Do guest workers pencil out?
Is an employer better off trying to recruit workers at the orchard or bringing in guest workers through the federal H-2A program? Dave Allan at Yakima Valley Orchards in Yakima, Washington, hired a University of Washington economics student to crunch the numbers and come up with an answer.
“It seems to us that wages will be going up. There seems to be a scarcity of workers, especially for harvest. Should we start to look at the H-2A program, or should we not look at it and see if we can compete with wages and have enough people to harvest?” Allan wondered.
Though Allan has been able to attract enough workers up to now, he’s concerned about where workers will come from in the future and at what cost.
Student Chad Anders of Yakima, now in his senior year at UW, calculated that in 2005, Yakima Valley Orchards hired temporary employees to work a total of 94,100 man hours and paid them an average of $9.35 an hour, or a total of $880,000 for the year. Using U.S. Department of Labor statistics, Anders figured that the average wage for all types of unskilled workers in the Yakima area (including retail, landscaping, foodservice, clerical, and security guards, etc.) was $10.56 an hour. That’s what the orchard would have to pay to compete in the local job market, and that would increase its temporary labor bill by 13 percent.
Anders figured that if workers could be recruited through the H-2A program to work 45 hours a week for 26 weeks, the orchard would require 80 people.
Anders then calculated the cost of recruiting workers through the H-2A program (see “Hourly costs for H-2A workers”, top). As part of the H-2A application process, the employer must advertise locally for workers before foreign workers can be brought in. Assuming that 10 percent were recruited locally, the total cost of hiring the 80 workers through the H-2A program would be $1,064,606, Anders calculates, which would be an increase of 21 percent over the orchard’s 2005 costs, and 7 percent more costly than competing in the local labor market.
However, an advantage is that the H-2A workers are committed to being there: there is no guarantee that there will be a supply of local workers when they’re needed.
Allan thinks the company might use a combination of guest and local workers in the future.