A Coalition of Oregon Agricultural Organizations has released an economic report
by Highland Economics LLC (“Economics of Agricultural Overtime Pay in Oregon: Potential Effects on Farms and Farmworkers”)
to assess the potential impact of proposed changes to overtime
requirements for Oregon agriculture. The results of the Highland
Economics report indicate detrimental effects to both farmers and
Agriculture is critical to Oregon’s economy, as farming, ranching,
food processing, and related industries are linked to over 8% of
Oregon’s employment. About 5.7% of Oregon’s workforce is employed on a
farm or ranch. The total market value of Oregon agriculture is over $5
billion, with crop production contributing approximately two-thirds and
livestock, poultry, and animal production (including dairy) contributing
the other third.
Labor expenses represent a large part of operating costs for growers
of major Oregon commodities. Nearly 70% of the economic value of crop
production in Oregon is from specialty crops (including fruits,
vegetables, nuts, and nursery products), which rely on farm labor more
than other types of crop production. Other top agricultural commodities
include cattle, calves, and milk production, which have the highest farm
labor expenses nationally compared to different farm types.
Consequently, Oregon agriculture is more labor-intensive than
agricultural production elsewhere in the United States, due to the
larger share of labor-intensive specialty crops and the size of our
Source: Highland Economics survey of Oregon farm operators
Farm costs have increased significantly over the last 10 years, but
farm income hasn’t kept pace. Most Oregon’s farmers and ranchers have
faced significant challenges in the past 18 months that resulted in lost
farm income. Complications range from drought and severe weather
conditions to market access and shortages of skilled agricultural labor.
Nationwide, ag inputs and labor costs rose faster than the prices
received for farm products. In the last 10 years, prices received by
farmers have increased by approximately 9%, while fees paid by farmers
for feed, seeds, fertilizer, chemicals, machinery, services, rent, and
other needs have increased by 16%, cutting directly into profit margins.
Many agricultural commodities are traded on national and global
markets where the farm producers are price takers, so farms will
generally not be able to pass on much, or in some sectors, anything at
all to consumers. Additionally, labor wage rates have increased the
most in the last 10 years, rising by 41.5% nationally. Oregon farm labor
costs follow that trend.
Facing changes to agriculture overtime, as well as rising costs of
production and challenges over the last 18 months, farm employers may
seek to maintain the viability of their operations by controlling labor
costs, such as:
- Employers may attempt to reduce hours qualifying for overtime pay to
the extent possible through mechanization, crop switching, and
switching to piece-rate income versus hourly to increase productivity
with fewer hours.
- Employers may try to hire additional laborers to reduce overtime pay, thereby restricting working hours for others.
- Employers may reduce standard wage rates to offset increased overtime pay compensation.
- Employers may reduce operation size, consolidate, or cease farming altogether.
- Employers facing rising costs and decreased profits may lead to increased development of farmlands.
Most Oregon farmworkers are paid well above the state minimum wage.
Data from the Farm Labor Survey for Oregon and Washington indicate that
average hourly wage rates across all hired farmworkers in 2021 were
between $16.87 and $17.44 per hour. The Oregon producers’ survey found a
similar but slightly higher average pay rate for agricultural workers
of approximately $18 per hour. Adding typical overtime pay at 1.5 times
current pay rates will increase average wages to $27 per hour, which is
not economically feasible for many family farms and ranches.
The reality is that many farmworkers already receive 1.5 times the
regional minimum wage rate, yet the seasonality of farm work translates
to lower overall annual income for many farmworkers. According to the
National Agricultural Workers Survey (NAWS) survey for the Northwest
region of the United States, the average farmworker was employed for
only 35 weeks (67% of the year).
Agricultural overtime pay, as implemented in other states, is a
precursor to what will happen in Oregon. In a 2020 survey of California
farmworkers, over half of the surveyed workers reported that their hours
had changed because of the overtime requirement, and 40% said they felt
more pressured at work after the overtime law was passed. California’s
experience indicates that the overtime law contributes to the
acceleration of industry changes already underway: farm consolidation, a
switch from high-labor to low-labor crops, increased mechanization,
increased use of farm labor contractors and H-2A guest workers, and
reduced agricultural production.
All data sources suggest that farmers will use various means to
reduce worker hours and minimize overtime wages; the impacts will be
varied. Some farmworkers will see their compensation rise (data suggests
more skilled/ higher-paid workers), some will see compensation stay the
same with fewer hours worked (but potentially higher pressure for
increased productivity on the hours worked), and some will see their
compensation fall or their jobs eliminated through increased
Across farms, total cash costs could rise by 6–12% on average. An
increase in 10% of farm cash costs would reduce statewide net farm cash
income by 32–47%.
If farmers were to reduce the hours expected to control costs
associated with ag overtime pay, many farmworkers would face a gross
pay decrease of 3–6%!
Contacts: Anne Marie Moss (Oregon Farm Bureau, AnneMarie@oregonfb.org) and Curt Kipp (Oregon Association of Nurseries, email@example.com).
ABOUT OREGON’S COALITION OF AGRICULTURAL ORGANIZATIONS
Oregon’s Coalition of Agricultural Organizations represents a diverse
array of farming operations and agricultural commodities and was formed
in response to the Legislature’s proposal to require farmers to pay
workers 1.5 times regular pay for all hours worked over 40.
With a total market value of over $5 billion, Oregon agriculture is a
significant contributor to the state’s economy, and over 96% of Oregon
farms are family-owned and operated. Family farms and ranches face
serious challenges – including some of the highest labor costs in the
country – trying to turn a profit every year. Farming is a unique
industry due to the time-sensitive nature of harvesting crops and the
unique hours needed to tend to livestock, which is why farms have been
treated differently for as long as wage and hour regulations have
existed. Because farming is also unique in that these families cannot
set the price of the commodities and products they sell, a steep
increase in their already high labor costs has the potential to simply
put family farms out of business. Because of this, if the Legislature’s
proposed overtime mandate is enacted, farmers will be forced to reduce
hours and take-home pay for farmworkers, mechanize their operations, and
transition away from the specialty crops that define Oregon
The last two years have been devastating for farm families and
farmworkers. Now is not the time to burden family farms and ranches with
an additional unsustainable mandate that will harm both workers and