Benefits to Agricultural Workers Under the Unemployment Compensation Amendment of 1976

BENEFITS TO AGRICULTURAL WORKERS UNDER THE UNEMPLOYMENT COMPENSATION AMENDMENT OF 1976 By G. Joachim Elterich* n January 1978, under P.L. 94 The "Unemployment Compensation Under the employment compensa 566, Unemployment Insurance Amendments of 1976" are expected to tion program, eligible workers are p!:o I provide income protection for about two (UI) coverage was extended to agri fifths of all hired agricultural workers. The vided with partial income protection cultural workers in establishments program became effective in January 1978. should they become unemployed employing 10 or more workers for 20 Of these insured workers, three-tenths are expected to receive benefits, expected to with cause. Only those working for weeks or more, or with a quarterly average about 14 percent of average annual employers subject to the law are eli payroll of at least $20,000. Recent earnings if 1970 employment relationships gible to receive benefits. They must studies of the impact of the law on hold. Nearly one-fourth of unemployed farm workers who receive benefits will meet the following additional condi agricultural employers and trust funds likely exhaust their entitlements before tions. Unemployment for UI purposes found: finding new jobs. Large interstate varia is defined in monetary and nonmone tions are expected around these averages tary terms. To qualify monetarily, a Only about six percent of all as a result of differing State qualifying regulations, benefit schedules, and per worker must show "SUbstantial agricultural (five percent of sonal work histories. farm) employers will be attachment" to the covered labor affected by the law, and these Keywords: force, either for a sufficient number employers cover about half 0f Unemployment insurance of weeks or its equivalent in earnings. Agricultural labor 2 all agricultural workers. A Economic welfare The specific terms differ by State. somewhat smaller proportion To qualify in nonmonetary terms, a of the employment will remain worker must be available for work on cove~ed under the UI law while a job similar to that in which he or ers, representing predominantly between one-third and one-half she is usually employed, be able to of the payroll will be covered the farms with high sales work, and must not be discharged for in most states. Throughout the volumes and highly se&sonal states, wide variations in these operations (such as vegetable, good cause, or leave work voluntar· employment characteristics fruit, tobacco and miscellane ily. In addition, he or she must make exist among employers subject ous farmers) would generally a valid claim for benefits. A worker's to the law among economic cover half to three-fourths of benefit rights-beneficiary status and classes, and types and owner the work force on these types benefit amounts~epend on weeks ship of farms. A small propor of farms. In the area studied of work and wage experience in tion (10:20 percent) of employ which includes the New covered employment during the base England states, New York, period. States have different provi New Jersey, Pennsylvania, Ohio, sions (benefit schedule) for determi *The author is an agdcultural Delaware, West Virginia, Mary economist currently on sabbatical land, Florida and Texas-less ning the worker's benefit rights as to with the Development Support than two percent of the cash the weekly benefit amounts and the Bureau, Agriculture, Economic and duration. Sector Planning Division, U.S. Agency grain, dairy, livestock and for International Development. cotton farmers will cover less This research was funded by NEe than 15 percent of the workers 21, the successor project of NE-58 on these farms. The estimated METHODS ("Economic and Sociological Studies agricultural benefits paid will of Agricultural Labor in the North usually constitute less than one The study reported on here used east States"), and by the U.S. Depart percent of all UI benefits dis workers' employment histories and ment of Labor, ETA, UI Service. The bursed in a state (6, 4, 8).1 their characteristics as of article is published with approval of 1969/70 the director of the Delaware Agricul tural Experiment Station as Miscel I Italicized numbers in parentheses 2 For analysis of the qualifying laneous Paper 815, University of refer to items in References at the provisions and benefit schedules of Delaware, Newark, Delaware. end of this article. workers in different States, see (2). AGRICULTURAL ECONOMICS RESEARCH 23 VOL. 3D, NO.4, OCTOBER 1978 obtained in the NE-58 research, which survpyed a benefits and assess the impact of payments on economic stratified (by payroll), random sample of agricultural welfare of workers. employers in the 15 States previously named. In the second sampling frame, the employers' workforce was randomly selected. The workforce was completely or COVERAGE proportionately sampled, depending on its size. The AND BENEFICIARY STATUS sample data were subsequently expanded to provide population estimates.3 Covered Workers Each worker's 52-week base period, also used as bene Agricultural workers may become eligible to receive fit period, was analyzed with respect to his UI beneficiary benefits when unemployed if they worked for an status; that is, if the worker was covered and/or insured, employer who hires at least 10 workers over a 20-week and/or beneficiary or benefit exhaustee. Only workers period, or who has a high-quarter payroll of at least employed by employers included by the provision as $20,000. Overall, just over half of all hired farm workers defined by P.L. 94-566 (the "10 in 20 or <ji20,000" of employers in the study area are covered. 'I'he varia provision) were considered covered. The SLate's qualify tions in size of employing units (as measured by size of ing and benefit determination status in effect July 1971 workforce) and the duration of employment result in was applied. The 1971 price level applies to monetary wide variations of worker coverage among States (table 1). sta tistics. Workers \vith only nonfarm work have a greater The taoulations and analyses of the estimated impact chance of being covered (64 percent) than workers with of the law on the UI and workforce classifications of only farmwork or with a combination of farm and non 14,818 workers in the survey States will relate the rela farm work (about 50 percent). The reason for this likeli tive coverage of their expanded population (148,925) hood is that nonfarm employers are almost universally due to covered survey employers. covered under existing UI legislation. Of the farm Actual benefits would be paid to workers assuming workers, interstat.e workers have the highest coverage they had the same unemployment experience in the (61 percent) because they are more likely to be second (benefit) year as in the first (base) year and employed by larger employers. By contrast, less than disregarding extended benefits beyond the State's half of the intrastate farm workers are covered (47 statutory limit. The analysis disregards seasonality percent). provisions, which are currently still in effect in some States; dependency allowances; and any changes in labor supply due to the extension of coverage to agri Insured Workers cultural workers. Estimates are based on the assumption Of the farmworkers employed on covered farms, those that workers apply for benefits in the same State in in the labor force all year are most likely to qualify as which they were interviewed, which will not invalidate insured workers (94 percent). Those in the labor force tbe estimates. part of the year are least likely to qualify (64 percent). By taking this approach and population, the study The variation among States is narrow for workers in the assumes the same employment and work history of agri labor force all year (86-99 percent), while it is rather cultural employers and their employees both in 1971 wide for workers with only part-year workforce partici and also 1977 as the survey has not been updated. pation (29-90 percent). This latter group is composed However, it is asserted that any change which may have mostly of students and housewives. occurred since then would change the findings only The difference in the proportion of insured workers slightly. On average, both workers' taxable wages and between the interstate (82 percent) and intrastate (88 the UI benefits have increased approximately propor percent) farmworkers is relatively small for the study tionately. At the same time, the level of employment has area. Because intrastate work is predominantly seasonal, remained constant or increased somewhat in most States in most States, the proportion of covered intrastate and the number of employers with sufficient employ workers who qualify for UI is smaller than for interstate ment to qualify for coverage has remained constant or workers. increased. Thus all factors tend to counteract each other. Both groups display wide variations among States The seasonal employment pattern is judged to remain (from 52 to over 90 percent). The interstate differences essentially similar. in incidence of insured workers can be attributed to The chart reviews the steps involved in determining both the State's qualifying requirements and the UI coverage, steps defined in the next section of this personal work histories (duration of work and earnings). article. Later sections examine potential and actual In Florida and Ohio, stringent requirements for workel' earnings and workforce participation could result in relatively lower proportions of insured workers. How 3 Fo)" more detail on methods, su)"vey and sampling ever, the proportion is high in Florida; covered workers procedures, and )"esults of the original study, see (J, 9, generally have been employed longer and thus have 3). hij!her annual earnings. In Ohio, West Virginia, and most 24 II Eligibility for Unemployment Insuranc.e Coverage and Benefit Determination Under P.L.

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