Minimum wage hikes create challenges for specialty crop growers
The Chief Operations Officer for the largest pumpkin grower in the nation says their biggest challenge is keeping up with minimum wage increases.
Tony Phillips is with Frey Farms based in Keenes, Illinois. He tells Brownfield they also grow watermelons, sweet corn and gourds totaling nearly 12,000 acres of produce that is all hand harvested- mostly by migrant workers through the H-2A program.
“In the country today, there is understanding that maybe you hire immigrant workers because of the cost savings, but it’s not a cost savings, it is actually significantly higher than the average minimum wage.”
H-2A workers are payed an Adverse Effect Wage Rate that is calculated based on what the average farm laborer makes in a particular state which increases with the minimum wage. Since Frey Farms has workers in multiple states, they are required to match those wages at the highest level for their H-2A workers and any domestic workers in the same position – which this year is the $14.58 wage in Missouri. Phillips says that wage has increased by $5 per hour in the last seven years.
“If I have 200 workers coming in and the wage has gone up $1 an hour from last year, that means for every man hour I have $200 more cost.”
And the Illinois minimum wage, for example, is set to increase another $5 by 2025. Phillips says they are actively involved in legislation for the program to make the wage more sustainable. In the meantime, they are getting creative with ways to be more efficient with fewer workers.
“A couple things that we have done is minimize hours, try to bring the number of workers down and be more efficient and thought about bringing in a contract harvester to set aside those costs.”
Phillips says they have had great success with the H-2A program and enjoy seeing their employees return each year.
“We take great pride in our workers. They become family. We have watched them grow and bring their sons the next year and watched them mature in their work with us so it has been a good experience.”
Frey Farms has farms and facilities in 9 states including Indiana, Missouri, Minnesota, and Arkansas.