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Posts Tagged: foundation
Did California’s ag overtime law help farmworkers?
After AB 1066, ag workers see average hours, wages fall
Proponents of California's agricultural overtime law, AB 1066, have called it a victory for farmworkers, while critics have asserted that it will harm the very people it was designed to protect. New research by Alexandra Hill, UC Cooperative Extension specialist and assistant professor in UC Berkeley's Department of Agricultural and Resource Economics, shows that, on average, there has been a decrease in worker hours and wages.
Her estimates suggest that in the first two years of its implementation, California's farmworkers worked a total of 15,000 to 45,000 fewer hours and earned a total of $6 million to $9 million less on their weekly paychecks than they would have without this law in place.
In 2016, California passed Assembly Bill 1066, legislation that removed existing overtime exemptions for farmworkers in the Fair Labor Standards Act. The FLSA is the federal law that mandates many employment conditions, including overtime standards. In non-exempt industries, it requires that employers pay 1.5 times an employee's regular pay rate for any hours worked beyond 40 hours per week.
Prior to AB 1066, agricultural workers in California were entitled to overtime pay for hours worked beyond 60 hours per week, but AB 1066 changed this beginning in 2019. The law mandated a gradual phase-in (over four years) of reduced overtime thresholds (lowering the weekly hours threshold by 5 hours/week each year) until agricultural employees are subject to the same overtime standards as workers in other industries (40 hours/week).
Many farmers feared that this new policy would drive food prices up, push them out of business, or force a faster transition to mechanization. Most reported that they would reduce hours for individual workers to remain below the new overtime standards and avoid paying the higher rates.
However, media, advocacy groups, and others heralded the law as a major win for farmworkers, as it would provide workers with more fair compensation for long workweeks. While long-term effects of the law for farmers and farmworkers remain to be seen, Hill's work sheds light on the early effects of the law on worker hours and earnings.
Using worker-reported hours from the National Agricultural Workers Survey both before and in the two years after the law went into effect (2019 and 2020), economist Hill explored the effects of AB 1066. Overall, she finds that worker hours and earnings decreased as an effect of the legislation.
Her work highlights that the share of workers working 56–60 hours/week, just below the old overtime threshold, decreased by roughly half. Most of these workers shifted to working fewer hours; the share working 46–50 hours/week, just below the new (as of 2020) overtime threshold, increased by roughly one-third. She found similar reductions in worker earnings.
The share of the workforce with higher weekly earnings (between $600 and $800/week) decreased by roughly one-third, with most of these workers shifting into a lower earnings bracket of $400–$500/week. These changes in hours and pay are consistent with employers behaving as they claimed they would – by cutting hours to avoid paying overtime rates.
Hill notes that these decreases in average wages and hours may be positive for those who want more leisure time and may – due to shorter workdays and weeks – improve workplace safety. However, she also warns that this can be detrimental for “workers and their families who were depending on this lost income to cover living expenses (and who) may now need to seek out second employment opportunities, negating these other benefits and adding the inconvenience of traveling between jobs.”
To learn more about the effects of AB 1066 on California farmworkers, read the full article by Hill: “California's Overtime Law for Agricultural Workers: What Happened to Worker Hours and Pay?” online at https://giannini.ucop.edu/publications/are-update.
ARE Update is a bimonthly magazine published by the Giannini Foundation of Agricultural Economics to educate policymakers and agribusiness professionals about new research or analysis of important topics in agricultural and resource economics. Articles are written by Giannini Foundation members, including University of California faculty and Cooperative Extension specialists in agricultural and resource economics, and university graduate students. Learn more about the Giannini Foundation and its publications at https://giannini.ucop.edu.
Is inflation here to stay?
If energy price spikes and supply chain disruptions continue, inflation expected to persist
In January 2022, inflation reached its highest yearly increase at 7.5% in nearly 40 years. But are these high rates here to stay, or are they only a temporary symptom of COVID-19 and the recent supply chain-related disruptions?
Economists from UC Davis, Bar-Ilan University, and the London School of Economics analyzed financial markets that trade in the risk of inflation to show how expectations of long-term inflation have changed over the last year. They found that between November 2020 and November 2021, there was over a tenfold increase in the probability of average inflation lying above 3% over the next five years, suggesting that many expect inflation to persist.
Inflation, as measured by the Consumer Price Index (CPI), has risen dramatically over the last year. Gas prices hit a new all-time high in November 2021, with inflation for food at home, electricity, and new vehicles at 6.5%, 6.3%, and 11.8%, respectively, in December. Rising oil and natural gas prices, higher personal savings and increased consumer demand coming out of the lockdown, and a sluggish supply chain coming out of the pandemic may all be partially to blame for inflation over the last year.
As pent-up demand slows and supply chains adapt, their impact on inflation may also subside. But, if the energy price spike in response to the invasion of Ukraine persists and if supply disruptions continue, it could lead consumers to demand higher wages to increase their purchasing power.
“If companies raise prices in response to higher wage demands by workers, leading to further high expectations of inflation, further wage demands, and so on, then the United States could enter the wage-price spiral that is often at the heart of high and persistent inflation,” said Jens Hilscher, associate professor in the Department of Agricultural and Resource Economics at UC Davis.
To better understand the likelihood of long-term inflation, Hilscher and co-authors Alon Raviv, senior lecturer at Bar-Ilan University, and Ricardo Reis, A.W. Phillips Professor of Economics at the London School of Economics, looked to the financial markets that trade in contracts that pay off if inflation rises above a given cutoff (with one cutoff at 3% and another at 4% — both well above the Federal Reserve's target of 2% inflation per year). Assessing the payoffs of these two types of contracts allowed them to determine the probability of the average inflation being above 3% or 4% over the next five years.
They found that between November 2020 and November 2021, the probability of an average inflation of 3% jumped from 6.1% to 66.2%, while the probability of an average inflation of 4% rose from 1.6% to 14.1%, a dramatic increase.
Long-term inflation leads to higher uncertainty, making long-term planning harder for businesses and individuals alike. It also leads to lenders experiencing a loss in the real value of the money they are repaid. Over time, these factors lead lenders to charge higher interest rates to account for uncertainty and potential losses. In turn, access to credit will suffer.
Hilscher noted, “A central bank that is very committed to a stable inflation target can always bring inflation down, even if only by causing a recession. We will see over the next several months which risk the Fed perceives to be the greater threat to our economy.”
To learn more about the risk of long-term inflation, read the full article “Inflation Risks are on the Rise,” by Hilscher, Raviv and Reis published by UC Giannini Foundation of Agricultural Economics in ARE Update 25(3): 9–11, free online at https://giannini.ucop.edu/filer/file/1645718420/20317.
ARE Update is a bimonthly magazine published by the Giannini Foundation of Agricultural Economics to educate policymakers and agribusiness professionals about new research or analysis of important topics in agricultural and resource economics. Articles are written by Giannini Foundation members, including University of California faculty and Cooperative Extension specialists in agricultural and resource economics, and university graduate students. Learn more about the Giannini Foundation and its publications at https://giannini.ucop.edu.
Kenneth R. Farrell, former UC ANR vice president, dies
Farrell was born Jan. 17, 1927, in South Mountain, Ontario, Canada, and grew up on a small farm. After graduating high school, he became a high school teacher in a one-room school in Ontario. He went on to enroll in college at the University of Toronto–Ontario Agricultural College at Guelph, where he earned a bachelor's degree in agricultural economics. He later earned his master's degree and Ph.D., both in agricultural economics, from Iowa State University.
In 1957, Farrell joined UC Cooperative Extension, working on agricultural marketing and agricultural policy with the Giannini Foundation at UC Berkeley. He also undertook a variety of administrative assignments focused on strengthening Cooperative Extension. His work was punctuated the following decade by a year's study at the University of Naples (Italy) on a Fulbright Fellowship and several short-term assignments with the U.S. Department of Agriculture.
He left UC in 1971 to head the USDA Economic Research Service in Washington, D.C. In 1981, he left federal service to found the National Center for Food and Agricultural Policy at Resources for the Future in Washington, D.C. Funded by the Kellogg, Ford and Rockefeller Foundations, the center was a first-of-its-kind independent, nonpartisan group devoted to the analysis of national agricultural and natural resource policy issues.
In his role as a UC vice president from 1987 to 1995, Farrell oversaw the Agricultural Experiment Station, located on the Berkeley, Davis and Riverside campuses, and Cooperative Extension, located statewide in California counties.
“Ken Farrell was a person of rare integrity and courage,” said Henry Vaux, Jr., who served as associate vice president to Farrell. “His successful efforts to decentralize Cooperative Extension and to make the research and outreach activities of the Division of Agriculture and Natural Resources more seamless benefited California's citizens and its agricultural sector enormously. His leadership proved crucial in positioning the Division to remain effective in the subsequent era of declining resources.”
Over the course of his career he authored more than 100 professional papers and articles on his work in agricultural policy, natural resources, international trade and marketing. He received many honors, including elections as president of the Agricultural and Applied Economics Association in 1977 and as fellow in 1980. In 1992 he was elected fellow of the American Association for the Advancement of Science, and in 2004 his undergraduate alma mater, the University of Guelph–Ontario Agricultural College, established the Kenneth R. Farrell Distinguished Public Policy Lectureship in his honor.
“Ken was a leader among his peers. He always stood his ground,” said Gordon Rausser, Robert Gordon Sproul Distinguished Professor of Agricultural and Resource Economics and former dean of the College of Natural Resources at UC Berkeley.
In retirement, Farrell consulted for the U.S. Department of Agriculture and the World Bank, assignments that took him to Armenia, Georgia and Azerbaijan. He also organized “People-to-People” trips to study agriculture in Cuba, Peru, Chile, Australia and New Zealand, and two such trips to China.
Farrell's wife of over 60 years, Mary, preceded him in death in 2013. He is survived by six children, eight grandchildren and three great-grandchildren.
A memorial gathering in honor of Farrell will be held at Creekside Clubhouse, 1010 Stanley Dollar Drive, Rossmoor, Walnut Creek, at 3 p.m. on Saturday, March 8. In lieu of flowers, the family asks that donations be made to Heifer International (http://www.heifer.org), a charity focused on ending hunger and poverty and promoting food security, or to a charity of choice.
New technology offers hope for solving grapevine red blotch disease
The virus is of particular concern to wine grape growers, whose grapes must reach a certain sugar content level before they are suitable for winemaking.
"The most urgent research need now is to determine how the virus spreads," said Deborah Golino, UC Cooperative Extension specialist in the Department of Plant Pathology at UC Davis and director of the UC Davis-based Foundation Plant Services.
"Due to the distribution of the virus in many parts of the United States and evidence that it can be transmitted by grafting, we suspect that red blotch disease is widespread wherever grapes are grown," Golino said.
Golino encouraged vineyard owners and managers to evaluate their vineyards for red blotch disease as they would for any other viruses.
Symptoms include blotches of pink or red veins on green leaves in the fall, when grape leaves would normally be turning a uniform gold color. Growers also might notice that their grapes are slow to develop sugar levels sufficient for winemaking, with some grapes never fully maturing.
"If there are visual signs of red blotch, as well as poor sugar development, growers should test their vines for both red blotch and leafroll virus because the symptoms of the two viruses are so similar," Golino said.
She reported that red blotch disease has been identified among both young and mature grape vineyards in California, New York, Virginia, Maryland, Pennsylvania, Texas and Washington. A virus almost genetically identical to red blotch also was found in Canada.
While the virus, also called grapevine red blotch-associated virus or GRBaV, likely can be found in all types of grapes, including rootstock, and table and raisin grapes, it was first detected in wine grapes because they are carefully monitored for sugar content to determine harvest date.
Presence of the virus in a vine can be confirmed using an extremely sensitive laboratory test known as polymerase chain reaction, or PCR, to detect small amounts of genetic material. This analytical process uses an amplification technique that multiplies the existing DNA and similar genetic material to identify the virus.
"If the vineyard tests positive for red blotch, the grower needs to decide, from an economic standpoint, when is the best time to remove the diseased vines and replant the vineyard," Golino said. "This is always a complex decision, and there is no one-case-fits-all answer."
Golino said that the Foundation Plant Services' Classic Foundation vineyard block, used for producing disease-free scion and rootstock vines, has been partially tested and appears to have a very low-level incidence of red blotch virus. Only three of the 1,600 vines tested to date were found to have the virus. Testing of all of the vines in the Classic Foundation vineyard, the source of the majority of grapevine nursery stock in California, is slated for completion in the months to come.
"The good news is that our new Russell Ranch Foundation Vineyard block has been tested, and there is no sign of red blotch virus in any of those vines," Golino said. This vineyard is propagated exclusively with vines that have been through tissue-culture therapy to exclude red blotch and other viruses. Test records from the Foundation Plant Services vineyards are available at http://fps.ucdavis.edu.
Golino cautioned that many more new viruses and other microbes are likely to be found in grapevines in the next few years, thanks to powerful new DNA sequencing technology.
"Some of those will be disease agents, some beneficial, and some neutral," she said. "We will have our work cut out for us in understanding the role of these microbes, but the ultimate result will be increased ability to create superior vineyards."
"The appearance of red blotch virus underscores the vital importance of the Foundation Plant Services and adequate funding for USDA's National Clean Plant Network," said John Aguirre, president of California Association of Winegrape Growers. "Growers need clean plant material to meet winery demands for increased winegrape production and improved quality."
Golino said that progress on identifying and characterizing red blotch has been a collaborative effort between many university-based researchers over the years.
Red blotch disease was first recognized in 2008 in a Napa Valley vineyard by Jim Wolpert, a UC Davis-based Cooperative Extension viticulturist, and Mike Anderson, a viticulture researcher and manager of UC Davis' Oakville Experiment Station.
Two UC Davis scientists - Mysore Sudarshana , a U.S. Department of Agriculture researcher in the plant pathology department, and Maher Al Rwahnih, a researcher at Foundation Plant Services - teamed up in an effort to identify the virus causing red blotch disease. Al Rwahnih was an early user of next-generation, or high-throughput DNA sequencing technology.
During today's meeting, Golino announced that California rootstock nurserymen acted last week to assist the California viticulture industry with research addressing GRBaV. The California Grape Rootstock Research Foundation, which funds research to enhance California viticulture and the grape nursery industry, has agreed to provide seed money to jumpstart research on the virus.
More information on red blotch disease is available on the University of California Integrated Viticulture website.
Foundation Plant Services is a self-supporting unit of the College of Agricultural and Environmental Sciences at UC Davis. The service, dedicated to the distribution of disease-tested, true-to-identity plant materials produced by UC researchers, plays a key national and international role in distributing new crop varieties and healthy planting stocks.
About UC Davis
For more than 100 years, UC Davis has engaged in teaching, research and public service that matter to California and transform the world.
Located close to the state capital, UC Davis has more than 33,000 students, more than 2,500 faculty and more than 21,000 staff, an annual research budget of nearly $750 million, a comprehensive health system and 13 specialized research centers. The university offers interdisciplinary graduate study and more than 100 undergraduate majors in four colleges -- Agricultural and Environmental Sciences, Biological Sciences, Engineering, and Letters and Science. It also houses six professional schools -- Education, Law, Management, Medicine, Veterinary Medicine and the Betty Irene Moore School of Nursing.
Media contacts:
- Deborah Golino, Foundation Plant Services, (530) 754-8102, dagolino@ucdavis.edu
- Pat Bailey, UC Davis News Service, (530) 752-9843, pjbailey@ucdavis.edu
