Economist: Worker welfare is growing concern in dairy industry

posted Jan. 9, 2018 7:19 a.m. (CDT)
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by / Heidi Clausen, Editor |

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MENOMONIE — While worker advocacy groups have yet to target Wisconsin dairy farms, the impact of their efforts in other states will be felt here, according to Thomas Maloney, a senior Extension associate in the Dyson School of Applied Economics and Management at Cornell University who has worked extensively on issues related to the Hispanic agricultural workforce and immigration reform.

Speaking Jan. 4 at the Western Wisconsin Ag Lenders Conference in Menomonie, Maloney said worker advocacy groups are making inroads in his home state of New York, pushing dairy producers to offer employees higher wages and overtime pay, better housing and collective bargaining rights, and it won’t be long before dairy companies demand stronger assurances from farms that their workers are being treated fairly.

“The issues with milk companies will come here eventually. It will be a national issue,” said Maloney, who has been asked to sit on a new National Milk Producers Federation task force looking into worker welfare, similar to earlier efforts to improve animal welfare on farms. “We need to spend more time talking about worker welfare.”

Maloney concedes that there probably is room for improvement as far as worker treatment on certain farms, especially regarding housing, but advocacy groups such as Migrant Justice often go too far by lumping all farms together and saying they’re all bad actors. Groups have staged protests in recent months at farms and agribusinesses and shown up without notice at farmer meetings. Lawsuits have been filed on behalf of individual workers.

“They will find your weakness and keep exploiting it,” he said. “Advocates are good at finding safety or housing issues and making it a big deal, suggesting the whole industry has a problem vs. an individual farm.”

Among the expectations of advocacy groups are higher wages in general, better housing, mediation boards to give workers a voice, and improved hours. Some workers put in as many as 12 hours a day seven days a week, he said, but farmers are pushing back, saying their workers often demand those extra hours or they will leave.

Last June, farm worker advocates in New York dropped a “bombshell” report entitled “Milked,” calling for collective bargaining rights, overtime pay and a worker-led code of conduct and for consumers to hold Chobani and other dairy processors accountable for the farms from which they buy milk. Migrant Justice launched a Milk with Dignity campaign to secure the human rights of dairy workers and improve working conditions. Facing protests, Ben and Jerry’s last fall signed an agreement assuring that all its milk comes from farms on which workers are fairly treated. St. Albans Milk Cooperative supplies all milk to Ben and Jerry’s in Vermont.

This is just the beginning of a broader social agenda for which farmers must be prepared to react, Maloney said. Consumers, especially more affluent ones, are taking an interest in dairy farm workers and want to support companies that prioritize treatment of workers and animals. Efforts to include such claims in advertising already are appearing at stores such as Whole Foods.

Food companies such as Chobani and Ben and Jerry’s are embracing their social responsibility, and many have made it part of their mission, Maloney said, and when it comes to farm labor advocacy, this is a game-changer. Farmers have to be the ones who adjust, he said, because food companies cannot risk supporting farmers who are not “doing the right thing.”

“The farmer is going to have to listen to the market,” he said.

Ag poised for reform

Efforts to bring about meaningful reform in federal immigration policy continue, but it’s hard to say if anything will “get traction” this year, according to Maloney. Meanwhile, the labor supply is going down. Fewer Mexicans have been coming to the U.S. in recent years, as drug cartels have made border crossing much more dangerous and expensive, immigration enforcement has ramped up, the Mexican economy is performing well and Mexican birth rates have declined.

With more competition for workers between farms, labor costs are rising. Workers are well-networked and know what other farms are paying. There’s also strong competition in the general economy; the U.S. unemployment rate at the end of 2017 was 4.1 percent, and that’s projected to dip to 3.8 percent this year.

“At these levels, the unemployed are unemployable,” Maloney said.

Legal foreign-born workers are in high demand. Also, many states are raising their minimum wage and requiring overtime pay.

“This is hanging over the economy and will continue to be a real issue,” Maloney said. “In all of the years that I’ve been doing this, I have never seen a time when there were so many labor issues coming to the surface at the same time.”

If there’s some good news to report on the immigration reform front, he said, it’s that the ag industry is “very, very well-organized around this issue. Lobbyists are just waiting for an opportunity to support a bill that will be workable for ag. ... We know what we want and ag is ready to lobby for this at any point.”

Agriculture has two main demands of immigration reform — a guestworker program that includes dairy and other year-round workers and legalized status for undocumented workers. The U.S. Department of Agriculture has estimated that about half of the nation’s foreign dairy labor force is made up of undocumented/​illegal workers, but Maloney says it’s probably more than 90 percent in New York.

Fraudulent documents are largely to blame for this problem, he said, adding, “Hopefully, this will be cleaned up with policy.” Employees will be required to make sure their employees are here legally.

Maloney said many dairy farm owners say that they no longer can hire American citizens to work on their farms, and if not for Hispanics, they could not continue farming. This concern keeps a sense of urgency around reform efforts, but it has been a slow go lately. He shared a study showing that almost 70 percent of farms surveyed, milking an average of 170 cows, had at least 50 percent Hispanic workers, most of them undocumented.

Current reform proposals voted out of the House Judiciary Committee are the Ag Act, which creates a new H-2C Visa category, and the Legal Workforce Act, which makes E-Verify mandatory for all employers. Under the Ag Act, administration of the program would move to the USDA and a cap of 500,000 visas would be set, with the possibility of an increase. Workers could stay for 18 months (temporary seasonal) or 36 months (non-temporary work) and must stay out of the U.S. for 45 days before returning.

There are various options for unauthorized workers, but “if the workers don’t trust it and it’s not easy to use, the workers won’t use that,” he said. “If nothing else, it gives ag something to work with if it goes to the House floor.”

Some sort of guestworker program, which is “the way of the future and the way we make the pie bigger,” Maloney said, is the most likely solution. “Many people are pinning their hopes on this in terms of expanding the labor supply for ag.”

Foreign-born workers are viewed as the farm workforce of the future, and efforts to make each employee more valuable to the business will increase, Maloney said, but as labor costs rise, robotic milkers will be easier for more farms to justify. Robots allow small farms to become more efficient and expand without adding employees. While fewer workers may be needed, more highly skilled workers are required with mechanization.

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