Abstract
Some employers are not obligated to pay at least minimum wages to all employees. U.S. farm employers comprise one of these groups. Employees of large farms and H-2A workers (lawfully admitted, nonimmigrant workers performing temporary or seasonal agricultural work) are protected by minimum wage legislation, while some migrant workers (often those paid piece rates) are exempt. U.S. agriculture also is characterized by a large percentage of unauthorized workers who may or may not earn above minimum wage. Following insights from dual labor market theory and from theories of the signaling capacity of the minimum wage, we compare labor market outcomes in the agricultural sector (where minimum wage coverage is limited) to low wage/skill non-agricultural sectors (where minimum wage coverage is more complete) nationally using data from the Current Population Survey. We then extend our analysis to a detailed state-level case study of agricultural workers in California using a representative survey of employed farm workers. Results suggest wage increases for covered workers that exceed those for uncovered workers, but insignificant differences in hours worked. This is the first study to our knowledge to examine the impacts of minimum wage coverage on agricultural workers relative to other workers for the U.S.
Highlights
Despite ongoing political discussion, the federal minimum wage has not increased since it became $7.25 in July 2009
We examine workers who are paid by piece rate and by time rate separately in addition to our full sample as these workers have differential minimum wage coverage by current labor laws for a case study corresponding to California agriculture [35]
We find that our wage results are robust to this alternative sample division as well. This serves as additional motivation for the extension that we present for the case of the state of California drawing from specialized agricultural worker data
Summary
The federal minimum wage has not increased since it became $7.25 in July 2009. We use data from the Current Population Survey (CPS) to test whether the minimum wage impacts agricultural workers, who are less likely to be covered, in a way that is different from workers who are in other low skilled sectors.
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