The Trump Administration’s revised Adverse Effect Wage Rate calculations are being praised by many in agriculture as the common-sense approach they had been waiting for, with pay rates now being tied to a less arbitrary standard. A report called “Broken Baseline” by Dr. Blake Brown, Economics Professor Emeritus at NC State University, served as at least part of the justification the administration used for adjusting the payments for this year’s H2-A guest workers. Brown says he based his proposal simply off a common benchmark, the cost of living.
“We looked at the AEWR, the Adverse Effect Wage Rate, and we looked at how rapidly that had increased, and we said, what if AEWR had just increased by the cost of living? By the way, along those lines, over a 10-year period from 2012 to 2022, social security benefits, which go up by the cost of living increase each year, increased 29%. The AEWR increased 51% over that same period. So why are we not using just a cost of living?”
Brown says his research showed a remarkable difference.
“We would have produced, I think, about three or 4% more fresh produce in this country. This doesn’t sound like a lot, but it is quite a lot. It’s a lot of pounds, like five to 600 million pounds. Consumers would consume about 2% more fresh produce than they do now, because the price would go down. It would have created about 25,000 additional jobs in the economy, if we had just let the AEWR go with the market rate or cost of living increase.”
Citing harm to farmworkers, the new AEWR rates are currently being challenged by farm labor groups in a California Federal court.