One of the bill’s proposed modifications to the H-2A program concerns the adverse effect wage rate (AEWR), a wage rate that is determined by the U.S. Department of Labor so as not to affect adversely the employment opportunities of U.S. citizens and legal residents who want to perform farm work. Employers must pay their H-2A workers the highest of the Federal or State minimum wage, the prevailing hourly or piece rate, the agreed-upon collective bargaining rate, or the AEWR. For 2012, the AEWRs range from $9.30 per hour (Arkansas) to $12.26 per hour (Hawaii) and average $10.40 per hour for the 50 States.

The current bill would freeze the AEWR for each State at its January 1, 2011, level. If Congress does not establish a new wage standard for the H-2A program within 3 years of the bill’s enactment, then the AEWR would rise by the average of the consumer price index during the previous 2 years but by no more than 4 percent on an annual basis.

Another proposed modification to the H-2A program would allow goat herders, sheep herders, and dairy workers to participate and eventually apply for permanent residency under certain conditions. Currently, the H-2A program is limited to temporary or seasonal workers, which largely excludes dairy, livestock, and nursery operations from participating.

A second bill introduced to the 112th Congress, the Legal Workforce Act (H.R. 2885), would require all employers, agricultural and nonagricultural, to use E-Verify to confirm the employment eligibility of new hires. E-Verify is an Internet-based system operated by the U.S. Department of Homeland Security in partnership with the Social Security Administration. The system enables employers to determine the eligibility of their employees to work in the United States using the information reported by employees on their Form I-9, Employment Eligibility Verification.

The Legal Workforce Act would give agricultural employers 36 months to comply with its E-Verify mandate. Currently, the Federal Government does not require all private-sector employers to confirm the eligibility of their employees using E-Verify, although several State governments do. Some farm groups have expressed concern that mandating E-Verify—without some sort of new or expanded program for foreign-born, agricultural workers who are not currently authorized to work in the United States—would adversely affect many agricultural employers.

Simulation Analysis of Immigration Policy and U.S. Agriculture

ERS has not attempted to estimate the exact effects of the two proposed bills mentioned in this article. Instead, ERS has used a computable general equilibrium (CGE) model to analyze the impact on the U.S. economy under two alternative scenarios in which the supply of foreign-born labor increases or decreases appreciably. A CGE model is a type of economic model that uses interrelated equations to represent an entire economy—agricultural and nonagricultural—and the interactions among its parts.

The model used in ERS’s study—the U.S. Applied General Equilibrium (USAGE) Model—differentiates the U.S. workforce into three categories according to immigration status:

  1. U.S. born;
  2. foreign-born, permanent resident: a person with the U.S. immigration status of permanent resident (including naturalized citizens) and thus legally authorized to work in the United States; and
  3. foreign-born, not a permanent resident: a person without the U.S. immigration status of permanent residency.

The majority of persons in this third category are not legally authorized to work in the United States. For this reason, the term “unauthorized” is sometimes used to refer to people in the third category, and the term “authorized” is sometimes used to refer to people in the first and second categories. The third category, however, also includes foreign-born persons with nonimmigrant visas, such as H-2A workers, who are legally authorized to work in the United States during a specified period but are not permanent residents of the United States.