Wednesday, August 21, 2013

ACA will raise cost of farm labor--and therefore food

The New York Times reported today about the consequences of the Affordable Care Act (ACA) for the cost of farm labor and, in turn, the cost of food.  Sarah Varney's story is set in California, where farm laborers are typically employed year round rather than seasonally, as the case in many other places.  (Another post about year-round ag workers is here).  This means farm labor contractors cannot easily put the "workers on a 28-hour workweek like Starbucks, Denny's and Walmart are considering" doing to avoid the ACA mandate.  It also means that the contractors, who operate on very small margins--around 2%--will have to raise the prices they charge farms, which will in turn push up food prices.

Varney writes:  
Insurance brokers and health providers familiar with California's $43.5 billion agricultural industry estimate that meeting the law's minimum health plan requirement will cost about $1 per hour employee worked in the field.     
The minimum health plan under the new law will is expected cost about $250 a month in California’s growing regions, a premium which includes a high deductible--$5K a year.  With the following vignette, Varney explains why it is not feasible to pass this insurance costs onto the workers:  
On a recent morning, Jose Romero pulled weeds from a row of lush tomato plants. Mr. Romero, 36, arrived at the field around 5 a.m. and worked until sunset. Like many of the other workers in the tomato field, he was surprised to learn that his employer, Mr. Herrin at Sunrise Farm Labor, would have to offer him health coverage, and that he could be asked to contribute up to 9.5 percent of his wages to cover the costs. 
“We eat, we pay rent and no more,” Mr. Romero said in Spanish. “The salary that they give you here, to pay insurance for the family, it wouldn’t be enough.” 
There seems to be widespread agreement among agricultural employers, insurance brokers and health plans in California that low-wage farmworkers cannot be asked to pay health insurance premiums. 
On this point, Varney quotes a labor contractor, Chuck Herrin, the owner of Sunrise Farm Labor in Huron, California:  
He’s making $8 to $9 an hour, and you’re asking him to pay for something that’s he’s not going to use? 
The most intriguing part of this quote is the "something that he's not going to use" part.  Are Mr. Herrin's assumptions based on perceived cultural issues?  on the age and perceived health of the workers and their families?

Varney also notes the complication that immigration status poses for many of the workers because they may be in the country without papers.  As one farm labor contractor in Napa Valley noted, the workers are 
Nervous they’ll be tracked and then somehow the possibility of being identified, and the fear of being deported or not being allowed to work. It comes up all the time in conversations when we outline the choices.
Cross-posted to Legal Ruralism.

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4 Comments:

Blogger Christine Heinrichs said...

This is an excellent time to begin to address these other social problems. A system that depends on workers who have no voice and live in poverty is not justified by low food prices for consumers. Martin Luther King said: “We are called to play the Good Samaritan on life’s roadside… but one day we must come to see that the whole Jericho road must be transformed so that men and women will not be constantly beaten and robbed. True compassion is more than flinging a coin to a beggar. It comes to see that a system that produces beggars needs to be repaved. We are called to be the Good Samaritan, but after you lift so many people out of the ditch you start to ask, maybe the whole road to Jericho needs to be repaved.”

8/22/2013 10:30 AM  
Blogger Maria Whittaker said...

Interesting; does this article discuss the savings in reduced costs to society and our healthcare system from having insured workers who can maintain their health and other such savings that will result from having adequate health care for folks.

This sounds as if they just focus on the costs to the industry and not the costs to society at large as well as to the worker himself and his family.

What does sick people and lack of health care cost employers, us and our country today.

Thank you for sharing in this important issue.


8/22/2013 11:30 AM  
Blogger Maria Whittaker said...

Interesting; does this article discuss the savings in reduced costs to society and our healthcare system from having insured workers who can maintain their health and other such savings that will result from having adequate health care for folks.

This sounds as if they just focus on the costs to the industry and not the costs to society at large as well as to the worker himeslef and his family.

What does sick people and lack of health care cost employers, us and our country today.

Thank you for sharing in this important issue.

8/22/2013 11:30 AM  
Blogger Maria Whittaker said...

A quick email chat with JoAnn Lo, Executive Director of the Food Chain Workers Alliance, revealed that, as she stated: "Labor overall, and farm labor in particular, is such a small percentage of the total retail cost of food so while the ACA may increase the costs for a farm labor contractor, it should not impact the cost of food that much."

If this article has accurately reported the NY times piece, it seems the Times may be exaggerating the actual increase in costs as well as discounting the benefits which would be major.

8/22/2013 2:39 PM  

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