Monday, March 04, 2013
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Americans understand that farmers work hard, but for most, that's all they know. They don't know that farmers' work schedules are dictated by unpredictable weather and deadlines that don't budge (i.e. harvest, cows giving birth.) Family farmers don't work until the workday is done… they work until the work is done.
Illinois Farm Bureau has made battling this understanding one of its legislative priorities for 2013: Oppose legislation eliminating the overtime exemption for agricultural employers or implementing an inflationary increase in the minimum wage.
Currently there is a minimum wage bill in the Illinois Senate that would eliminate the overtime pay exemption given to farmers because of their unique needs. IFB's state legislation team offers a report about this proposal.
By Illinois Farm Bureau Legislation Team
An amendment to Minimum Wage Bill (SB 68 by Senator Lightford) has been introduced, which would increase the state's minimum wage and eliminate the exemption for overtime for agricultural labor.
Specifically, it will calculate Illinois' minimum wage by using a complicated formula of annual increases of 50¢ plus the rate of inflation until it reaches about $10.58. The goal, according to the sponsor, is to have an amount that is an inflation adjusted level equivalent to $1.60 in 1968. Once Illinois' minimum wage reaches $10.58, then the legislation allows for annual, automatic increases tied to inflation. IFB opposes Senate Amendment #1 to SB 68.
The bill also eliminates other business sector exemptions:
Illinois is already tied for fourth place in the country for having the highest minimum wage, which is currently $8.25. The highest is the state of Washington at $9.00. A $10.58 wage would move Illinois to the highest minimum wage in the country. Illinois' Midwestern neighbors currently have the federal minimum wage, which is $7.25.
This has been an issue since last year, when Senator Lightford pushed this same proposal. Senator Lightford has held monthly meetings since that time to see if there was "common ground" on her proposal. During these meetings, numerous issues arose and Illinois Farm Bureau was asked to provide information on family owned farms and farm employment in the state of Illinois. Specifically, IFB was asked several questions regarding the minimum wage issue and agriculture. The following are answers to the key questions that were asked:
Q: How many farms are in the State of Illinois?
A: According to the National Agriculture Statistics Service, in 2011, Illinois had 74,600 farms.
Q: What percentage of farms in Illinois are family farms?
A: According to the USDA Economic Research Service, in their "Structure and Finances of U.S. Farms: Family Farm Report" for year 2010, "most U.S. farms- 98% in 2007-are family operations, and even the largest farms are predominantly family run." The Census of Agriculture 2007 (which is conducted every 5 years) reported that 4% of Illinois farms are "incorporated" and that 88% of those are "family held." Less than 1/2 of 1% of all farms in Illinois are "corporations not run as family operations."
Q: How many employees do family farms typically employ? Of those employees, how many are typically not family members?
A: The 2007 Census of Agriculture reported that 16,000 Illinois farms (21% of all farms) employed "hired labor" for a total of 56,444 hired workers.
6,233 of these farms employed workers for more than 150 days, meaning they were regular hires and not seasonal hires. 3,003 of these farms employed one worker (4% of all farms) 1,559 of them employed two workers (2% of all farms) 1,009 employed 3 to 4 workers (1.3% of all farms) 662 employed 5 or more workers (just under 1 % of all farms).
In all, 8% of Illinois farms employed at least one worker for more than 150 days. We do not know the number of these workers that are "directly hired family workers," but we do know they were directly hired for pay, and not family members working for no pay.
Q: What percentage of family farm employees are part time vs. full time?
A: Of the 16,369 Illinois family-farms with "direct hired" employees, as reported in the 2007 Ag Census, approximately 10,000 only hired workers for less than 150 days each (62% of all farms with hired labor), approximately 3,000 only hired workers for more than 150 days (18% of all farms with hired labor), and the other approximately 3,300 hired both "less than 150 days" and "more than 150 days" workers (20% of all farms with hired labor).
Q: How many farm workers in Illinois are employed by farms that are not family owned?
A: Unknown. However, given that less than half of 1% of all farms in Illinois are "corporate farms not run as a family operation" (i.e., "corporate farms") it is unlikely that they employ more than a very small percentage of the total hired farm workers in the state.
During the discussions, it became clear theri one major misconception is that most farmers in Illinois are large corporate farms. The information above shows most family farms employ very few full-time employees, aside from the primary owner and operator. The majority of hired farm employees are seasonal workers who work four to six weeks during spring planting or fall harvest. They are hired with the understanding they must work at the whim of the weather. It was stressed that farmers cannot dictate when they work overtime. Depending on the weather, they may have to work day and night, possibly 80 hours a week, to get a crop planted or harvested during a small window of opportunity. Failing to do so can mean significant crop losses.
An additional reason for IFB's opposition is that farmers have no ability to recoup additional labor costs resulting from overtime or increased wage rates. The price for farm commodities is set by the futures markets. Farmers have no ability to significantly change the price they receive for their farm commodities. Unlike other businesses, farmers cannot raise the price they charge for their goods in response to increased labor costs. Increasing the wage rate or eliminating the overtime exemption would have significant negative economic consequences for farmers.
SB 68, Amendment #1 has been assigned to the Senate Executive Committee. IFB is opposed to Senate Amendment #1 to SB 68.
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