What Firms Hire H-2A Workers? Evidence from the US Ornamental Horticulture Industry

Abstract

The ornamental horticulture industry relies on workers to do myriad tasks, such as pruning, applying fertilizers, scouting, spraying pesticides, planting, harvesting, packing, and weeding. As a result of the perishable nature of horticultural goods, a skilled and accessible labor supply is imperative for continued industry growth and stability. The decreasing number of workers, followed by increasing wage rates, could be alarming for the economic well-being of the ornamental horticulture industry, which has already experienced a downward trend in revenue and profits. Combining 2014 and 2019 National Green Industry Survey data, this study investigates factors affecting ornamental growers’ decisions on hiring H-2A workers. Growers’ decisions are largely affected by their home state’s enforcement of the 287(g) program and the observed industry employment and total wage payment. Growers are more likely to participate in an H-2A workers program if their home state implemented the restrictive 287(g) program. Increasing industry employment of domestic workers will discourage participation in the H-2A workers program, but increasing industry wage costs will encourage participation. In contrast, individual firm characteristics play different roles in program participation and the number of H-2A workers hiring decision. Increasing farm sales value by $1 million merely increases the probability of hiring by a 0.1% point, revealing that large growers are the major beneficiaries of the H-2A workers program. After the participation hurdle is overcome, the number of H-2A workers hired is affected minimally by these factors. Our results suggest that the current H-2A program imposes a potential hurdle to participate, thus benefiting large growers.

Keywords

• h-2a program
• hiring decision
• hurdle model
• national green industry survey