YOUR TURN: Plan to hike minimum wage puts NJ agriculture at risk
The Atlantic County Board of Agriculture wishes to express concerns regarding proposals to increase the New Jersey state minimum wage. Among the functions of this board is to advocate on issues that affect the viability of the agricultural industry. The majority of our board members are fruit and vegetable farmers growing primarily for the wholesale fresh market, which sources produce supplies based on availability and price. As such, the prices growers receive for their produce are determined by the demand, supply and costs associated with delivering those crops to market. However, because of the dynamics of “supply and demand” coupled with the perishable nature of fresh produce, growers are not able to arbitrarily raise their prices to “pass on” increased costs. The price a grower receives will always be contingent on market forces, not just locally, but from other regions of the country competing for the same buyers. The hope of remaining competitive, and thus profitable, has always relied on the ability to keep costs of production low and consistent with other regions of the country.
For production agriculture, labor cost has always been the single highest cost growers incur to produce and bring a crop to market. Forcing this expense to be disproportionately higher than other production regions will have disastrous consequences for Jersey farmers. Growers in states such as the Carolinas, Georgia and Alabama, among others, enjoy lower overall operating costs vs. the higher expenses inherent to New Jersey’s economy (e.g. taxes, insurance, etc.). In addition, the legislatures in those Southern states have recognized the vulnerability their farmers face with uncertain weather and erratic markets, and have in place separate, lower agricultural wages. Modern transportation and those lower production costs allow growers in those Southern states to easily undercut Garden State farmers. In addition, New Jersey growers are now also competing against produce from Canada and Mexico, which have muscled into Jersey’s traditional markets.
In this situation, New Jersey farmers already faced with an unfavorable marketing position may now be further encumbered by proposed higher wages that cannot be passed on to consumers without the potential to lose market share. Loss of that market share will result in Jersey produce becoming irrelevant in the marketplace and, with few exceptions, the viability of Jersey’s production agriculture may well diminish forever.
This scenario is inconsistent with other state policies that attempt to enhance New Jersey's third largest industry and with a general public that wishes to “buy local.” However, that “buy local” mentality only works if our produce is still available and comparable in price.
It should also be noted that, unlike other businesses, most fruit and vegetable growers provide housing, utilities, travel expense and other amenities for their employees to supplement the paid wage. These expenses are borne by farmers at no cost to their employees and constitute a significant value along with the paid wages to the farm workers. These additional benefits above the paid wage may possibly be unknown, unrecognized or ignored by some members of the Legislature who are calling for an across-the-board wage hike. Large, multistate businesses such as McDonald’s, Walmart and Home Depot do not provide these services for their employees. The value of these amenities within the terms of remuneration to our employees should not be lost in deliberations in determining any new minimum wage that would apply to agriculture.
In 2013, New Jersey voters passed a constitutional amendment enacting a yearly adjustment to the minimum wage determined by the Consumer Price Index, or CPI. New Jersey residents have also voted overwhelmingly to approve measures to protect and enhance New Jersey agriculture. The Atlantic County Board of Agriculture recognizes that support and the practicality of the CPI adjusted minimum wage. Now, we ask that the Legislature and Gov. Phil Murphy abide by the wishes of the voters and adhere to the existing formula in setting an agricultural minimum wage that will sustain the viability of New Jersey’s family farmers now and into the future.
This column was submitted by Jerome Irick, president of the Atlantic County Board of Agriculture, on behalf of the board.