A rising minimum wage and a decrease in the overtime threshold in New York are both causing the state's farmers to reconsider their production decisions.
State legislation caused New York’s minimum wage to more than double between 2013 and 2020, and the overtime threshold is scheduled to drop from 60 hours to 40 hours by 2032. Now, a provision in a proposed budget and a separate legislative proposal could cause even greater cost increases for producers in the future.
“Our farmers are telling us that we need to push pause on these increases,” Steve Ammerman, communications director at the New York Farm Bureau, tells Agri-Pulse. “They are really concerned about where this could lead and what it means for their future.”
The first proposal — present in Democratic New York Gov. Kathy Hochul’s fiscal year 2024 executive budget — looks to index the state’s minimum wage levels to inflation.
Part S of the budget proposal would amend Section 652 of the state’s labor law by adding a subdivision that requires employers to pay a minimum wage “determined by increasing the current year’s minimum wage rate by the lesser of 3% and the rate of change.” It would index minimum wage levels to inflation beginning in 2024 with specific rates contingent on economic conditions.
On Tuesday, the New York Farm Bureau flagged its opposition to the provision, saying it was "deeply concerned" about its impacts.
"If a farm cannot compete in the marketplace or make ends meet, nothing else will ultimately matter. This could negatively impact our farm employees, future job creation and local food production," New York Farm Bureau President David Fisher said in a statement. "We ask our leaders to look for additional ways to offset mounting labor costs as the new minimum wage will keep increasing in the coming years along with inflation."
Past increases have applied different criteria to three separate areas of the state: New York City, Long Island and Westchester County, and the rest of New York. However, Hochul’s FY2024 budget proposal includes all areas of the state under the same provisions.
The state is also monitoring a legislative proposal from Jessica Ramos, a Democrat in the state Senate who represents the borough of Queens. In January, Ramos reintroduced the “Raise the Wage Act,” which would increase the state's minimum wage.
The bill would require the state minimum wage to progressively increase to $17.25 in 2024, $19.25 in 2025 and $21.25 in 2026. The wage would be indexed to inflation based on several economic indicators in the years that followed.
Ramos’s proposal mimics the indexation used by the New York State Division of Budget to increase the minimum wage in upstate New York until it reaches $15. The bill currently boasts 29 co-sponsors.
The New York Comptroller estimates annual indexation under the Raise the Wage Act averaged 4.6% per year compared to 1.5% under the rules set in the governor’s proposal.
Farmers in all sectors of production have fiercely opposed the proposals.
Eric Ooms is a dairy farmer in Kinderhook, New York, and the vice president of NYFB. Along with 10 other family members, he works full-time on the 500-head dairy farm and cash crop operation 20 miles south of Albany.
“I tend to be the most optimistic of people I know,” Ooms said in an interview with Agri-Pulse. “I don't think this puts agriculture out of business, but it surely will change it. You're going to have more field crops, less dairy and less fruit and vegetables. Businesses are going to have to find ways to do something different.”
Eric Ooms, New York Farm Bureau
Producers could consider shifting to automation systems or working on new value-added marketing opportunities to increase the value of their products.
The Ooms family installed robotic milkers eight years ago. Although the investment was not initially driven by labor reform legislation, the change has proven to be a positive addition to their operation.
“Our rationale for doing so was not labor costs, but labor availability. We kind of figured cost would become a thing, and it certainly is,” Ooms said.
New York is home to more than 33,000 farms that employed 55,363 people, according to USDA's 2017 Ag Census. Dairy and milk production alone accounts for nearly 26,000 jobs.
Jim Bittner grows apples, cherries and peaches — three labor-intensive crops — along the shores of Lake Ontario near Appleton, New York. His family’s orchard, Bittner-Singer Farms, has a 100-plus year history growing produce and selling in a you-pick format to customers.
He estimates that more than 40% of the farm’s total expenses are labor. About one-third of his farm’s 35 employees are local, and the additional two-thirds are foreign national H-2A program seasonal workers.
Don’t miss a beat! It’s easy to sign up for a FREE month of Agri-Pulse news! For the latest on what’s happening in Washington, D.C. and around the country in agriculture, just click here.
In February, the New York State Department of Labor finalized the farm labor overtime regulations. Beginning in January 2024, the rule will decrease the overtime threshold by four hours every other year from the current 60 hours to reach 40 hours by 2032.
Bittner’s farm, along with others, has policies not to exceed the 60-hour overtime threshold for employees. He says the culture of H-2A workers is to spend as much time working as possible, which could pose unique challenges for sourcing and maintaining workers even with higher wages.
“When it starts ratcheting down, it's going to be more difficult. Then you have to question, do we add more people and stay below the threshold like most industries do? Or do we just pay it?” Bittner said in an interview with Agri-Pulse. “I know our workers aren't going to be happy if we cut their hours. Even the H-2A people have opportunities in other states. They don't have to come to New York.”
In 2022, the federal Department of Labor's Office of Foreign Labor Certification granted access to 9,876 workers in New York. That represented about a 7.4% increase over fiscal 2021, but dropped the state from ninth to 10th on the national ranking of most H-2A workers.
Other states also increased their use of the program; Department of Labor figures show a nearly 19% increase in H-2A positions certified in FY22.
New York's share of the total H-2A workforce is also beginning to slip; in fiscal 2020, New York producers employed 3.1% of the country's H-2A workers. By FY21, that number dropped to 2.9% before falling even further to 2.7% in 2022.
The rapid changes and proposals come at a time when farmers are already in a challenging position. Ammerman says the state has lost 2,000 farms since the 2017 census, a statistic that impacts both the farming and non-farming community alike.
"Any time you make it more difficult to grow food and you decrease opportunities for farms to grow, it has a direct impact on local food availability, the amount of food that can be funneled into our food banks and just supporting the farmers in your local economy," Ammerman said. "There are big picture impacts here that we hope our lawmakers can appreciate and understand, because we're talking about our food supply and our food security."
The state’s farmers echo similar concerns about their future.
“If you talk to the older generation, they're incredibly depressed. And if you talk to the younger generation, they're more nervous than depressed because the younger generations try to figure out ‘How can I make this work?’ Whereas the older generations are just saying, ‘I don't even care anymore.’” Ooms said. “It's two different mindsets. Both are incredibly worried, but it's just how do we adjust and make this work so that we can continue to grow.”
Bittner-Singer Farms has moved primarily to a you-pick and wholesale business model, but Bittner said he’s always considering the next thing.
“Corn, soybeans and solar panels just look better all the time,” he said.
For more news, go to www.Agri-Pulse.com.
