Farm Bureau Cautions Against Minimum Wage Increases
The New York Farm Bureau is concerned about what impact January’s minimum wage increase and proposed new hikes would have on the state’s agricultural sector.
New York’s minimum wage increased to $8.75 an hour on December 31st, 2014 and will rise to $9 at the end of this year. But some state legislators and the governor this session want to see an accelerated schedule to bring the minimum wage to $10.10 per hour. Senate bill 1817 proposes a minimum wage of $11.15 as of January 1st, 2016. Some in the Assembly are discussing a minimum wage of $12.60.
The New York Farm Bureau is concerned that farms across the state will be unable to absorb the cost of any future mandatory wage increases. Farm Bureau President Dean Norton, who operates a 900 cow dairy farm, notes that the state has some of the highest labor expenses in the country. “These high labor expenses are making many of our farms uncompetitive when it comes to selling our products across state lines as well as internationally.”
Norton was joined on the conference call by two fellow farmers; Sandie Prokop operates Crossbrook Farm in Middleburgh with her husband and son. They have about 375 cows and employ seven people. She says the wage proposal presents a very difficult challenge. “That cost to me would be $38,000 plus. If you add in the FICA, the Medicare, the insurance, workman’s comp insurance, etc., it’s over $44,000. In a two month period our milk income has dropped over $40,000. For the month of March it will be even worse. We do not set the milk price. We do not have that $45,000 available. So the choices become very, very dark and very, very serious for everyone that’s milking cows and farming in New York.”
Brian Reeves is a fourth generation owner of Reeves Farms in Baldwinsville, a fresh vegetable and dairy operation. Much of his labor comes from seasonal H2A workers so he already pays above minimum wage. But Reeves says a minimum wage increase would affect all of his employees. “There definitely is a pressure on all wages. Our entire payroll creeps whenever that minimum goes up. The rub for me is that I need to compete with places that typically have fewer expenses to farm than we do here in New York. Every time one of these changes happens it’s just one more little nail in the coffin to farms in New York State.”
In Vermont, where the minimum wage is $9.15, agriculture is exempt from state minimum wage increases. Vermont Farm Bureau President Clark Hinsdale says the marketplace makes the exemption irrelevant. “I don’t think anybody’s made less than two figures per hour on our farm for years. The competition for farm workers just simply results in a minimum wage not being an acceptable wage to pay people.”
Hinsdale points out that some New York dairy farms are at a disadvantage because they are paid less for their milk. “There’s something in the dairy industry called differentials. It has to do with essentially the distance of the farm from Boston. The further away it is the less the price is for milk. So you have some sections of northern New York where the farmers are getting paid 50, 60, 75 cents a hundredweight less than a comparable farm in Vermont just because of its geographic location. That’s enough to make a substantial difference in what a farmer can pay.”
Norton believes that pressure for higher wages may change how farmers farm. “You’re going to see more and more mechanization of agriculture in New York. In the dairy industry you’re seeing more small and medium sized farms that are looking into robotic milking systems.”
New York Farm Bureau wants the state minimum wage to be linked with the federal minimum wage, currently $7.25 per hour.