A federal law that increases wages for non-farm foreign workers could put some Louisiana processors, such as crawfish-peeling plants, out of business, according to LSU AgCenter economist Mike Salassi.
The law, which goes into effect this October, was designed to keep foreign workers from displacing American workers by taking jobs at lower wage rates. Temporary foreign workers’ pay could increase by 32 percent.
Louisiana businesses ranging from sugarcane mills to meat processing plants use these workers to do jobs that aren’t attractive to local residents, Salassi said in a news release.
“Some of these small crawfish-peeling plants are already operating on tight profit margins, and this increase will not be good for them at all,” Salassi said.
Labor is already the plants’ biggest expense, Salassi said. Some of the smaller processing plants may decide they can’t afford to pay this increased wage and just close.
“The prevailing wage is like the minimum wage, but it’s different for each industry. There are lots of different job classifications or job types and each have a different prevailing wage,” he said.
For example, there are 30 workers in the rice-processing industry making $8.48 an hour, Salassi said. The new wage is $12.84, a 51 percent increase.
Sugar boilers’ pay will go from $10.05 an hour to $14.35, a 42 percent increase.
“In the past, there have been small increases in the prevailing wage, but I don’t think they’ve had such a large increase at any one point in time,” he said.