Labor costs currently comprise one-third of farm expenses in
California, according to a recently released study by Cal Poly
– San Luis Obispo, and area farmers say their stuck with the
bill of rising wages and growing workers’ compensation fees.
Labor costs currently comprise one-third of farm expenses in California, according to a recently released study by Cal Poly – San Luis Obispo, and area farmers say their stuck with the bill of rising wages and growing workers’ compensation fees.
“It’s crazy,” said Patti Gonzales of Gonzales Farms. “My payroll for like one week was $25,000.”
The study found nearly $6 billion a year is spent on direct-hire and contract-labor expenses. That’s about 30 percent of farm and ranch expenses in the state of California.
Cal Poly professor Sean Hurley, the study’s principal investigator, said the labor expenses included wages, Social Security contributions, workers’ compensation, insurance and pension plans.
“A few years back, workmen’s comp was something like 8 percent, and now it’s more like 20,” Gonzales said.
California farms have among the highest workers’ compensation costs. California also has the highest percentage of farms employing migrant workers, with wages averaging $9.25 an hour, according to the study. Florida is the only state that spends more on hired and contracted labor as a percentage of total farm production expenses, Hurley said. In 2001, the national average wage for field workers was $7.80, according to the United States Department of Agriculture.
Gonzales pays her workers $7 an hour, but said if they had to live in the area, they wouldn’t be able to make it on their salary.
“When they’re here they live at the labor camps, and pay something like $2 a day, but they wouldn’t be able to live otherwise on that,” she said.
Passing the extra expense on to the consumers is not an option for local farmers, because most produce buyers have a fixed rate, so if the farmer tried to charge more, their product wouldn’t sell.
“You can only get so much per pound,” Gonzales said. “Buyers can set their rates low because the growers from overseas sell for less.”
Along with having to deal with the state’s rise in labor costs, California growers are also faced with imported produce coming from countries with very low, or no wages for their workers.
Grower David Grimes has been harvesting garlic for 25 years in the area, and said his business has recently had to deal with this problem.
“We’ve been seeing a lot of Chinese garlic being imported, and their labor costs are basically nothing,” he said. “Right now, it’s the farmers who are footing the bill.”
Foreign imports are also to blame for the diminishing San Benito apricot market. The apricots imported from the Mediterranean and Turkey can be sold to buyers at a lower cost that local growers can’t compete with because of labor wages.
For more information, log onto www.calpolynews.calpoly.edu
The Associated Press contributed to this report
