The State Of Labor In The Greenhouse Industry
Ask any grower for thoughts on the state of labor today and you are bound to get an earful. While some people blame government crackdowns on immigration, others point the finger at lazy, over privileged Americans who would prefer not to get their hands dirty. But, there is one thing everyone agrees on: It isn’t getting any better.
Although organizations like the American Nursery & Landscape Association (ANLA) and Society of American Florists (SAF) lobby year after year in favor of reforms to make it easier to hire foreign-born workers, the process is a slow one, and growers can’t afford to be shorthanded during peak production times.
Some companies have implemented mechanization or automation to fill their employee gaps and lower payroll costs. Technology presents a viable option for those able to achieve a timely return on investment; however, it is easy to overinvest and rack up unnecessary debt.
Operations like Willoway Nursery in Ohio play it safe by working within the confines of the H-2A program, as this prevents them from losing a hoard of undocumented workers when immigration and customs officials conduct worksite audits, but the program is expensive and full of hassles.
All of these factors helped shape the current state of labor. Now, with their eyes toward the future, growers, advocates and suppliers react to these causes and the present situation and explain their ideas for improving labor for future generations.
The Rise Of Foreign-Born Labor
In the past, the greenhouse workforce was comprised of American families who built up their own operations. The reliance on foreign-born labor was minimal. Nowadays, greenhouse operations rely more heavily on immigrant labor, with the majority of these workers coming from Mexico. So, what caused the cultural shift from a primarily homegrown to a primarily foreign-born workforce in our industry?
ANLA’s Craig Regelbrugge, who acts as co-chairman of the Agriculture Coalition for Immigration Reform, says there are several reasons.
“This foreign-born labor force is a critical resource in our industry, and I think the way the labor situation is different from a decade or two ago is a matter of degree,” he says. “There are several explanations. If you talk to individual growers, you might get blunt answers like, ‘Americans have gotten lazy’ or ‘They are too privileged.’ You will get any number of answers like, ‘If we got rid of welfare and were less generous with unemployment, maybe people would be willing to do whatever work is available,’ but those things aside, there are several things that are indisputable and have changed over the past few decades.”
One of the factors involves trying to entice an increasingly urban population to return to the rural areas where the farming generation settled. In addition to shedding their rural roots, the (significantly smaller) next-generation workforce displays a bias toward white-collar careers.
“Even as the baby boom generation moves into retirement age in droves, the next generation following it is a third smaller numerically, so you have a population shift that is kind of playing out in slow motion,” Regelbrugge says. “In addition to that, few people are entering the workforce with less than a high school education, and record numbers of people have graduated from college. All of these factors have helped frame why folks who weren’t born here have filled a lot of niches in our economy, including in our industry.”
Willoway Nursery’s Tom Demaline agrees American interest in manual labor jobs has been declining for some time.
“As much as you don’t want to criticize the American workforce, they don’t want to do general labor work,“ Demaline says. “They don’t want to work outside or in a greenhouse where it could be 100°F or higher in the summer. They really don’t want to do physical labor. It basically has been beaten into their heads that it is demeaning and if you aren’t sitting in front of a computer screen, you aren’t doing anything.
“The downside of this industry is that it is a seasonal job. In some cases you can’t blame the worker for not wanting the job because it is short-term. How do you raise a family or have a dependable income when you only work for six or nine months?”
The Great Labor Shortage
While the changing face of the greenhouse laborer means operators must recruit additional labor from outside the U.S., difficulty finding an adequate supply of immigrant workers is a recent problem. Again, several causes have contributed to the shrinking labor pool.
“The way I would frame the path forward is to say there are changes going on in other countries,” Regelbrugge says. “Recent data show net migration with Mexico is at zero or even negative, meaning there might be more people leaving than coming. Mexico, as a nation, is going through a major demographic transformation itself.
“Our birth rate in the U.S. is said to be at about replacement level at 2.1. Mexico’s birth rate used to be very high, but it has fallen to where it is just a little bit above ours at 2.4. There is going to be less surplus population growing up in Mexico in the future,” he says. “Another current reality is that the Mexican economy is improving. Maybe not as fast as some people would like, but the fact is that over time, labor scarcity, particularly with respect to Mexico but even beyond that, is going to be a big deal.”
Another problem surfaces around high numbers of undocumented workers entering the greenhouse industry, only to be let go following worksite audits.
“Even though some people say there are enough sources of labor, the question is: Are the workers documented or not?” Demaline says. “There is a high risk of having an illegal workforce. Even if you’ve done everything correctly as far as the government is concerned — in terms of having your I-9s filled out and your i’s dotted and t’s crossed — your workforce may still be undocumented, and in an I-9 audit, you could lose them.”
One grower who encountered a similar situation is Carole Barton, co-owner of Barton’s Greenhouse & Nursery in Alabama, one of the states that passed strict state laws in order to keep agriculture jobs in the hands of American workers or authorized aliens. Barton lost seven workers with a combined 55 years of experience when her operation was required to e-Verify the documents her workers provided (read more of her story in GROW In Action on page 20). Unfortunately, according to Regelbrugge, this situation is fairly common.
“When audits happen, the typical result is that the employer is found to be in complete compliance with the current law, but they get a letter from Immigration and Customs Enforcement (ICE) called a notice of suspect documents,” he says.
“This is where federal officials have taken your records and gone through them to determine which employees have presented false documents.
“The way that movie ends is you get a list of employees you have to terminate. Many times it is anywhere from 30 to 50 percent of a company’s payroll. You have to summarily kick the career laborer out of your business. And these workers aren’t being deported — they are going down the street and working for your competitor.”
Guest Worker Programs Work Against Employers
The alternative, of course, is to participate in a government-sponsored guest worker program like H-2A. Those who opt to go this route are required to recruit and hire capable and willing locals before filling open spots with guest workers, and there is never a shortage of help around the greenhouse. Sounds ideal, right? Demaline disagrees.
“The problem with the program is that it is a bureaucratic nightmare, with a million trip wires from start to finish,” he says. “It starts as soon as you begin the application process — December for us — and the guys cross late February, early March, depending on how much red tape we have to deal with. It’s a daily monitoring process, and the government is adversarial in helping anybody using its guest worker program.”
Add in the huge cost burden and the disadvantages nearly outweigh the perks. Because program participants are required to pay the adverse effect wage rate, which is calculated on a state-by-state basis, some operations are paying their workers significantly more than others. For Demaline, the going rate for 2013 is $11.74, a full $4 higher than minimum wage in Ohio, a couple dollars more than states like North and South Carolina and a slight increase from the industry average of $10 to $10.50. The added costs also come in the form of recruiting fees, consulate fees and the cost of transportation from Mexico to Ohio and back. Those who use H-2A must also provide housing for the workers.
“With the increased scrutiny on immigration, you run a huge risk of having undocumented workers and losing part of your workforce,” Demaline says. “That is why we went to the H-2A program 15 years ago. The risk was too big if [ICE] came to the nursery in April and said, ‘You have to lose your workforce.’ It would put us out of business, so even though the program is harder to use, it was a better insurance policy to take the high road.”
The Automation Option
From shortages to costly programs, many growers have turned to automation and mechanization to slice their payroll numbers. And mechanization is more than just adding sophisticated transplant lines. It can also come in the form of POS software or improved workflow processes that streamline production. Cherry Creek Systems’ Chris Lundgren is one supplier who has witnessed this shift in mentality.
“The last few years, I have seen quite a few more people embrace automation,” he says. “I definitely think there has been an increase in wise labor spending. The labor pool has thinned out to the point where the people they are getting are not consistent and not dependable, so they are putting money into machines that will take their places. People are investing a bit more money on machinery and are trying to cut out that top-dollar labor number.”
Although Cherry Creek Systems’ sales numbers for the irrigation equipment it specializes in have remained relatively stable, Lundgren says small- and medium-sized operations have become bigger players in the automation game.
“The customer base is starting to realize they have to automate in order to compete anymore,” he says. “A lot of mid-level managers who were in charge of making sure the workers water the plants are now in charge of the watering. What that says is that instead of being behind a hose, operators want employees to multitask more. Automation allows you to do that.”
But, top-of-the line automation systems aren’t for everyone. While Blackmore Company’s David Steiner sees people moving toward low-cost machinery, like the Punch ‘N Gro system, for quicker planting, he doubts growers will stop relying on significant amounts of human labor.
“I think if growers can get the labor and it is not too expensive, they will use the labor instead of the equipment,” Steiner says. “They would rather hire a bunch of laborers than spend millions of dollars on automated benching systems. There has to be a return on investment for the equipment.”
At Willoway Nurseries, however, Demaline believes the company’s long-term success depends heavily on reducing the burden of skyrocketing labor costs. To stay profitable, the company is currently testing pot-moving robots with the hope of reducing its reliance on the H-2A program.
“We are still in the infancy stage of working with robots, but we believe in the process of mechanization,” Demaline says. “With nurseries and greenhouses in a mature marketplace, the only way you are going to reduce costs and remain competitive — because you don’t have the ability to raise prices — is to continue to take costs out. Robotics is one of the only ways you can do that. If you look at any other industry, car manufacturing or anything else, robotics is where it’s at. These industries are taking costs out with mechanization.”
As growers like Demaline realize the benefits of robots over workers and invest in systems to streamline workflow, Lundgren cautions against moving from one extreme to the other too quickly.
“Automation is going to help you with saving labor dollars, but it is an investment where the return has to make sense for you,” he says. “The advice I have for small growers is to start small and grow into your shoes. I see guys that buy the Cadillac of all booms and get every automation system they can imagine, and unfortunately you see those guys two or three years down the road auctioning off everything. Embrace change, desire better but start small.”
Fixing The Future Of Immigration
Still, no matter how advanced the industry becomes, the need for labor will never diminish entirely. Even large-scale operations outfitted with the most advanced technology require workers to run the machines and ensure the operation is producing high-quality crops. This means the issues surrounding immigrant labor need to be resolved.
“A lot of the activity on the advocacy front has been to try to protect the limited programs we now have from assault, if you will, by hostile federal agencies like the Department of Labor,” Regelbrugge says. “At the same time, we are working with Congress to get decent immigration reform passed.
“That has been the quintessential example of this being a marathon, not a sprint. Here we sit with the 10 or 15 year history mostly looking negative, but we have had very broadly supported bipartisan legislation.”
Regelbrugge is optimistic the current politcal alignment may lead to positive action on immigration policy.
“On the better side of things, I think we as an industry have really matured in our thinking. We have become very cohesive on this issue, with most companies and the organizations seriously engaged in the advocacy work all pulling in the same direction for the same thing,” Regelbrugge says. “As far as the political education on the nature of the problem and what the solutions might look like, I think we have come a long way, and that is a positive.”