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Federal Register / Vol. 86, No. 228 / Wednesday, December 1, 2021 / Proposed Rules other hand, there may be instances in which the new wage floor depending on the job and geographic area could be above the market equilibrium wage; this would result in efficiency loss or increase in the DWL. A DWL occurs when a market operates at less than or more than the market equilibrium output. The AEWR sets compensation in some cases above the equilibrium level and in other cases may set wage levels that allow employers with market power to suppress wage rates below the competitive equilibrium, resulting in a labor shortage. When the AEWR is set above market equilibrium, the higher cost of labor can lead to a decrease in the total number of labor hours purchased in the local labor market. On the contrary, when the AEWR is set below competitive equilibrium and employers have market power, employers may pay below-competitiveequilibrium wage rates, decreasing the total number of worker labor hours purchased in the local labor market.
DWL is a function of the difference between the compensation the employers are willing to pay for the hours lost and the compensation employees are willing to take for those hours. In short, DWL is the total loss in economic surplus resulting from a wedge between the employers willingness to pay for, and the employees willingness to accept work
arising from the intervention in this case the AEWR.
The Department is unable to quantify the DWL without data on the equilibrium wage arising from each locality and occupational codes labor demand and combined immigrant foreign worker and domestic U.S.
worker labor supply curves. The below paragraphs qualitatively discuss changes in the AEWR wages that may result in some DWL. In the analysis of wage transfers, only 2 percent of workers would be employed in H2A
job opportunities where the AEWR will change under the proposed rule from the current baseline. For the 98 percent of workers employed in H2A job opportunities under the six occupational classifications covering field workers and livestock workers reported by the FLS with no change to wages, the proposed rule does not change the DWL and existing labor market efficiencies or inefficiencies from the current baseline.
In some cases the baseline AEWR
creates a DWL by setting a minimum wage above the market equilibrium, because the hourly wage represents an annual weighted average across six occupational classifications covering a State or multistate region. Under the proposed rule when the AEWR is annually adjusted, the DWL may increase when the AEWR covering the State or multistate region also increases
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and remains above market equilibrium.
Under the proposed rule this may occur for some, but not all, occupations covering field and livestock workers where the AEWR is determined using the annual weighted statewide gross hourly wage based on the OEWS survey.
The OEWS survey does not collect wages for fixed-site farms and ranches but does include data for establishments that support farm production activities i.e., farm labor contractors and are engaged in similar agricultural labor or services. Additionally, the types of agricultural establishments included in the OEWS survey, such as farm labor contractors, represent an increasing share of workers certified by the Department on H2A applications. The OEWS wage for occupations associated with these establishments is unlikely to reflect any wage suppression created by nonimmigrant foreign workers willingness to work at lower wages than domestic U.S. workers. Therefore, an AEWR determined for a State based on OEWS wage data may be higher than the baseline AEWR that is based on the FLS
and market equilibrium wage for temporary agricultural employment.
Therefore, for most SOC code and area combinations, the AEWRs under this proposed rule AEWR, set at the OEWS
wage, will serve as a wage floor and may create a DWL in the labor market, as illustrated by Figure 1.
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Ls
Employer Surplus W2
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I

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Worker Surplus

Deadweight Loss
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Labor Figure 1: Given a combined nonimmigrant foreign worker and domestic U.S. worlur supply curve Ls with equilibrium wage W less than the AEWR set at the OKWS wage V2, there will be a DWL in the labor market for that SOC code aml area combination.

When employers have market power in the labor market and the AEWR is set
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below the domestic competitive market equilibrium wage, then there may be a
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DWL in the associated U.S. labor market. In the H2A program there are
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