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Farmers are hoping the bipartisan Supporting Farm Operations Act that would freeze the Adverse Effect Wage Rate becomes a law because otherwise many will be out of business.
“Michigan farmers who rely on seasonal guest workers are in critical need of a stable and predictable wage structure to be able to keep supplying consumers with a safe and affordable food supply that is grown on our soil,” said Matt Smego, director of public policy for the Michigan Farm Bureau.
Ken DeCock said the program is unfair.
“What other business do you know of has to pay their employees what farmers are paying,” said DeCock, a third generation farmer who has been hiring migrant workers through the program for four years.
Joining him for a roundtable discussion on the AEWR were two other produce farmers who annually participate in the program, Joe Kutchey of Romeo and Dave Rudich of Ray Township.
They concurred.
Kutchey said he has no problem paying a fair wage but they’re not just paying workers to be in the fields. But they’re having to cover the costs of everything from the program’s paperwork to their travel and living expenses and no other small business is facing those kinds of costs.
History of the program
The original idea of hiring people from different states and countries emerged as a way of helping with the labor shortages during World War II, according to the Michigan Farm Bureau.
By 1952 when the Immigration and Nationality Act was passed by Congress the H-2A program as it was called included language to guard against an adverse effect. The last update to the program was in 1986 when Congress passed the Immigration Control and Reform Act and retained the adverse effect language.
“The idea was to balance employers’ need for labor with protection of ‘similarly employed’ U.S. workers and ensure there was no adverse effect on the domestic labor pool,” Smego said. “Since its inception, however, the Department of Labor has never done a test to determine if there has ever been an adverse effect.”
So, it’s gone unchecked for years. Now increases to the AEWR are harming the very people they were designed to help: leaving farmers priced out of the labor market and forced to shift to less labor-intensive crops, more mechanized crops or no alternative but to shutdown operations altogether.
Paying the price
The AEWR is a mandated wage from the Department of Labor for employers who hire nonimmigrant guest workers through the federal H-2A program. These are legal workers entering the country on a temporary visa who return to their home or country of origin at the completion of the work contract.
This breakdown of the hourly wages to H-2A workers and other mandated fees gives you an idea of how much some farmers are paying for seasonal workers.
This table shows the increases in the wage rates over the past 15 years:
2010: $10.62
2015: $11.56
2020: $14.40
2025: $18.15.
This rate is paid to each worker in the program, who is guaranteed 40 hours a week, whether the rain stops them from getting in the field or not. The workers are also guaranteed 72 additional hours of sick time, whether they need it or not.
Other costs to farmers in the H-2A program might also include:
• A processing fees for each worker: $1,865.
• Provide transportation by bus, train or plane from their country of origin to Michigan and all meals and hotel stays required along the way: about $3,100 each.
• Supplies such as work gloves, rain coats and boots: $500
• Housing including electricity and gas for heat and cooking: $5,000. Every year there is also an inspection and any damages or fines related to program rules must be paid by the farmers. On one occasion Kutchey’s workers left a pile of pop bottles they intended to return to the store outside. He was fined $600 for not properly storing trash.
• Basic household supplies upon arrival: $150
• Weekly transportation to the grocery store or laundromat: $18.50 hour for the driver
Many farmers also provide vegetables that they grow on the farm in order to help keep their food costs down.
“Year-over-year mandated wage increases outpace the overall U.S. Employment Cost Index nearly every year of the past decade and continue to do so,” Smego said. In just six years the AEWR was raised more than $4.50, going from $13.54 an hour in 2019 to $18.50 an hour in 2025.
That’s a 34% increase and for what reason?
Some farmers believe they’re being asked to foot the bill for illegal immigrants.
America’s shrinking food supply
As a result of these mandated costs 55% of the average Michigan fruit and vegetable grower’s total costs is labor, which does not leave much for seed, fertilizer, equipment and other expenses.
The U.S. Apple Association, which is among the agricultural groups that have endorsed the Supporting Farm Operations Act, reports the cost of growing apples increased 65% in three years, and the main culprit is the cost of labor.
“These rates are 72% higher than the state minimum wage, putting a strain on farmers,” Smego said.
Rudich, who operates the family’s farm along with his brothers, said people need to know why prices are so high and despite what they’re paying for sweet corn, tomatoes and cabbage the return on fresh market produce has stayed static or decreased.
Also trying to raise the public’s awareness of the situation is Protect Our Produce.
“The coalition was created by several key agricultural organizations from across the state to educate consumers on the $6 billion in economic impacts and 40,000 jobs in Michigan that are at risk without a modernized H-2A guestworker program,” said Smego.
Why don’t farmers just hire locals?
“Nobody wants to do the work,” DeCock said. “It’s hard work and long hours often spent in lousy weather.”
Kutchey said he has workers who have been traveling from Mexico to his farm for years. The same for Rudich whose workers come from Guatemala. They’ve both come to know the workers and families whose yearly income relies on the summer work they get in Michigan.
“We treat them very well,” said Kutchey, who is a third generation farmer just like DeCock and Rudich.
Their grandfathers were the ones planting fruits and vegetables when most of Macomb County was rural. Their children who would be the next generation of farmers have no interest in farming.
Why would they?
The H-2A program is a great program for migrant workers but if things remain the same smaller farms will disappear and big farms remaining are likely to find a way to do without the workers.
According to the 2022 Census there are about 3,223 fruit farms and 3,213 vegetable farms in Michigan. Between the 2012 census and the 2022 census, Michigan lost 15,530 acres of fruits and vegetables. Another 5,000 acres were gone by 2023, bringing the total loss since 2012 to 20,000 acres.
“We applaud Congressman John Moolenaar (R-Caledonia) and his colleagues for once again introducing commonsense legislation that allows for a wage pause while Congress works with the White House to find a long-term solution to the agricultural workforce challenges,” said Smego. “Michigan farmers are now counting on Congress to act swiftly and provide crucial relief.”
The bill was first introduced by Moolenaar and reintroduced with support from Republicans and Democrats in several farming states.
“Michigan farmers hire H-2A workers to grow and harvest the food people around the world rely on every day. The Supporting Farm Operations Act ensures these farmers maintain a reliable, legal workforce and can still make ends meet. Our farmers have made it clear that continued increases in their labor costs are unsustainable and would bankrupt them,” Moolenaar said.
