Overbearing Licensing of Farm Labor Contractors

Original post date: September 25, 2014
Article by: Dan Davy

According to a recent Institute for Justice study, Florida has the fourth most burdensome occupational licensure laws in the nation.  One of the many occupations Florida licenses is farm labor contracting. A farm labor contractor is anyone who employs other farm workers for a third party or furnishes employees to work under the supervision of a third party for a fee or other form of compensation.

Florida is one of nine states to require a license to operate as a farm labor contractor, and one of two states to require an exam to enter the profession. Florida also requires $160 in fees.

Florida has had issues with agriculture migrant worker conditions and labor trafficking. According to a 2013 report by Polaris, a non-profit focused on human trafficking, Florida has the 3rd highest number of human trafficking cases in the nation.   Some have argued for  using licensing of farm labor contractors to address this issue. Indeed, labor trafficking may call for some level of accountability through licensing.

Florida’s Department of Business and Professional Regulation (DBPR) is responsible for licensing  and regulating the occupation. While 48 states see no need to conduct competency testing for farm labor contractors, Florida tasks  DBPR with providing “a program of education and examination” for these workers. Ostensibly the examination ensures the contractor “is knowledgeable concerning the duties and responsibilities of a farm labor contractor.”

However, it seems unclear that the absence of government competency exams in the 48 other states has caused public health and safety concerns, nor quality problems. In the case of labor trafficking, it is unclear how our licensure-testing requirement eliminates the bad actors who willfully operate outside of the law and exploit labor. Such overreach in licensing requirements is a poor substitute for the broader enforcement and immigration reforms needed to prevent the exploitation of migrant workers. The private market seems to effectively self-regulate farm labor contractors’ level of service nationwide.

Florida’s farm labor contractors do benefit from their permitting and testing requirements, even if the public benefits are unclear or tenuous. Economists Morris Kleiner and Alan Krueger found that on average licensing boosts wages for workers by 15%. Since competition from other potential contractors is deterred by the licensing and testing requirement, higher prices are passed on to consumers increasing contractor incomes. Further, Kleiner and Krueger found that individuals in licensed professions receive a psychological boost because they tend to perceive themselves as more competent.

Do Florida’s entrenched farm labor contractors benefit from their licensing laws? Yes. Do they result in higher prices? Yes. Do they make it more difficult to enter the profession? Yes. Do they promote public health and food safety? Unlikely.

It is time to reexamine and reform Florida’s farm labor licensing and ensure a clear nexus with public health and safety. Florida should start by joining the 48 other states and eliminate the requirement for contractors to pass an examination in order to legally compete in the agriculture industry.

About DeVoe Moore Center

The DeVoe L. Moore Center is conducts economic research and policy analysis focused on state and local policy issues and is located in the College of Social Sciences and Public Policy at Florida State University in Tallahassee. As an educational institution the DMC provides professional research experience to undergraduate and master’s students through an extensive program of internships and independent study, preparing them for a future in public policy, economic development, public sector accountability and entrepreneurship.
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