Business Insider

Higher pay and legal compliance may lead to lower costs for migrant work

Henry Ford did something revolutionary for his workers in 1914. He increased their minimum pay from $2.34 for a nine-hour day to $5 for an eight-hour day.

This was twice the market rate. Ford figured the higher wages would help his workers buy his cars. Also, he would not have as much turnover, because it was hard to screw in Bolt C into Bracket D for nine hours each day for little pay.

Increasing the pay ended up to be a smart move: Ford made more profits.

Today, several million migrant farm workers have left their homes to plant, harvest and pack fruits and vegetables in the U.S. Many workers have solid agricultural skills complemented by a strong work ethic. They need the money to support their families.

Many earn below the 2016 federal poverty level of $11,770 for single people. Many H-2A agricultural guest workers, and especially illegal immigrants, face harsh working conditions such as poor housing, disregard of labor laws, OSHA violations and poor educational opportunities.

The Idaho Department of Labor’s Farmworker Services can help workers with career guidance, job referrals, job search workshops, information on community resources and ways to file complaints about working conditions and minimum wage, overtime and child labor violations. The Idaho Farm Labor Contractor Registry supports legal compliance through communication and enforcement. National programs supported by the Migrant and Seasonal Agricultural Worker Protection Act exist as well.

If a registered contractor is legally compliant, that still might not be enough to enhance working conditions, reduce turnover and increase profits. Just as assembly work was with the Ford Motor Co. in 1914, picking crops involves tedious tasks that are hard to sustain for a full day, each day. The minimum wage, on the surface, seems to save money: lower pay, lower costs. But increasing the pay can bring about a more stable, motivated and productive workforce — a big cost saver.

This may be Compensation 101, but the mythology of keeping pay low to save money might be just that — mythology.

By the way, Henry Ford did not invent — but did contribute to — letting workers have Saturdays off, thereby creating a weekend.

Gundars Kaupins is professor of management, College of Business and Economics at Boise State University. This column appears in the July 20-Aug. 17, 2016, edition of the Idaho Statesman’s Business Insider magazine as part of a special section on agriculture. Click here for the daily Statesman e-edition, including Business Insider (subscription required).

Related stories from Idaho Statesman