Order Code RL32861
CRS Report for Congress
Received through the CRS Web
Farm Labor:
The Adverse Effect Wage Rate (AEWR)
Updated March 17, 2006
William G. Whittaker
Specialist in Labor Economics
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

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Farm Labor: The Adverse Effect Wage Rate (AEWR)
Summary
American agricultural employers have long utilized foreign workers on a
temporary basis, regarding them as an important labor resource. At the same time,
the relatively low wages and adverse working conditions of such workers have
caused them to be viewed as a threat to domestic American workers.
Some have argued that foreign guest workers compete unfairly with U.S.
workers in at least two respects. First, they are alleged to compete unfairly in terms
of the compensation that they are willing to accept. Second, their presence is alleged
to render it more difficult for domestic workers to organize and to bargain
collectively with management.
To mitigate any “adverse effect”for the domestic workforce, a system of wage
floors was developed that applies, variously, both to alien and citizen workers —
i.e., the adverse effect wage rate (AEWR).
This report deals with one element of the immigration issue: the question of the
use of H-2A workers. It introduces the adverse effect wage rate, it examines the
concerns out of which it grew, and it explains at least some of the problems that have
been encountered in giving it effect.
The report is based, statistically, upon the AEWR issued each spring by the
Employment and Training Administration, U.S. Department of Labor. It will be
updated periodically as new information becomes available.
The report is written from the perspective of labor policy, not of immigration
policy. For discussion of immigration policy, see the Current Legislative Issues
(CLIs) on the Congressional Research Service webpage.

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Contents
An Introduction to the AEWR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Mexican Guest Worker Utilization:
A Brief Historical Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Coping with “Adverse Effect” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
List of Tables
Table 1. Adverse Effect Wage Rate by State, 1990-2005 . . . . . . . . . . . . . . . . . . . 6

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Farm Labor:
The Adverse Effect Wage Rate (AEWR)
American agricultural employers have long utilized foreign workers on a
temporary basis, regarding them as an important labor resource. At the same time,
the relatively low wages and adverse working conditions of such workers have
caused them to be viewed as a threat to domestic American workers.
To mitigate any “adverse effect” for the domestic workforce, a system of wage
floors has been developed that applies, variously, both to alien and to citizen workers
— the adverse effect wage rate.
The AEWR deals specifically with agricultural workers (i.e., H-2A workers).
It involves persons “having a residence in a foreign country which he has no intention
of abandoning” and “who is coming temporarily to the United States to perform
agricultural labor” of “a temporary or seasonal nature” “...if unemployed persons
capable of performing such service or labor cannot be found” in the host country.1
An AEWR has been developed for each state (see table below) and is announced
early each year prior to the growing/production season.
An Introduction to the AEWR
Where countries with widely different economies exist side-by-side, the more
prosperous is likely to draw to itself workers from its lower-wage neighbors. Though
wages of American agricultural workers are low in comparison with wage rates in the
general economy, they are relatively high by the standards of neighboring less
developed countries. Thus, a continuing supply of workers has been available for
employment in the United States at wage rates and under conditions that American
workers, arguably, neither would accept nor, for economic reasons, could accept.
Mexican Guest Worker Utilization:
A Brief Historical Overview
Low-wage labor has entered the United States from a variety of countries and
under diverse circumstances. Indeed, importation of low-wage labor has been a long-
standing tradition.2 Here, our concern is with workers from Mexico — a primary
1 8 U.S.C. §§ 1101(a)(15)(H)(ii)(a) and (b). See also CRS Report RL32044, Immigration:
Policy Considerations Related to Guest Worker Programs, by Andorra Bruno.
2 There is an extensive literature on the continuing quest of certain American employers for
low-wage workers. See, for example, Roger Daniels, Asian America: Chinese and
(continued...)

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CRS-2
focus of U.S. agricultural labor policy. We are dealing with two migratory thrusts.
On the one hand, there are workers who, attracted by relatively higher wages in the
United States (or by other aspects of American society), have come north as
immigrants seeking permanent employment. Conversely, there has been a body of
workers who, responding to public policy, have been encouraged to come north —
not to seek citizenship but to provide employers with a continuing source of low-
wage labor and, at the end of a work period, to return to their country of origin.
These latter are the “guest workers” or “braceros.”3
In the late 19th and early 20th centuries, movement across the U.S.-Mexican
frontier was relatively unrestricted. Mexican nationals joined a resident Mexican-
American population in the fields and mines of the Southwest. With World War I,
workers from Mexico were recruited to offset the loss of American workers drafted
into military service. After the war, a secondary problem arose: how to get the
Mexican workers to go back to Mexico — an issue aggravated by the Great
Depression. Then, World War II broke out and America turned once more to Mexico
for low-skilled/low-wage labor. The result, in various forms, was the bracero
program.
By war’s end in 1945, agricultural employers had become accustomed to
employing Mexican labor that was characterized at the time as docile, non-union,
temporary, and payable at low rates while, at the same time, being able and highly
motivated. Through the process, a large body of Mexican workers had become
acculturated to the American world of work. Having learned at least fragmentary
English, they were able to function within the American system without the
institutional support of the formal bracero program. In short, some might argue, the
bracero program had been a training school for foreign workers operating outside the
normal immigration structure. The bracero/guest worker programs, however, were
also a source of contention, raising a number of socio-economic questions.
Opposition continued to grow until, in 1964, the program was terminated.
Even with termination, however, a body of foreign workers remained in the
United States — a force that was augmented by Mexican workers who crossed the
border without proper authorization. As American agricultural workers (many of
Mexican heritage) sought to improve their economic status through organization,
they were confronted by this alien workforce. Several dilemmas were posed. How
2 (...continued)
Japanese in the United States Since 1850 (Seattle: University of Washington Press, 1988);
Michael L. Conniff, Black Labor on a White Canal: Panama, 1904-1981 (Pittsburgh:
University of Pittsburgh Press, 1984); and Edward D. Beechert, Working in Hawaii: A
Labor History (Honolulu: University of Hawaii Press, 1985). For more recent experience,
see Peter Kwong, Forbidden Workers: Illegal Chinese Immigrants and American Labor,
(New York: The New Press, 1997); and Edna Bonachich, and Richard P. Appelbaum,
Behind the Label: Inequality in the Los Angeles Apparel Industry (Berkeley: University of
California Press, 2000).
3 U.S. agricultural workers can be divided into two groups: American workers and foreign
workers. Herein, American workers are either U.S. citizens or permanent residents, and are
distinguishable from foreign (alien, non-immigrant) workers who are in the country on a
temporary basis. Further, some foreign workers may be here “legally” — others, “illegally.”

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CRS-3
might the demand of agribusiness (and of certain other employers) for low-wage
workers be satisfied within the context of American labor-management policy and
without imperiling the economic livelihood of resident/domestic American labor?
And, as the ex-bracero community became a political force within the United States,
how might these sometimes conflicting objectives be achieved without offending this
new body of Americans?4
Coping with “Adverse Effect”
By mid-century, these concerns came to be addressed in immigration law. The
Immigration and Nationality Act of 1952, as amended, provides for admission to the
United States of a person “having a residence in a foreign country which he has no
intention of abandoning” and “who is coming temporarily to the United States to
perform agricultural labor” of “a temporary or seasonal nature” “... if unemployed
persons capable of performing such service or labor cannot be found in this
country.”5 Later, the act directs that a petition for admission of such persons (H-2A
workers) “may not be approved by the Attorney General unless the petitioner [the
prospective employer] has applied to the Secretary of Labor” for certification that:
(A) there are not sufficient workers who are able, willing, and qualified, and who
will be available at the time and place needed, to perform the labor or services
involved in the petition, and
(B) the employment of the alien in such labor or services will not adversely affect
the wages and working conditions of workers in the United States similarly
employed.6
If the requirements of paragraphs (A) and (B) are to be effective, they impose a heavy
policy burden and responsibility upon the Secretary of Labor.7
4 Joseph F. Park, in his study, The History of Mexican Labor in Arizona during the
Territorial Period (M.A. Thesis, University of Arizona, 1961), deals with early cross-
frontier labor migration and its impacts. More generally, see Mark Reisler, By The Sweat
of Their Brow: Mexican Immigrant Labor in the United States, 1900-1940 (Westport:
Greenwood Press, 1976); Otey M. Scruggs, Braceros, “Wetbacks,” and the Farm Labor
Problem: Mexican Agricultural Labor in the United States, 1942-1954 (New York: Garland
Publishing, 1988); Abraham Hoffman, Unwanted Mexican Americans in the Great
Depression: Repatriation Pressures, 1929-1939 (Tucson: The University of Arizona Press,
1974); Francisco E. Balderrama and Raymond Rodriguez, Decade of Betrayal: Mexican
Repatriation in the 1930s (Albuquerque: The University of New Mexico Press, 1995); and
Richard B. Craig, The Bracero Program: Interest Groups and Foreign Policy (Austin:
University of Texas Press, 1971).
5 8 U.S.C. §§ 1101(a)(15)(H)(ii)(a) and (b).
6 8 U.S.C. §§ 1188(a)(1)(A) and (B). Italics added.
7 The conditions under which H-2A workers may be employed are set forth in detail in 20
C.F.R. Part 655. The AEWR is only one small aspect of the H-2A program. For a
discussion of the program and of current issues, see CRS Report RL30852, Immigration of
Agricultural Guest Workers: Policy, Trends, and Legislative Issues, by Ruth Wasem and
Geoffrey Collver.

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CRS-4
Paragraph (A) focuses upon availability. Are there domestic American workers
who are “able” and “qualified” to satisfy the normally low or semi-skilled
requirements of temporary agricultural labor? Did Congress mean to have the
Secretary assess the skill and ability of each potential domestic agricultural laborer?
If not, then these qualifications are reduced largely to a single standard: willingness
to be employed. Even that measure can be complex. Must the potential worker be
“willing” to work at whatever wage an employer may be willing to offer and under
whatever conditions may exist — even if adverse?
Almost by definition, the H-2A worker is willing to accept a lower wage and
conditions more adverse than would be acceptable to most American workers. Thus
(following documentable recruitment efforts), a prospective employer can affirm that
American workers are unavailable and that he is only offering the H-2A worker
employment that American workers “don’t want and won’t accept.” In other labor
markets, however, some may argue, movement toward higher wages and improved
conditions could be expected to attract American workers.8
As part of his responsibility under paragraph (A), the Secretary of Labor has
developed a three-tiered wage rate requirement. The regulations state:
If the worker will be paid by the hour, the employer shall pay the worker at least
the adverse effect wage rate in effect at the time the work is performed, the
prevailing hourly wage rate, or the legal federal or State minimum wage rate,
whichever is highest...9
The AEWR is set forth by the Department of Labor (DOL), based upon data gathered
by the Department of Agriculture (DOA). DOA conducts a quarterly survey of the
wages of field and livestock workers throughout the United States. The AEWR,
then, is a weighted average of the DOA findings, calculated on a regional basis. It
is adjusted, each year, taking into account prior experience with the change of the
“average hourly wage rates for field and livestock workers (combined) based on the
USDA Quarterly Wage Survey.”10 The rate (see Table 1) is set for each state (except
Alaska for which no rate has been fixed). The AEWR has no direct effect where an
employer does not seek to engage H-2A workers. However, if he does engage H-2A
workers and subsequently locates and hires American workers, then he is required
to pay each group not less than the AEWR.
Paragraph (B) presents a more complex issue: i.e., demonstrating that
employment of H-2A workers “will not adversely affect the wages and working
conditions of workers in the United States similarly employed.” Many view the
8 Questions persist about possible farm labor shortages and the impact of foreign workers.
See CRS Report RL30395, Farm Labor Shortages and Immigration Policy, by Linda
Levine.
9 20 C.F.R. § 655.102(b)(9)(i). The regulations set out separate requirements if the worker
is paid on a piece rate basis. See 20 C.F.R. § 655.102(b)(9)(ii).
10 20 C.F.R. § 655.207(a), (b) and (c). Concerning the methodology for calculation of the
AEWR, see Federal Register, June 1, 1987, pp. 20496-20533, and Federal Register, July
5, 1989, pp. 28037-28051.

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CRS-5
AEWR structure as effectively setting a cap on the earnings of certain agricultural
workers. If domestic workers are not available at the specified rate, the employer is
allowed to employ foreign workers who, given the disparity in wage rates between
Mexico and the United States, will almost always be available at the AEWR.
The H-2A option provides agricultural employers with an alternative source of
labor and, in effect, expands the pool of available workers — enhancing competition
for available jobs. With that option open to them, agribusiness employers may have
no need to revise their recruitment and employment policies to make such
employment more attractive to American workers. Further, some may view the
availability of foreign agricultural workers as a device through which to deter trade
unionization of domestic agricultural workers and to preclude the necessity of
bargaining with domestic U.S. workers with respect to wages and conditions of
employment.

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CRS-6
Table 1. Adverse Effect Wage Rate by State, 1990-2005
(in current dollars and cents)
Statea
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Alabama
4.29
4.46
4.91
5.04
5.43
5.66
5.40
5.92
6.30
6.30
6.72
6.83
7.28
7.49
7.88
8.07
8.37
Arizona
4.61
4.87
5.17
5.37
5.52
5.80
5.87
5.82
6.08
6.42
6.74
6.71
7.12
7.61
7.54
7.63
8.00
Arkansas
4.04
4.40
4.73
4.87
5.26
5.19
5.27
5.70
5.98
6.21
6.50
6.69
6.77
7.13
7.38
7.80
7.58
California
5.90
5.81
5.90
6.11
6.03
6.24
6.26
6.53
6.87
7.23
7.27
7.56
8.02
8.44
8.50
8.56
9.00
Colorado
4.51
5.00
5.29
5.44
5.57
5.62
5.64
6.09
6.39
6.73
7.04
7.43
7.62
8.07
8.36
8.93
8.37
Connecticut
4.98
5.21
5.61
5.82
5.97
6.21
6.36
6.71
6.84
7.18
7.68
8.17
7.94
8.53
9.01
9.05
9.16
Delaware
4.89
4.93
5.39
5.81
5.92
5.81
5.97
6.26
6.33
6.84
7.04
7.37
7.46
7.97
8.52
8.48
8.95
Florida
5.16
5.38
5.68
5.91
6.02
6.33
6.54
6.36
6.77
7.13
7.25
7.66
7.69
7.78
8.18
8.07
8.56
Georgia
4.29
4.46
4.91
5.04
5.43
5.66
5.40
5.92
6.30
6.30
6.72
6.83
7.28
7.49
7.88
8.07
8.37
Hawaii
7.70
7.85
7.95
8.11
8.36
8.73
8.60
8.62
8.83
8.97
9.38
9.05
9.25
9.42
9.60
9.75
9.99
Idaho
4.49
4.79
4.94
5.25
5.59
5.57
5.76
6.01
6.54
6.48
6.79
7.26
7.43
7.70
7.69
8.20
8.47
Illinois
4.88
5.05
5.59
5.85
6.02
6.18
6.23
6.66
7.18
7.53
7.62
8.09
8.38
8.65
9.00
9.20
9.21
Indiana
4.88
5.05
5.59
5.85
6.02
6.18
6.23
6.66
7.18
7.53
7.62
8.09
8.38
8.65
9.00
9.20
9.21
Iowa
5.03
4.85
5.15
5.65
5.76
5.72
5.90
6.22
6.86
7.17
7.76
7.84
8.33
8.91
9.28
8.95
9.49
Kansas
5.17
5.20
5.36
5.78
6.03
5.99
6.29
6.55
7.01
7.12
7.49
7.81
8.24
8.53
8.83
9.00
9.23
Kentucky
4.45
4.56
5.04
5.09
5.29
5.47
5.54
5.68
5.92
6.28
6.39
6.60
7.07
7.20
7.63
8.17
8.24
Louisiana
4.04
4.40
4.73
4.87
5.26
5.19
5.27
5.70
5.98
6.21
6.50
6.69
6.77
7.13
7.38
7.80
7.58
Maine
4.98
5.21
5.61
5.82
5.97
6.21
6.36
6.71
6.84
7.18
7.68
8.17
7.94
8.53
9.01
9.05
9.16
Maryland
4.89
4.93
5.39
5.81
5.92
5.81
5.97
6.26
6.33
6.84
7.04
7.37
7.46
7.97
8.52
8.48
8.95
Massachusetts
4.98
5.21
5.61
5.82
5.97
6.21
6.36
6.71
6.84
7.18
7.68
8.17
7.94
8.53
9.01
9.05
9.16
Michigan
4.45
4.90
5.16
5.38
5.64
5.65
6.19
6.56
6.85
7.34
7.65
8.07
8.57
8.70
9.11
9.18
9.43
Minnesota
4.45
4.90
5.16
5.38
5.64
5.65
6.19
6.56
6.85
7.34
7.65
8.07
8.57
8.70
9.11
9.18
9.43
Mississippi
4.04
4.40
4.73
4.87
5.26
5.19
5.27
5.70
5.98
6.21
6.50
6.69
6.77
7.13
7.38
7.80
7.58
Missouri
5.03
4.85
5.15
5.85
5.76
5.72
5.90
6.22
6.86
7.17
7.76
7.84
8.33
8.91
9.28
8.95
9.49
Montana
4.49
4.79
4.94
5.25
5.59
5.57
5.76
6.01
6.54
6.48
6.79
7.26
7.43
7.70
7.69
8.20
8.47

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CRS-7
Statea
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Nebraska
5.17
5.20
5.36
5.78
6.03
5.99
6.29
6.55
7.01
7.12
7.49
7.81
8.24
8.53
8.83
9.00
9.23
Nevada
4.51
5.00
5.29
5.44
5.57
5.62
5.64
6.09
6.39
6.73
7.04
7.43
7.62
8.07
8.36
8.93
8.37
New Hampshire
4.98
5.21
5.61
5.82
5.97
6.21
6.36
6.71
6.84
7.18
7.68
8.17
7.94
8.53
9.01
9.05
9.16
New Jersey
4.89
4.93
5.39
5.81
5.92
5.81
5.97
6.26
6.33
6.84
7.04
7.37
7.46
7.97
8.52
8.48
8.95
New Mexico
4.61
4.87
5.17
5.37
5.52
5.80
5.87
5.82
6.08
6.42
6.74
6.71
7.12
7.61
7.54
7.63
8.00
New York
4.98
5.21
5.61
5.82
5.97
6.21
6.36
6.71
6.84
7.18
7.68
8.17
7.94
8.53
9.01
9.05
9.16
North Carolina
4.33
4.50
4.97
5.07
5.38
5.50
5.80
5.79
6.16
6.54
6.98
7.06
7.53
7.75
8.06
8.24
8.51
North Dakota
5.17
5.20
5.36
5.78
6.03
5.99
6.29
6.55
7.01
7.12
7/49
7.81
8.24
8.53
8.83
9.00
9.23
Ohio
4.88
5.05
5.59
5.85
6.02
6.18
6.23
6.66
7.18
7.53
7.62
8.09
8.38
8.65
9.00
9.20
9.21
Oklahoma
4.65
4.61
4.87
5.01
4.98
5.32
5.50
5.48
5.92
6.25
6.49
6.98
7.28
7.29
7.73
7.89
8.32
Oregon
5.42
5.69
5.94
6.31
6.51
6.41
6.82
6.87
7.08
7.34
7.64
8.14
8.60
8.71
8.73
9.03
9.01
Pennsylvania
4.89
4.93
5.39
5.81
5.92
5.81
5.97
6.26
6.33
6.84
7.04
7.37
7.46
7.97
8.52
8.48
8.95
Rhode Island
4.98
5.21
5.61
5.82
5.97
6.21
6.36
6.71
6.84
7.18
7.68
8.17
7.94
8.53
9.01
9.05
9.16
South Carolina
4.29
4.46
4.91
5.04
5.43
5.66
5.40
5.92
6.30
6.30
6.72
6.83
7.28
7.49
7.88
8.07
8.37
South Dakota
5.17
5.20
5.36
5.78
6.03
5.99
6.29
6.55
7.01
7.12
7.49
7.81
8.24
8.53
8.83
9.00
9.23
Tennessee
4.45
4.56
5.04
5.09
5.29
5.47
5.54
5.68
5.92
6.28
6.39
6.60
7.07
7.20
7.63
8.17
8.24
Texas
4.65
4.61
4.87
5.01
4.98
5.32
5.50
5.48
5.92
6.25
6.49
6.98
7.28
7.29
7.73
7.89
8.32
Utah
4.51
5.00
5.29
5.44
5.57
5.62
5.64
6.09
6.39
6.73
7.04
7.43
7.62
8.07
8.36
8.93
8.37
Vermont
4.98
5.21
5.61
5.82
5.97
6.21
6.36
6.71
6.84
7.18
7.68
8.17
7.94
8.53
9.01
9.05
9.16
Virginia
4.33
4.50
4.97
5.07
5.38
5.50
5.80
5.79
6.16
6.54
6.98
7.06
7.53
7.75
8.06
8.24
8.51
Washington
5.42
5.69
5.94
6.31
6.51
6.41
6.82
6.87
7.08
7.34
7.64
8.14
8.60
8.71
8.73
9.03
9.01
West Virginia
4.45
4.56
5.04
5.09
5.29
5.47
5.54
5.68
5.92
6.28
6.39
6.60
7.07
7.20
7.63
8.17
8.24
Wisconsin
4.45
4.90
5.16
5.38
5.64
5.65
6.19
6.56
6.85
7.34
7.65
8.07
8.57
8.70
9.11
9.18
9.43
Wyoming
4.49
4.79
4.94
5.25
5.59
5.57
5.76
6.01
6.54
6.48
6.79
7.26
7.43
7.70
7.69
8.20
8.47
Source: Compiled from data provided by the U.S. Department of Labor, Employment and Training Administration. See Federal Register, Feb. 26, 2003, pp. 8929-8930; Mar. 19, 2003,
p. 13331; Mar. 3, 2004, pp. 10063-10065; Mar. 2, 2005, pp. 10152-10153; and Mar 16, 2006, pp. 13633-13635.
a. The U.S. Department of Agriculture does not calculate an AEWR for Alaska.

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