Agricultural companies operating in California’s Central Valley are increasing their minimum wages to $15 per hour which may add to upward pressure on minimum agricultural wages in the Pacific Northwest.
The Wonderful Co., a Los Angeles agricultural conglomerate that produces the popular Halos mandarins, announced Dec. 19 that it is raising its minimum wage for its more than 2,000 California employees to $15 per hour on Jan. 1.
The state’s minimum wage increased from $11 to $12 on Jan. 1, but won’t reach $15 until 2022.
“Our dedicated and hard-working employees are our greatest asset and the reason for our tremendous success as a company,” Stewart Resnick, company owner and president, said in a news release.
“This move firmly positions The Wonderful Company as the employer of choice in California’s Central Valley and we encourage others in the agriculture industry to follow our lead,” Resnick said.
The company said the increase is an $80 million investment benefiting workers in its citrus, nuts, pomegranate, nurseries, Justin Wines and Landmark Wines.
The $4 billion global company touts health and happiness of its consumer brands. It employs 9,000 people worldwide.
A Wonderful spokesman said the $15 wage is not reflective of a tight labor market but shows the company’s desire to become the employer of choice in the Central Valley and attract and retain the best employees.
But Ken Christopher, vice president of Christopher Ranch, the nation’s largest fresh garlic producer in Gilroy, said the company was short 50 workers when it boosted its minimum wage from $11 to $13 in January of 2017 with a pledge to go to $15 on July 1, 2018.
“We had a surge in applications when we did that and still have a waiting list of 100,” Christopher said. “We’re starting to pull from non-traditional labor pools, like those going to work at Starbucks and now see us as attractive.”
Previously, the company turned away orders because it didn’t have the labor to maintain full production, he said. Now it produces more, making up the cost of the increased wages, he said. Other costs are going up, but labor costs are stable and increased automation should keep it that way, he said.
Wages went up for 600 of 1,000 employees with the other 400 already making above minimum wage, he said. Hand harvesters make more than minimum wage on piece rate, he said.
While Christopher Ranch and The Wonderful Co. mark new highs in the Central Valley, minimum farm wages in the Napa and Sonoma wine country are around $17 per hour. And higher minimum wages in California add to pressure for higher wages in Washington and Oregon also pressured by higher minimums for H-2A-visa guestworkers, said Jennifer Uranga, owner of Mountain West Ag Consulting in Wilder, Idaho.
The H-2A minimum is to go to $15.03 in Washington and Oregon on Jan. 9., but may be stopped by litigation.
The H-2A minimum, known as the AEWR or Adverse Effect Wage Rate, pressures even non-H-2A growers to pay that to stay competitive, Uranga said.
“Eventually, all this pressures everyone in every state to pay more to keep workers, but farmers aren’t getting any more money at grocery stores,” she said.
Some Idaho growers are holding back on new H-2A contracts until they know the outcome of the National Council of Agricultural Employers injunction to stop the AEWR increase, she said.
But Chuck Zeutenhorst, general manager of First Fruits Marketing of Washington, in Yakima, said he thinks increases in the AEWR pressure Northwest wages but that California increases don’t.
The cost of living is greater in California and when the national economy is strong there are lot of jobs available and people have to reassess what they pay, he said.