U.S. Department of Labor Employment and Training Administration EVALUATION OF THE H-2A ALIEN LABOR CERTIFICATION PROCESS AND THE U.S. FARM LABOR MARKET By: Philip Martin [email protected] Submitted to: U.S. Department of Labor Employment and Training Administration 200 Constitution Avenue, NW Washington, D.C. 20210 Contract Number: DOL061A20353 Submitted By: KRA Corporation 8757 Georgia Avenue, Suite 1300 Silver Spring, Maryland 20910 September 18, 2008 TABLE OF CONTENTS PREFACE AND ACKNOWLEDGEMENTS ............................................................................................................ I EXECUTIVE SUMMARY ......................................................................................................................................... II SECTION A FINDINGS AND RECOMMENDATIONS........................................................................................................ II THREE KEY CONSIDERATIONS ............................................................................................................................................... II STREAMLINING RECOMMENDATIONS ................................................................................................................................. IV Table 1. H-2A Streamlining Recommendations ...................................................................................................... iv Electronic Information .......................................................................................................................................................... v ABC Employer Ratings ........................................................................................................................................................ vii U.S. Worker Recruitment ................................................................................................................................................... vii Prevailing Wages, Enforcement, and Funding ........................................................................................................... x SECTION B FINDINGS AND RECOMMENDATIONS ............................................................................................................... XI THREE KEY CONSIDERATIONS .............................................................................................................................................. XI THREE RECOMMENDATIONS ............................................................................................................................................... XII Econometric Models ........................................................................................................................................................... xiii Commodity Case Studies ................................................................................................................................................... xiv Implications for the Department of Labor ................................................................................................................. xv A. CURRENT H-2A SYSTEM PERFORMANCE. ................................................................................................. 2 1.1 EVOLUTION OF THE H-2A PROGRAM ........................................................................................................................... 2 Table 2. Evolution of H-2A Concepts ............................................................................................................................... 3 WWI Exceptions ....................................................................................................................................................................... 4 WWII Braceros .......................................................................................................................................................................... 7 Figure 1. Mexican Bracero Admissions and Apprehensions, 1942-64 ......................................................... 11 BWI and H-2 Programs ...................................................................................................................................................... 13 1.2 THE H-2A CERTIFICATION PROCESS ......................................................................................................................... 16 Table 3. H-2A Certification Flow Chart ...................................................................................................................... 19 Streamlining Issues: OFLC and NPCs ........................................................................................................................... 22 Table 4. NPCs Issues and Streamlining Options ..................................................................................................... 23 Streamlining Issues: SWAs ............................................................................................................................................... 28 Table 5. SWA Issues and Streamlining Options ...................................................................................................... 29 Recruitment Issues ............................................................................................................................................................... 34 Transportation and ¾ Guarantee ................................................................................................................................ 37 Wage Issues ............................................................................................................................................................................. 38 Table 6. H-2A Wage Issues ............................................................................................................................................... 38 1.3 H-2A PROGRAM DATA ................................................................................................................................................. 41 Figure 2 H-2A: Certification Requests and Approvals, FY 1998-2006 ......................................................... 42 Table 7. H-2A Workers Certified by State, FY 2006 .............................................................................................. 43 Figure 3. H-2A Jobs Certified by State, FY 2006 ...................................................................................................... 43 Figure 4. H-2A Jobs Certified, Top Five States, FY 1998-2006 ......................................................................... 44 1.4 H-2A GRANT ALLOCATIONS ........................................................................................................................................ 44 Table 8. Top 10 States: Shares of Alien Labor Certification Grants, FY 2007 ........................................... 45 Figure 5. State Shares of H-2A Jobs Certified and H-2A Costs, FY 2006 ...................................................... 46 Figure 6. Average cost of Inspecting H-2A Housing, States, FY 2006($) ..................................................... 47 Figure 7. Average Cost of Prevailing Wage and Practice Surveys, States, FY 2006($) ........................ 48 4604-006 KRA Corporation . Figure 8. Average Cost of Processing H-2A applications, States, FY 2006($) .......................................... 49 B. CURRENT AND FUTURE FARM LABOR MARKETS ............................................................................... 49 2.1 LABOR DEMAND AND SUPPLY IN AGRICULTURE ...................................................................................................... 50 2.1.1 FARM LABOR PATTERNS ........................................................................................................................................... 50 2.1.2 FARM LABOR DATA ................................................................................................................................................... 51 Table 9. Longest Distance Traveled in miles as a Migrant: 1981-83........................................................... 56 Table 10. Average Annual UI-Covered Employment and Wages, 2005 ....................................................... 62 2.1.3 HIRED LABOR ON U.S. FARMS ................................................................................................................................. 63 Table 11. Hired Worker Hours in U.S. Agriculture, 2002 ................................................................................... 64 Table 12. United States: Farm Labor Expenses, 2002.......................................................................................... 65 Table 13. United States: Farms by NAICS and Labor Expenses, 2002 .......................................................... 65 2.1.4 HIRED LABOR IN FVH AGRICULTURE .................................................................................................................... 66 Table 14. U.S. Horticultural Crops, Value, $bil, 2004-06 .................................................................................... 67 2.2 ECONOMETRIC MODELS................................................................................................................................................ 68 2.2.1 SCHUH MODEL, 1929-61 ........................................................................................................................................ 69 2.2.1 UPDATING THE SCHUH MODEL, 1975-2005 ......................................................................................................