New analysis shows alternative wage calculation would create jobs, reduce imports, and boost rural economies

The NC Chamber released a new report, A Broken Baseline: The Flawed Economics Behind AEWR Calculations, detailing how the Adverse Effect Wage Rate (AEWR) in the H-2A visa program has increased at a pace disconnected from broader economic benchmarks, unintentionally accelerating offshoring of produce production, raising food prices, and hurting rural economies.

Authored by Dr. Blake Brown, Hugh C. Kiger Professor Emeritus at NC State University, the study models the economic impacts of indexing AEWR to the Employment Cost Index (ECI)– a widely used and more stable measure of wage growth – rather than the current compounding method. The data shows that had AEWR been indexed to ECI, the U.S. would have seen significantly more domestic food production, less reliance on imports and substantial job growth.

“This report confirms what North Carolina’s growers and rural leaders have long understood: the current AEWR model is misaligned with economic reality,” said Ray Starling, General Counsel of the NC Chamber and President of the NC Chamber Legal Institute. “Indexing AEWR to a more stable, transparent benchmark like the Employment Cost Index would not only protect farm jobs but also unlock over a billion dollars in economic growth—growth that would be felt first and foremost in rural communities. It’s time for a wage policy that supports both our food supply and the people who make it possible.”

Key Findings from the 2022-Based Model:

• $1.073 billion in total economic impact
• 25,744 jobs created nationwide, including 550+ jobs in North Carolina
• 518 million and 823 million pounds in additional domestic fruit and vegetable output
• 290 million pounds in reduced fruit imports and 474 million pounds in reduced vegetable imports

As part of its commitment to strengthening North Carolina’s business climate and rural economies, the NC Chamber commissioned this research to highlight the economic impact of current AEWR policy on U.S. fruit and vegetable production, farmers, and rural communities.

Read the full report here.