Sales of higher-end wines are making North Coast winegrapes a hot item, but availability of workers to pick them has fallen sharply, driving wages higher, according to a large vineyard owner in the region.
The average number of unskilled workers employed locally during the peak season of vineyard activity — generally, harvest — has fallen by about 50 percent in the past five years, while average wages for such jobs in that time have risen by almost the same proportion, said Eric Pooler, vice president for winery relations for Napa-based Silverado Investment Management Co., at North Bay Business Journal’s Wine Industry Conference in Santa Rosa on April 28.
This comes, he said, as several national, statewide and local forces are pulling on the North Coast winegrape workforce: tighter U.S. border security and immigration enforcement, ever-higher cost of living, competitive pay in other crops and industries, and new state labor rules that increase employer costs.
‘PRETTY STEADY DECLINE’
Based on informal conversations with vineyard-management companies, Pooler said he found the weighted average number of unskilled employed per firm slid to 128 in Napa County last year from 160 in 2012. In Sonoma County, it was a more precipitous drop, to 63 from 135.
“It’s a pretty steady decline across Napa and Sonoma counties,” Pooler told the conference audience of about 325. His company owns 21,000 acres of vines in California, New Zealand and Australia, including about 5,000 in the North Coast. “As the labor market’s tightened, employers are looking farther and farther away.”
DECLINING EFFICIENCY, RISING WAGES
To fill gaps in the field crews, farm labor contractors are having to bus in workers two to three hours, from Sacramento and San Joaquin counties in the Central Valley, he said. But with the longer commutes for harvesters are coming longer times to complete the same tasks.
“Experience levels are going down, so you’re getting less efficiency from your workers, because they don’t have as much experience in grapes,” he said.
This scarcity has been driving wage growth in Napa and Sonoma counties roughly 10 percent a year, Pooler said. Growers he talked to paid an average of $14.50 an hour for harvest help last year in Napa County, up from $10.75 five years before. In Sonoma County, the average was $13.50 last year, up from $9.75. So far this year, Napa Valley growers are paying $15–$16, and Sonoma County isn’t far behind, he said.
By comparison, California’s minimum wage rose to $10 last year from $7.50 in 2012. It went to $10.50 on Jan. 1 and is set to rise to $15 by 2022–2023.
“As workers are gaining leverage, their pace has slowed up, so the return on dollars is not as high as it has been in the past,” Pooler said. “If this pace continues, they’ll be making $20 by the time minimum wage reaches its peak, which is a huge cost to cover, if you’re a grower. Whether wineries will be able to come up with that in terms of sales to cover that remains to be seen.”
Add to that the new California farmworker overtime rules, he said. Signed in September and set to phase in between 2019 and 2025, AB 1066 calls for the same overtime rules in the fields as in the office or shop, past eight hours per day. For decades the threshold for ag generally was 10 hours a day.