S. farms for over a decade.
The research underscores the attractiveness of the H-2A visa program, which permits foreign nationals to undertake temporary agricultural work in the U.S., despite the higher costs it imposes on employers. This scenario posits that the increased financial burden associated with H-2A labor may incentivize the relocation of certain high-labor-cost crop production to Mexico, as a cost mitigation strategy.
Contributing to the labor shortage in U.S. agriculture is a noticeable decline in Mexican immigrants entering the U.S. farm labor market, attributed to a variety of factors including a shift towards non-agricultural sectors in Mexico, enhanced educational attainment, reduced birth rates, and intensified U.S. immigration enforcement. Despite this, the H-2A program has emerged as a growing source of agricultural labor, albeit at a cost significantly higher than average farmworker wages in Mexico, thereby creating a wage differential that attracts Mexican workers to the U.S. agricultural sector.
However, the elevated wages mandated by the H-2A program, particularly in states with a high demand for labor-intensive crops like California and Washington, are diminishing farm profitability and could potentially expedite the migration of crop production to Mexico. Mexico's competitive edge is further bolstered by its lower labor costs and favorable climate for horticulture, making it an increasingly attractive destination for the cultivation of labor-intensive crops.
Over the past two decades, Mexico has seen a substantial increase in the production and export of high-labor crops to the U.S., with notable surges in the production of blueberries, raspberries, and strawberries. This trend underscores the growing competitive disadvantage faced by U.S. producers of similar crops, amid rising labor costs and regulatory burdens.
Source: University of California