California: Labor Trends May Challenge Wine Industry

(Wines&Vines) - At Impact Napa, a conference sponsored by the North Bay (California) Business Journal on Thursday, economist Robert Eyler sent a sobering message to attendees: The labor situation in Napa Valley may get increasingly challenging, forcing them to pay higher wages and adopt more mechanization.

This forecast results partly from the increasing demand and wages for workers in nearby counties, plus limited housing in Napa Valley.

Continued improvement in the Mexican economy, which is growing at 3% per year, and changes in immigration policy and enforcement would only make things worse, Eyler said.

 Looking at payrolls

As the president of Economic Forensics and Analytics and a professor at Sonoma State University, Eyler provided statistics and forecasts based on payroll records, but because of Napa’s unusual employment patterns, the numbers don’t tell a complete story.

 Simply put, a high percentage of people who work in Napa County aren’t on local payrolls: Either they’re contract workers paid in another county or they work alone or in companies with fewer than four employees, which aren’t included in the numbers.

 Breakdown of employers

Specifically, Napa County has 15,000 employers for only 91,000 workers including government employees and the self employed. About 1,200 of the employers are farms. Only about 5,000 of the employers employ more than four people (which aren’t considered “payroll companies” in the data), while 10,500 companies have fewer than four employees. Employment also undergoes a seasonal surge from June to October, due to both harvest and tourism, and that is likely to continue, too.