The Department of Labor recently released full fiscal year usage data for the H-2A program. With agriculture’s ongoing struggle to recruit domestic workers and a very tight U.S. labor market overall, H-2A program usage reached new highs again in fiscal year 2023 (October 2022-September 2023), though the rate of growth was down considerably from last year.
“As wage rates continue to rise along with the demand for farmworkers, farm families are being forced to take a hard look at their balance sheets just to stay afloat,” said AFBF President Zippy Duvall. “Farming and ranching is a labor intensive business, and many of our crops require skilled labor to plant, tend and harvest. But margins remain slim on the farm. This data shows how important and urgent it is that we get a workable fix for the H-2A program and the AEWR.”
H-2A growth slows, but remains strong
As highlighted in the recent article, 2024 H-2A AEWRs On Their Way (Up), the U.S. labor market remains very tight, with an unemployment rate that averaged 3.6 percent in fiscal year 2023, so it shouldn’t be a shock that usage of the H-2A program remains high.
In fiscal year 2023, DOL certified 378,513 H-2A positions, an increase of 2 percent over fiscal year 2022. This relatively small increase followed a very large increase in fiscal years 2021 and 2022, when the number of certified positions increased by 15 percent and 17 percent, respectively.
Over 100,000 (103,083) more positions were certified in fiscal year 2023 than in fiscal year 2020, despite an increase of nearly 19 percent in the national average Adverse Effect Wage Rate (the minimum wage employers who participate in the H-2A program are required to pay). This increase in required wage rates has caused labor to be one of the costliest parts of doing business.
The top 10 states for H-2A program utilization in fiscal year 2023 mirrored fiscal year 2022’s top 10. From the largest number of certified positions to the smallest the top 10 states were: Florida (51,987), California (40,758), Georgia (37,536), Washington (35,680), North Carolina (26,146), Michigan (15,094), Louisiana (13,167), Texas (12,076), Arizona (11,301) and New York (9,919). These top 10 states, account for two-thirds of all certified positions.
From the H-2A Disclosure Data for fiscal year 2023, we know that the number of certified positions increased in 37 states and decreased in 14 of the 51 states and territories. This was down from fiscal year 2022, in which there were increases in 48 states, no change in one and a decrease in two of the 51 states and territories.
Despite a national growth rate in certified positions of just 2% percent, 11 states and territories had double-digit growth rates in fiscal year 2023 compared to fiscal year 2022.
It is also worth noting that in addition to growth in the number of certified positions in fiscal year 2023, there was also a 10.5 percent increase in number of H-2A applications that were filed. This suggests that the number of operations that are utilizing the program is also growing, rather than the growth coming strictly from existing operations. The average number of certified positions per application in fiscal year 2023 was 20, which is down two positions from fiscal year 2022.
This new record usage of the H-2A program was in spite of a record-high U.S. Adverse Effect Wage Rate — the rate most users of the program pay workers. In calendar year 2023, the U.S. average AEWR was $17.55, up 6.8 percent from 2022. The 2024 AEWRs were revealed on Nov. 22 when USDA released the Farm Labor Report . At $17.55, the national average 2024 AEWR breaks the previous record by 93 cents per hour. Read more of our analysis of the 2024 AEWRs here.
The incredibly tight labor market is taking its toll on businesses across industries. Continued growth in the H-2A program across a wide geography, despite rapidly accelerating AEWRs, is a strong indication that the U.S. agricultural sector has been particularly hard hit. For a growing number of operations, the H-2A program is the only viable option for staffing their seasonal on-farm jobs.