Average hourly earnings rose sharply between 2011 and 2012, and the increase was even greater in the San Joaquin Valley, which has over half of the state’s farm workers . Housing emerged as a major issue. Farm employers wanted to provide housing or a housing allowance only to the W-3 workers who are tied to their farms, but S 744 requires farm employers to provide housing or a housing allowance to both W-3 and W-4 visa holders. U.S. workers employed alongside W-3 and W-4 visa holders would not have to be provided with housing or a housing allowance. The amount of the housing allowance depends on whether the farm employer is in a metro or non-metro county. In California, W-visa workers would receive $295 a month in metro counties and $225 a monthly in non-metro counties in 2013, or $1.84 an hour in metro counties for full-time workers and $1.40 in non-metro counties. Almost all of California’s labor-intensive agriculture is in metro counties. A new W-2 visa program would admit more low-skilled workers, with the number eventually determined by a Bureau of Immigration and Labor Market Research, located in U.S. Citizenship and Immigration Services. Its $20 million budget raised from fees on W-2 workers and their employers. The Bureau would be charged with determining the annual change to the W-visa cap, devising methods to help employers who use guest workers to recruit U.S. workers, creating a methodology to designate “shortage occupations,” and making recommendations on employment-based visa programs. In order to hire W-2 workers, U.S. employers in metro areas with an unemployment rate of less than 8.5% would register themselves and their jobs and request W-2 visas for specific foreigners. Foreigners’ families could also receive W-2 visas, which would be valid for three years. Up to 20,000 W-2 visas could be issued in the first year, 35,000 in the second year, 55,000 in the third year, and 75,000 in the fourth year, and the number could rise further if certain conditions are met. No more than one-third of W-2 visa holders could be employed in construction. Where will U.S. employers get low skilled W-visa workers? Mexico-U.S. migration has been declining,blueberry containers and more Mexicans returned to Mexico, often after being deported from the US, than were admitted in recent years .

A century ago, most of the state’s farm workers were Asians. A combination of longer periods of U.S. employment and the opportunity to bring family members may bring more Asians to the United States as guest workers.About three-fourths of the hired workers on U.S. crop farms were born abroad, and over half of all farm workers are not authorized to work in the United States. Although most unauthorized workers are employed in non-farm jobs, California has a higher-than average share of unauthorized workers than most other states . The state’s share of unauthorized farm workers is also higher than average, which explains why California farmers have been in the vanguard of those advocating for immigration reform. If S 744 is enacted with its current agricultural provisions, there are likely to be three major changes. First, the hired farm work force is likely to become mostly legal, comprised first of currently unauthorized workers who become legal blue card holders and later legal guest workers. Second, labor costs should be stable, since average hourly earnings in California are well above the minimum wage that must be paid to guest workers. Even if farm employers have to pay a housing allowance of up to $2 an hour, the $9.64 that must be paid to guest workers in 2016, plus a $2 an hour housing allowance, is less than the average hourly earnings of crop workers in California in 2012, which were $12.56 an hour. Third, S 744’s agricultural provisions should provide labor certainty for California farmers, and give them advantages over farmers in lower-wage areas of the United States. The capacity to hire legal guest workers for up to six years at $9.64 an hour, with wage increases limited to 2.5% a year, should make it easier to plan investments in labor-intensive agriculture and secure financing for them. California farmers should benefit by the switch from a national minimum wage for guest workers rather than state-by state wages. The current Adverse Effect Wage Rates that must be paid to legal guest workers in 2013 range from $9.50 an hour in some southern states to $12 in Oregon and Washington; the California AEWR is $10.74.

The agricultural provisions of S 744 benefit currently unauthorized farm workers at the expense of future guest workers. Currently unauthorized farm workers and their families can become legal immigrants and leave the farm work force within five years, while future guest workers will have lower wages and perhaps fewer protections than current guest workers. Farm worker advocates and farm employers negotiated the agricultural provisions of S 744, and both have said they will strongly resist efforts to change what they describe as a “delicately balanced compromise.” If enacted, they should provide California agriculture with a legal work force at current costs.California’s nursery and floral industry will feel the effects of the “housing bubble” and the economic recession following its 2007 “burst” for many years. These effects are evident throughout the industry, ranging from the production of plants and material to structural aspects of product distribution. While there are no readily available empirical studies of the demand for nursery and floral products, it is widely accepted that housing and consumer income are important determinants of their demand. Thus, the economic downturn beginning in 2007, characterized by increasing unemployment, reduced consumer incomes, decreasing home prices, shrinking equities and foreclosures, would be expected to adversely affect the demand for nursery products. This article uses industry data to outline industry changes and to speculate on some possible implications of these changes.The California floral and nursery sector’s ties to the real estate industry, and the unique nature of its crops, contributed to uninterrupted sales growth between 1993 and 2007. This growth continued despite the major challenges presented by shipping restrictions related to pests and diseases, increased competition from imported flowers, the impact of increased energy costs on production and transportation, limited and expensive water supplies, and less-than-ideal weather conditions. As a result of plunging house prices and recession, the combined sales of nursery and floral products dropped in 2008, 2009 and 2010 before recovering slightly in 2011.

Data from USDA’s annual publication, California Agricultural Statistics, indicate that nursery production and sales typically ranked third among all California crops , while floral crops usually ranked around tenth. When combined,best indoor plant pots nursery and floral production typically ranked second in value of production among all California crops. As shown in Figure 1, total sales of California nursery and floral crops increased steadily from $2.71 billion in 1995 to a record $3.97 billion in 2007. Sales then decreased to about $3.37 billion in 2010 before recovering to $3.69 billion in 2011. Nursery and floral products’ share of total California agricultural sales increased from 9.6% in 1995 to a high of 12.5% in 2002 and then, with the exception of 2006, decreased steadily to 7.8% in 2011. Combined sales of nursery and floral products dropped to fourth place among all California agricultural products in 2011, following dairy, grapes, and almonds. Nursery and floral products’ decreasing share of total California agricultural sales beginning in 2002 is due to two major factors. Most important, for most of the period from 2002 through 2007, the rate of growth for other agricultural products outpaced the growth for nursery and floral products. Then with the onset of recession, combined nursery and floral sales decreased while some other major California commodities enjoyed increasing sales. Annual nursery and floral product sales decreased 4.7% from 2007 to 2008, then decreased 9.0% from 2008 to 2009, and 2.2% from 2009 to 2010. Finally, combined farm level nursery and floral sales increased 9.5% from 2010 to 2011.Nursery and floral products take a variety of paths in moving from the California producer to final customers, depending on the product and the nature and location of the customer. Due to the bulky nature and perishability of the products, most of the channels tend to be relatively short. For example, some producers have established retail outlets adjacent to their growing operations, especially in urban areas. Nursery operations supplying inputs to other growers tend to deal directly, or sometimes through a sales intermediary. Even large multi-product retailers who deal through wholesalers and jobbers often receive shipments directly from the nursery producer. While farm level sales of nursery and floral products decreased in both absolute and relative terms, the most dramatic impacts of the recession and housing problems occurred at the retail level.

Increasing unemployment and reduced consumer incomes combined with increased competition from alternative outlets to make retail florists an “endangered species.” At the same time, a collapse in home building put substantial pressure on specialized farm and garden stores and retail nurseries. Data from taxable retail sales reports and the directory of firms licensed to sell nursery products help to outline the changes occurring. Retailers and Taxable Sales: The California State Board of Equalization reports sales by type of retail outlet and the number of outlets. There are two retail store types for which nursery and floral products are the major products sold: florists and lawn and garden equipment and supplies stores . An increasing share of nursery and floral products are sold in other store types such as supermarkets, big box retailers , and food and variety stores, but we have no measure of the breakdown of sales by product line for any retailers. Changes in store numbers and annual sales for California florists between 2000 and 2011 are dramatic . The number of California florists increased from 5161 in 2000 to a peak of 6427 in 2008 , with store numbers increasing in 2008 even as sales began to plunge. Annual florists’ sales decreased over 34% from 2007 to 2008, 41.9% from 2008 to 2009, and another 2.5% from 2009 to 2010. Total sales by California florists in 2010 were only 37.4% of their level just three years earlier in 2007. Large numbers of florists began closing in 2008, with total numbers decreasing 25.3% by 2011 . Sales for California lawn and garden stores increased from just over $2.06 billion in 2000 to a high of over $2.96 billion in 2007 and then decreased over 25.2% the next two years before increasing 2.4% in 2010 and 5.4% in 2011 . However, the number of lawn and garden stores increased each year from 2000 through 2011 even when total sales decreased. Note that average per store sales peaked for both florists and lawn and garden stores in 2006 , decreased and reached a low in 2010 and then recovered with increased sales per store of 6.6% for florists and 2.2% per store for lawn and garden stores. Firms Licensed to Sell Nursery Products: Firms must be licensed by the California Department of Food and Agriculture to sell nursery products in California and licensed firms are listed in the annual Directory of Nurserymen and Others Licensed to Sell Nursery Stock in California. The firms by category were tabulated for 2003 and 2011 in a previous report and data for 2013 were tabulated for this report. The data in Table 2 show a significant reduction in the number of retailers between 2003 and 2011 with a slight recovery in 2013. There were also less dramatic decreases in the total numbers of middlemen as well as landscapers and producers from 2011 to 2013. Changing sales and reductions in the number of firms producing and marketing California nursery and floral products point to some rather basic structural changes with implications for both producers and consumers. First is the sharp reduction in the number of California florists and their total sales associated with the recession. The number of florists in 2011 dropped 1629 from the peak of 6427 in 2008 while sales decreased $753.26 million from 2007 to 2010.California farm-level floral product sales reached a high of $1.036 billion in 2007. Sales then dropped to $1.015 billion in 2008 and further to $937.0 million in 2009 before recovering to $1.015 billion in 2010.