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February 6, 2008

Illegal Immigration and Low Wage Labor

By Lee Cary
Leprechauns, unicorns, and the assertion that illegal immigrants take jobs Americans won't do -- they're all myths.  Some myths are harmless, while others, like the medical benefits of bleeding, cause harm.  The assertion about illegal immigrants taking unwanted jobs is not harmless. Low wage Americans bear a considerable burden.
 
As Will Rogers said,

"It's not what you don't know that hurts you. It's what you do know that ain't so."

The Farm Worker Myth

In recent years, ripening crops regularly are accompanied by stories suggesting we need illegal immigrant labor to bring in the harvest. For example, on July 20, 2007, a Wall Street Journal editorial  entitled "Immigration Non-Harvest," breathlessly began with this paragraph:

"Peak harvest season is approaching in much of the country, and the biggest issue on the minds of many growers isn't the weather but how in the world they'll get their crops from the vine or off the tree.  Thanks to Congress's immigration failure, farmers nationwide are facing their most serious labor shortage in years."

Visions of crops rotting in the fields make for vivid journalism. But in September, 2007 a Congressional Research Service (CRS) Report for Congress (updated from a 2004 version) entitled "Farm Labor Shortages and Immigration Policy,"  found little cause to worry about crops ripening and spoiling, stating that,

"Trends in the agricultural labor market generally do not suggest the existence of a nationwide shortage of domestically available farm workers...Employment on farms did not show the same upward trend as other industries during the 1990s expansion.  While nonfarm jobs generally have risen thus far in the current decade, farm jobs generally have fallen. The length of time hired farm workers are employed has changed little or decreased over the years.  Their unemployment rate has varied little and remains well above the U.S. average, and underemployment among farm workers also remains substantial.  These agricultural employees earn about 50 cents for every dollar paid to other employees in the private sector."

Any significant shortage of farm workers ought to have been reflected in an increase in their wages, according to the law of supply and demand.  But, from 2001 to 2006, the  ratio of hourly field worker wages (those engaged in planting, rending and harvesting crops) to private nonfarm worker wages maintained a constant 0.54 for six consecutive years.  That doesn't preclude the existence of temporary spot shortages, but it does argue against a systemic shortage of farm workers.

[A 2007 study written by Philip Martin, a professor of agricultural and resource economics at the University of California, Davis, for the Center for Immigration Studies (CIS) entitled "Farm Labor shortages: How Real? What Response"  further substantiated the conclusions of the CRS Report, and, consequently, challenges the premise of the WSJ editorial.]

Busting The Myth Across Industries

Employment statistics invariably lag behind the calendar.  A March 2006 CIS study  of the top 22 occupations in 2005 indicated that in no occupational category did immigrant employees outnumber native employees.  In other words, native-born U.S. workers are already doing jobs where high concentrations of illegal immigrant are also employed.  The largest share of immigrant employees was 44.7%, and the category was "Farming, fishing and forestry."  The largest raw number of immigrant employees was in "Construction and extraction" where 2,209,000 immigrants (26.1% of the total labor force) were outnumbered by 6,250,000 native employees. 

A deeper examination into statistics that focuses on less-educated workers (high school degree or less) indicates a higher concentration among immigrant employees.  In "Farming, fishing and forestry," less-educated immigrants outnumber natives 364,000 to 338,000.  But, there were an estimated 56,000 unemployed (14.2%) native workers in that category.  In construction, native unemployment was 12.1% with 577,000 unemployed native workers.  

The point: low-skilled illegal immigrant workers are wage leveraging native workers out of the occupational categories typically cited by perpetuators of the myth. The job categories include, but not limited to: farm workers, construction laborers, cleaning and maintenance providers, and food preparers.

Here's one example of that wage-leveraging impact from the Federation of American Immigration Reform (FAIR):  

"In Los Angeles, unionized black janitors had been earning $12 an hour, with benefits. But with the advent of subcontractors who compose roaming crews of Mexican and El Salvadoran laborers, the pay dropped to the minimum wage of $3.35 per hour. Within two years, the unionized crews had all been displaced by the foreign ones, and without any other skills, most of the native workforce did not find new work."

The myth becomes truth if amended to read: Illegal immigrants accept jobs that American workers won't do for poverty level wages and no benefits (including healthcare).

The Truth Behind The Myth

Some conspiracy theorists claim that an open borders policy aims to create poverty in the U.S. while relieving poverty in Mexico as part of a grand scheme to eventually unite the two countries into one, minimally in the style of a European Union. The truth, though, is alluded to in a December 2006 "Special Report" entitled "Undocumented Immigrants In Texas: A financial Analysis of the Impact to the State Budget and Economy," released by Carole Keeton Strayhorn, Texas Comptroller of Public Accounts. 

Strayhorn, the mother of President George W. Bush's former press secretary, Scott McClellan, and an unsuccessful opponent of Texas Governor Rick Perry in the last election, offered this summary of her study:

"The absence of the estimated 1.4 million undocumented immigrants in Texas in fiscal 2005 would have been a loss to our gross state product of $17.7 billion.  Undocumented immigrants produced $1.58 billion in state revenues, which exceeded the $1.16 billion in state services they received.  However, local governments bore the burden of $1.44 billion in uncompensated health care costs and local law enforcement costs not paid for by the state."

In other words, sure there are costs involved in hiring "undocumented workers."  But, forget the laws against illegal immigration and employing illegal immigrants, say some. The benefits are good for the Texas economy and outweigh the costs. 

Two famous, now deceased, Americans warned us against uncontrolled immigration. Barbara Jordan, Chair of the U.S. Commission on Immigration Reform, testifying  before a Joint Congressional Committee on June 28, 1995, said,

"The Commission recommends the elimination of the admission [as legal immigrants] of unskilled workers. Unless there is another compelling interest, such as in the entry of nuclear families and refugees, it is not in the national interest to admit unskilled workers. Especially when the U.S. economy is showing difficulty in absorbing disadvantaged workers and efforts towards welfare reform indicate that many unskilled Americans will be entering the labor force."  

Jordan's warnings were ignored, as were the words earlier of the founder and president of the American Federation of Labor, Samuel Gompers, who, in a Letter to Congress in March, 1924, wrote:

"America must not be overwhelmed.  Every effort to enact immigration legislation must expect to meet...two hostile forces of considerable strength.  One of these is composed of corporation employers who desire to employ physical strength (broad backs) at the lowest possible wage and who prefer a rapidly revolving labor supply at low wages to a regular supply of American wage earners at fair wages.  The other is composed of racial groups in the United States who oppose all restrictive legislation because they want the doors left open for an influx of their countrymen regardless of the menace to the people of their adopted country."

To paraphrase Will Rogers, it's not the warnings you don't hear that hurt you; it's the ones you hear and don't heed.
on "Illegal Immigration and Low Wage Labor"
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