Tighter farm labor market leading to rising wages

According to the 2012 Agricultural Census, contract and hired labor together accounted for 10 percent of U.S. agriculture’s total operating expenses. This share was much higher for some agricultural sectors: 40 percent for greenhouse, nursery and floriculture production; 39 percent for fruit and tree nut farming; and 27 percent for vegetable and melon farming.

Between 2014 and 2018, the average hourly real wage for nonsupervisory hired farmworkers (in 2018 dollars) rose from $12 to $13.25, an increase of 10.4 percent. This increase in the real wage for farm labor is the fastest experienced over a four-year period during the past two decades.

Growth in farmworker wages was faster than growth in non-farm wages. Over the period 2014-18, the hourly real wage for all nonsupervisory production workers outside agriculture rose from $21.90 to $22.97 (in 2018 dollars), an increase of 3.5 percent. In 2018, the farm wage was 58.5 percent of the non-farm wage, compared with 54.8 percent in 2014.