Our View: OT law will prompt changes in Oregon ag

Published 6:45 am Wednesday, May 4, 2022

Oregon Gov. Kate Brown has signed legislation that will grant farmworkers overtime pay after 40 hours of work beginning in 2027.

Under the law, farmworkers will be owed time-and-a-half wages after 55 weekly hours of work in 2023, after 48 hours of work in 2025-2026 and after 40 hours per week beginning in 2027.

The legislation changes a farm pay formula that has stood for 84 years, and will lead to big changes for both employers and employees.

The Fair Labor Standards Act, passed by Congress in 1938, established a federal minimum wage and provided for overtime pay for work over 40 hours. The act also provided 19 job classifications, including farmworkers, that are exempt from the overtime rule.

Critics argue that the exemption was the product of racism and pandering to the needs of special interests — big, “corporate” farming concerns. Farmers of every scale note that farm work is distinct from factory production. The nature of most farm work makes it difficult to schedule in eight-hour days and 40-hour work weeks.

The economics of agriculture have not changed since 1938. Farmers are still price takers, not price makers, who cannot simply pass along higher labor costs to consumers the way retailers and manufacturers, though limited by the impacts of competition, do.

Gov. Brown acknowledged that the bill she signed is not perfect. She points out that the bill allows for a phase-in for overtime pay, a provision she says will give farm interests time to negotiate changes and improvements to the legislation.

No doubt farm interests will try to get the law changed. But, it seems unlikely there will be significant changes made. It is more likely that farmers and processors will use the grace period to find ways they can change their operations to reduce labor costs.

Mary Anne Cooper, vice president of government affairs at the Oregon Farm Bureau, said farm employees will also lose out when employers can’t afford to hire more workers or must offer workers fewer hours.

“We think this legislation will have devastating consequences for our family farms and their employees, will likely result in significantly reduced farm employment in Oregon and is really going to change the landscape of Oregon agriculture,” said Cooper.

Innovators are busy designing machines that can do intricate and delicate work such as picking fruit and pruning trees. Higher labor costs will hasten that effort.

Farmers who produce labor-intensive crops are also weighing the profit potential of growing crops that require less labor. Those crops generally are not as valuable as the labor-intensive crops, but for smaller producers the potential reductions in costs could make those crops more viable.

Inevitably, some farmers will decide that they can’t afford higher labor costs, increased automation or changes in their cropping plans. They will sell out to a larger operation that can.

We think everyone performing farm work should be paid as much as business conditions allow. But we know that mandating overtime won’t change the basic economics.