A Broken Baseline: How Flawed AEWR Policy Is Undermining U.S. Produce Farmers And What We Can Do About It

Across the country, fruit and vegetable farmers are sounding the alarm about rising labor costs. While producers have long managed the challenges of seasonality, perishability, and price volatility, a new and compounding threat is making it harder than ever to stay afloat: the Adverse Effect Wage Rate (AEWR). 

The AEWR is the minimum hourly wage that must be paid to H-2A guest workers—those legally hired from abroad to fill critical seasonal labor shortages on U.S. farms. Originally intended to ensure domestic workers were not displaced or underpaid, the AEWR has instead become an unsustainable cost escalator, disconnected from broader economic trends. Its rapid increase over the last decade is reshaping the economics of specialty crop production—and not for the better. 

New research led by Dr. Blake Brown, Professor Emeritus at NC State University, offers a sobering look at the real-world impact of AEWR policy. His analysis models an alternative scenario: What if AEWR increases had simply followed standard cost-of-living adjustments? The findings are clear -- our current wage-setting system is broken, and reform is urgently needed. 

AEWR: A System Set on Autopilot 

From 2012 to 2022, the national average AEWR rose from $10.36 to $15.56 per hour—a staggering 50% increase. Over the same period, Social Security cost-of-living adjustments rose by just 29%. Had AEWR tracked with government cost-of-living increases that are tied to the economy, it would have been $12.77 in 2022, not $15.56. That 17.9% difference represents more than just a wage gap—it signals a fundamental policy failure. 

What makes the AEWR especially problematic is the formula used to calculate it. Because it’s based on the USDA’s Farm Labor Survey, each year’s higher wages feed into the next, creating a feedback loop that drives costs up and up, regardless of inflation or market conditions. As Dr. Brown’s report notes, this results in a “self-perpetuating upward spiral,” particularly devastating for labor-intensive industries like fresh produce. 

What It Means for Consumers and Communities 

The impact of inflated labor costs doesn’t stop at the farm gate. Consumers, too, are affected. While the study estimates that lower AEWRs would have resulted in only modest price reductions for fresh produce—1.07% for fruit and 1.28% for vegetables—the ripple effect would have been profound. 

Lower prices mean greater access. Dr. Brown’s model shows that under a cost-of-living-aligned wages, Americans would have consumed 108 million more pounds of fruit and 251 million more pounds of vegetables in 2022 alone. That’s 359 million pounds of fresh, nutritious produce that could have ended up on American dinner tables -- many of them in households struggling to afford healthy food. 

Rural communities also stand to gain from more balanced labor policy. The economic modeling projects 25,744 new jobs and a $1.07 billion increase in annual economic activity under a cost-of-living-indexed AEWR. In Michigan alone, the benefits would have included 694 new jobs and $15.5 million more in farm output. These are not abstract numbers -- they represent real livelihoods, real businesses, and the vitality of real communities. 

Beyond the Farm: A Supply Chain at Risk 

The repercussions of AEWR inflation extend far beyond growers and farmworkers. A network of industries depends on a strong domestic produce sector. Fertilizer and chemical manufacturers, equipment dealers, packaging firms, transportation providers, wholesalers, and insurance companies are all linked to the health of fruit and vegetable production. 

According to the study, the top sectors beyond the farm that are impacted by inflated AEWRs include: 

• Support activities for agriculture and forestry 

• Agricultural chemical manufacturing 

• Wholesale nondurable goods 

• Real estate and insurance services 

• Petroleum refineries 

When U.S. growers cut back, so do these industries. Each dollar squeezed out of the farm sector through runaway labor costs weakens the supply chain and makes us more dependent on fruit and vegetable imports.  For a country focused on improving health, reducing food costs for consumers, and increasing food security, that’s a dangerous trend. 

What Reform Could Look Like 

The solution is not to slash farm wages. Farmers support fair pay for a hard day’s work. But the current formula isn’t fair, it’s punitive and economically unsound. It sets wage floors with little regard for inflation, productivity, or the actual supply and demand for farm labor. 

Dr. Brown’s recommendation is to index AEWR to the Employment Cost Index or another established economic indicator. This would provide a more rational, predictable framework for growers, protect workers from wage suppression, and ensure that policy keeps pace with broader economic conditions rather than outpacing them entirely. 

Such reform would bring guest worker wages back in line with the wage-setting practices used throughout the rest of the economy, while still safeguarding domestic workers from being undercut. It’s a common-sense fix with bipartisan potential and would support producers, consumers, and workers alike. 

Where We Go From Here 

At Protect Our Produce, we believe that the findings of this report should serve as a wake-up call. Specialty crop growers—from asparagus farms in Michigan to blueberry producers in Georgia and sweetpotato growers in North Carolina—are being pushed to the brink. AEWR policy, left unchanged, will continue to erode our domestic production capacity, accelerate offshoring, and diminish our national food security. 

This is not about cutting corners or avoiding responsibility. It’s about ensuring that a well-intentioned policy doesn’t destroy our farms and the very farmworkers it was meant to protect. It’s about restoring balance.