Giving the 3.5 million workers picking produce on American farms a raise to match the $15 an hour many fast food workers are fighting for sounds unaffordable, right?
Not really. According to University of California-Davis agricultural labor economist Philip Martin, the likely additional cost to American shoppers of that wage hike would be about $20 a year.
“Farmers don’t get much of the retail dollar, and then of course farmers don’t give everything they get to workers,” Martin says. “So it’s fractions times fractions, and you get down to a relatively small share for farmworker wages in retail food cost.” And Martin says that means that raising the wages for farmworkers wouldn’t cost most Americans very much money at all.
Here’s how it breaks down:
Farmworkers Don’t Make Much Now
Farm employers reported paying their hired, seasonal harvest workers—the folks picking and sorting everything from grapes to peaches to tomatoes—an average wage of $10.19 an hour in 2010. Because harvest work is seasonal, many farmworkers only find employment for part of the year; it’s not uncommon for farm laborers to report working about 1,000 hours a year, the equivalent of six months of full time work. And that brings their annual salary to just $10,200—notably less than the federal poverty line of $11,670 for one person in 2014.
Farm Worker Labor Is a Small Percentage of Produce Cost
Those salaries represent a fraction grocery bills. The average American household spent $515 on fresh fruits and vegetables in 2014, and about 28 percent of that—around $137—went to produce farmers. The farmers paid about a third of that to workers, while the rest went to farm maintenance and other costs. At current wages, farmworkers’ annual share of each family’s grocery bill at $45—less than 10 percent.
A Higher Wage Would Still Be a Small Part of the Price
Raising farm worker wages in the U.S. to $15 an hour—and annual earnings to $15,000—would represent a 47 percent wage increase. That might seem huge, but Martin says Americans spend so little on produce that it wouldn’t mean much for families’ grocery bills.
Remember that farmworkers’ share of each U.S. household’s annual grocery bill is $45. If farm worker wages go up by 47 percent, grocery bills would go up just $21.15 a year, or $1.76 a month.
It’s true that few cost increases are resolved this simply. Often, when wages go up, farmers will turn to other innovations, like mechanization, to keep costs down. Or retailers may begin importing food that is cheaper than what’s domestically produced.
And, sometimes, retailers simply resolve to get by with a little less profit.
In 2014, Whole Foods Market began selling tomatoes from the Fair Food Program, a label backed by the Coalition of Immokalee Workers, a human rights group. Under CIW agreements, Florida tomato farmers agreed to boost rates paid to farmworkers by nearly 80 percent. And what did that cost consumers?
“Ultimately, the cost [to Whole Foods] is nominal,” Matt Rogers, global produce coordinator for Whole Foods, told me in the fall of 2015. “It’s not enough to influence retail price at this point.” Prices in store, said Rogers, hadn’t gone up at all.