Wednesday, May 26, 2010

Worker Shortage in Washington with a Jobless Rate > 9%? Orchard Brings 1,000 Workers from Jamaica?

A few weeks ago, I posted about how Michigan landscape companies can't find enough seasonal workers this year, even though Michigan has the highest jobless rate in the country at 14% in April.  Here's a related story about a farm worker shortage in the state of Washington, even though the state unemployment rate has been above 9% for 12 straight months for the first time since 1984.  

"There was a moment when they first started calling this the "Great Recession," in 2008, that Steve Appel thought this might be the time. Americans might come back to working on the farm.

"It's just common sense, with the depression and high unemployment and what not, that there ought to be local folks looking to come take some of these jobs," says Appel, 58, a wheat farmer in the Palouse in Eastern Washington. 

Nope. It hasn't happened. Farm jobs are going unfilled to such a degree that now a huge fruit orchard in Okanogan County, desperate for someone to pick cherries and apples this summer, has turned to flying in hundreds of workers from ... Jamaica.  That's right. From a Caribbean island more than 3,000 miles away.  In all, this one farm has applied to bring in more than a thousand temporary foreign workers."

Read more here.

Update: Thanks to Ironman for this link, showing that Washington has the second most generous unemployment benefits in the country of $586 per week as of May 3 (behind Massachusetts, which pays $628 per week or more than $31,000 per year) or more than $28,000 per year working 0 hours per week.  Farm workers would "only" make about $24,380 per year picking apples, so it wouldn't make sense to work, and that could explain the "worker shortage" and why the orchard needs to hire 1,000 workers from Jamaica.  

Question: How much lower than the current 9.9% would the jobless rate in the U.S. be today without the 99-weeks of unemployment benefits that can be as generous as $31,000 per year in some states?  There is at least some evidence of "worker shortages" in Washington and Michigan, despite the "worst economic crisis since the Great Depression."

53 Comments:

At 5/26/2010 6:57 PM, Blogger misterjosh said...

The Jamaicans probably think it's a vacation. :)

 
At 5/26/2010 6:59 PM, Blogger Ironman said...

The state of Washington's unemployment "benefits" are among the most generous in the U.S., ranking second overall behind Massachusetts. Why would someone who's not working in Washington state who's receiving up to $586 per week for being on the dole ever bother with picking fruit? Even if it were for Dole?

 
At 5/26/2010 7:30 PM, Anonymous Anonymous said...

How much lower than the current 9.9% would the jobless rate in the U.S. be today ...

If this story is any indication, not much.

 
At 5/26/2010 7:31 PM, Anonymous Anonymous said...

The Umemployment benefits are misutilized to the core. Allow more of those workers not H1,L1,B1
visas. Some of the guys on those visas dont even pay taxes.

 
At 5/26/2010 8:00 PM, Anonymous gettingrational said...

Growing up in Washington and during college many of my friends and aquaintences would pick apples. We called it "apple knocking". Yes, unemployment benefits and a snotty attitude has hurt the ability to attract workers. This is work (duh) but it is a good experience for most.

 
At 5/26/2010 8:14 PM, Anonymous Lyle said...

Just to point out that its about 4-5 hours by car (180 mi) from Seattle to the Apple area. So at 20 mpg that takes about $56 dollars just to get there and back. (Unless buses were provided). Thats already 1/2 day or more of pay just assuming gas costs. Then you have housing costs which are not included for local workers, and it end up taking likley 2 days a week just to pay the costs of staying in the apple country for those from the major metro areas. The question is did the offer for local jobs include transport and local lodging? Need to see the full offers to make a comparison.
Now long term the apple jobs will disappear as WSU figures out how to machine harvest apples, UC Davis has for other crops.

 
At 5/26/2010 9:10 PM, Blogger sethstorm said...

This comment has been removed by the author.

 
At 5/26/2010 9:11 PM, Blogger sethstorm said...

Deport them and smite the company.

 
At 5/26/2010 9:27 PM, Anonymous Anonymous said...

Sorry, off topic....

What do you think of this:

"US money supply plunges at 1930s pace as Obama eyes fresh stimulus"


http://www.telegraph.co.uk/finance/economics/7769126/US-money-supply-plunges-at-1930s-pace-as-Obama-eyes-fresh-stimulus.html

 
At 5/26/2010 10:56 PM, Anonymous Anonymous said...

$568/week doesn't even include other benefits, such as welfare (food stamps) and even things such as credits for cell phone bills (so that prospective employers can call the unemployed).

America's gone soft. All these people that depend on the government will have a heck of a time when the government, at some point, is unable to care for them anymore.

 
At 5/26/2010 11:30 PM, Blogger Ron H. said...

sethstorm said...

Deport them and smite the company.

Seth, they've already been smitten with a dearth of workers. What more should they suffer? Should they be smitten on the cheek?

I love it when you talk all biblical & stuff.

 
At 5/26/2010 11:53 PM, Blogger sethstorm said...

This comment has been removed by the author.

 
At 5/27/2010 12:12 AM, Blogger sethstorm said...


Seth, they've already been smitten with a dearth of workers. What more should they suffer? Should they be smitten on the cheek?

Biblical is about the kindest way I can put it. I don't blame them for wanting these H2-A's, I blame them for using them.

They only have a dearth of workers at that wage. I'd like to know what kinds of opportunities exist in that state that that people are freed to pursue - presuming they 1) exist, 2) are seeking citizens and 3) are not some form of "bootstrappery" - with those 1,000 Jamaicans.

We've already gutted our high end with H1-b(and other like programs), does this nation really need to gut the low end with H2-A as well? You want the failed European state, keep on creating perverse incentives like this.


The Jamaicans probably think it's a vacation. :)

Depends highly on the conditions. Just because it's different weather out there doesn't mean it's better weather.

I'd like to know:
1) What kind of research is used by these people to find these H2-A's.

2) Why these firms that do this (whether it is H1-b, H2-A, L1, etc.) are too scared to disclose that they do this.

It's 2010, and I still hear people speak of outsourcing and offshoring as if they were obscenities(even if they are a part of the practice). If it is "inevitable", then why is there so much fear of disclosing it?

 
At 5/27/2010 12:40 AM, Blogger Ron H. said...

The question is did the offer for local jobs include transport and local lodging?

Lyle, I can only assume that the employer is willing to provide transportation and lodging, as they are flying Jamaicans to the job. Local transportation would no doubt be much cheaper. Other news articles indicate that growers are providing bus transportation for Mexican workers.

 
At 5/27/2010 12:52 AM, Blogger Ron H. said...

sethstorm, how much do you think growers should pay US citizens to pick fruit? Consider that at some price, the cost of labor will be as high as the price they get for the fruit. If a grower can't make money selling fruit, he is better off just leaving it to fall off the trees and rot. So, what is the correct amount to pay fruit pickers?

As you ponder your answer, also ask yourself how much more you are willing to pay for fruit if the price goes up?

 
At 5/27/2010 3:06 AM, Anonymous Dave Pinsen said...

"sethstorm, how much do you think growers should pay US citizens to pick fruit? Consider that at some price, the cost of labor will be as high as the price they get for the fruit. If a grower can't make money selling fruit, he is better off just leaving it to fall off the trees and rot. So, what is the correct amount to pay fruit pickers?"

Ron H,

If American fruit farmers couldn't import third worlders to pick their fruit, maybe they'd invest more in automation (which could create more high paying jobs for Americans in engineering, manufacturing, sales, etc.). Or, failing that, maybe they'd try to import unemployed Americans from other, poorer, parts of the country. Did they try recruiting workers in Michigan, for example?

 
At 5/27/2010 4:04 AM, Blogger Tim Worstall said...

A favourite paper:

http://cep.lse.ac.uk/pubs/download/occasional/OP015.pdf

"If you pay people to be inactive, there
will be more inactivity. So you should pay them instead for being active – for either working
or training to improve their employability.
The evidence for the first proposition is everywhere around us. For example, Europe
has a notorious unemployment problem. But if you break down unemployment into shortterm
(under a year) and long-term, you find that short-term unemployment is almost the same
in Europe as in the U.S. – around 4% of the workforce. But in Europe there are another 4%
who have been out of work for over a year, compared with almost none in the United States.
The most obvious explanation for this is that in the U.S. unemployment benefits run out after
6 months, while in most of Europe they continue for many years or indefinitely.
The position is illustrated in Figure 1. The vertical axis shows how long it is possible
to draw unemployment benefit, and the horizontal axis shows how long people are actually
unemployed, as measured by the percentage of unemployed who are out of work for over a
year. The association is close, and it remains close even when we allow statistically for all
other possible factors affecting the duration of unemployment.1"

 
At 5/27/2010 7:35 AM, Blogger sethstorm said...


sethstorm, how much do you think growers should pay US citizens to pick fruit?

The market-clearing wage that exists when they have to use only US citizens.

 
At 5/27/2010 8:16 AM, Anonymous morganovich said...

i have been hearing this story over and over again from companies trying to hire administrative and back office staff.

essentially, applicants keep asking for outsized pay packages because they are already well paid to stay home and it's very difficult to hire.

a friend of mine with a start up fund in new york has been looking for an executive assistant for months and literally cannot find anyone to take a $70k job.

in an environment with such high unemployment, that's just surreal.

we have just imported europe's sclerosis.

 
At 5/27/2010 8:25 AM, Blogger Walt G. said...

If there is a shortage of workers, then wages should rise to the clearing point where supply equals demand: Isn't that econ 101? Why did you assume unemployment wages are too high instead of employment wages too low? People respond to incentives (higher pay) and substitutes (Jamaicans) come into play here, too.

Is the law of supply and demand limited as an excuse to have us pay more money for gasoline?

 
At 5/27/2010 8:26 AM, Blogger sethstorm said...

This comment has been removed by the author.

 
At 5/27/2010 8:32 AM, Blogger sethstorm said...


I have been hearing this story over and over again from companies trying to hire administrative and back office staff.

Essentially, applicants keep asking for outsized pay packages because they are already well paid to stay home and it's very difficult to hire.

No reason for them not be hiring citizens that are already out of work.

 
At 5/27/2010 8:47 AM, Anonymous Anonymous said...

If there is a shortage of workers, then wages should rise to the clearing point where supply equals demand: Isn't that econ 101? Why did you assume unemployment wages are too high instead of employment wages too low?

Sure, you give me a $50,000 annual welfare subsidy from the government and the "supply" of my labor will always equal "demand" at some point north of there. Isn't that welfare 101? Why do you assume that the welfare subsidy has been set at the optimal level?

 
At 5/27/2010 10:04 AM, Anonymous Hydra said...

sethstorm, how much do you think growers should pay US citizens to pick fruit?

The market-clearing wage that exists when they have to use only US citizens.


So you are in favor of government interference to force US hires?


Given the same apples from the same tree I prefer cheap apples to expensive ones. I I pay moe for American picked apples then I'm paying the base labor rate for apple picking plus an additional amount as charity to US workers.

I'm not sure I see the difference between that and paying them to stay home.

Besides, apple picking is a temp job. And agricultural. it doesn't even show up in the labor stats.

 
At 5/27/2010 10:07 AM, Blogger Walt G. said...

anonymous 8:47: You're absolutely right. I have not drawn an unemployment check since President Reagan's first term in office, so unemployment pay at a level that people can do more than survive is not even in my thought process.

 
At 5/27/2010 10:30 AM, Anonymous morganovich said...

seth-

you really do not get this:

he's trying to hire US workers who are out of work.

the US workers won't take the job (at $70K) because they are getting 60k in unemployment benefits, so why work for the extra $10k?

this has nothing to do with immigration and everything do do with fat, extended unemployed benefits.

why should i pay taxes so someone with a job offer in hand can sit home and watch TV?

 
At 5/27/2010 11:10 AM, Anonymous morganovich said...

dr perry-

something else to add to your calculation:

someone in the private sector has to make $50k to take home $31k.

also: what's the value of medicaid benefits?

 
At 5/27/2010 11:21 AM, Blogger Ron H. said...

Dave Pinsen, you should really read the original post on this thread before you comment. It's obvious that you haven't.

Let me summarize: Washington fruit growers can't find workers, although Washington state's unemployment rate is above 9%.

It's possible that unemployment benefits at $586/wk could be one reason.

Your example of Michigan is a good one, as employers there are having the same problem finding workers. It doesn't seem likely that workers there would be willing to travel for employment if they won't work close to home.

Growers are forced to transport workers from outside the US, or let their fruit rot.

As for automation, I can only imagine that growers look pretty hard at all their options. When you say this -

"If American fruit farmers couldn't import third worlders to pick their fruit, maybe they'd invest more in automation (which could create more high paying jobs for Americans in engineering, manufacturing, sales, etc.)"

You should understand that automation must reduce costs to be of benefit to the growers. Those high paying jobs you envision, would be far fewer than the number of pickers displaced. Overall employment would decrease.

 
At 5/27/2010 12:05 PM, Blogger Ron H. said...

me: sethstorm, how much do you think growers should pay US citizens to pick fruit?

you The market-clearing wage that exists when they have to use only US citizens.

What if that wage is too high to allow fruit to be grown in the US? Are you willing to do without fruit because there aren't any US growers left in business?

When you say "US citizens", does that group include legal resident aliens with "green cards"?

By the way, you might want to avoid using terms like "market clearing", because if you are familiar with that concept, you likely understand your own condition quite well. You understand that there are sellers of labor who won't work at that wage, and are therefore voluntarily unemployed. Other commenters might have less sympathy for your rants.

 
At 5/27/2010 12:52 PM, Blogger Ron H. said...

morganovich asks: - why should i pay taxes so someone with a job offer in hand can sit home and watch TV?

Good question. Maybe these folks have the answer.

 
At 5/27/2010 1:44 PM, Anonymous Anonymous said...

How much lower than the current 9.9% would the jobless rate in the U.S. be today without the 99-weeks of unemployment benefits...

0.4%.

You're welcome.

 
At 5/27/2010 1:53 PM, Blogger Bill said...

Significantly reduce government transfer payments (i.e. free Obama money) and I bet you will see millions of new American farm workers become available in big cities like Chicago, New York, Washington, Atlanta, etc. It is all a matter of incentives.

Marginally intelligent and marginally productive people under the best of circumstances are being paid to not work, so why work. Cut off the payments and, to quote Lincoln, they will have to "root, hog or die".

 
At 5/27/2010 1:56 PM, Anonymous Anonymous said...

My experience with ag workers is similar. I pay around $12 an hour for temporary help. I don't think ordinary local residents would do the work for $20 either, and the price Ihave to sell my product for wouldn't support even that.

Unless INS shuts everyone down, wages and prices rise across the board, then a similar action here would put me out of business.

 
At 5/27/2010 2:07 PM, Anonymous Anonymous said...

Marginally intelligent and marginally productive people under the best of circumstances are being paid to not work ...

That's right, they are being paid to vote.

 
At 5/27/2010 3:13 PM, Blogger Bill said...

In the 1950s, a friend of my father's, who was in college at the time and eventually became a successful doctor, traveled the Western US during summers off from school and picked produce at various farms. This was before the era of mass third world migration (legal or illegal) into the US. This was apparently a common thing for college kids to do back then as their summer break coincided with harvest season for many crops. The same thing could happen today under the right circumstances. So, let's not pretend that there are things that Americans will not do. Again, it is all a matter of implementing the right incentives.

I would also note that the 50s generation and earlier generations were significantly less whiny than more recent generations as they had to work their whole lives, they often fought in wars and they did not have unreasonable expectations about life as a result of living under an overly protective nanny state.

 
At 5/27/2010 8:37 PM, Blogger sethstorm said...


Marginally intelligent and marginally productive people under the best of circumstances are being paid to not work, so why work. Cut off the payments and, to quote Lincoln, they will have to "root, hog or die".

Since they're the group that has no political defense, they're the ones who are forced to back down?

You just want them to be forced, while business isn't. It's OK to force the unemployed(with the ending of funds), but not the businesses who won't do what is required/needed to hire them?

Yes, it's nice to get that kind of slap-in-the-face to want the work, but be forced to take a haircut because the only work available would invalidate or severely cut it in the future. That's the price of taking that temp work or at that low wage.

Even the unemployment office knows that. Not only does it reduce the negotiation position of someone looking for work, it also makes it that much worse when they look for the job after that.


By the way, you might want to avoid using terms like "market clearing", because if you are familiar with that concept, you likely understand your own condition quite well. You understand that there are sellers of labor who won't work at that wage, and are therefore voluntarily unemployed.

Then how do you describe this mutual unwillingness to meet, at the wages offered?


Unless INS shuts everyone down, wages and prices rise across the board, then a similar action here would put me out of business.

Fine. Let the INS do their job to get to that point. Then you can at least remove the excuse that "everyone else is doing it". Just how much of an increase would be seen in overall cost?

 
At 5/28/2010 1:54 AM, Blogger Ron H. said...

sethstorm responded to this: -

By the way, you might want to avoid using terms like "market clearing", because if you are familiar with that concept, you likely understand your own condition quite well. You understand that there are sellers of labor who won't work at that wage, and are therefore voluntarily unemployed.

With this: -

Then how do you describe this mutual unwillingness to meet, at the wages offered?

What does this even mean?

I thought you understood the term "market clearing" because you used it more or less correctly, but I must have been wrong. Your response, above, bears no relationship to the quote from my comment.

 
At 5/28/2010 4:57 AM, Blogger sethstorm said...


What does this even mean?

It means the following:

The point at which supply would meet demand (for US citizens) was too high for the hiring entity. They chose to use H2-A's to maintain their current point.

The point where supply currently met with demand was too low for a US citizen. If the (unknown) hiring entity is to be believed, available (and legal) US citizens did not apply.

Since neither party wishes to accept each other's offer, that is what I termed "mutual unwillingness". Neither party wished to change in order to meet the other.

 
At 5/28/2010 6:46 AM, Blogger juandos said...

"No reason for them not be hiring citizens that are already out of work"...

That's our sethstorm, always willing to spend someone else's money for his inability to understand simple market conditions...

 
At 5/28/2010 7:48 AM, Blogger sethstorm said...


...always willing to spend someone else's money for his inability to understand simple market conditions...

Explain that, if you could. You seem to think that market conditions are unchanging.

 
At 5/28/2010 9:33 AM, Anonymous Anonymous said...

This was apparently a common thing for college kids to do back then as their summer break coincided with harvest season for many crops. The same thing could happen today under the right circumstances. So, let's not pretend that there are things that Americans will not do.

Last time I hired college students, I was carrying two boxes tot the truck when I loooked over and saw one of my hires itting ona box. Even an old geezer like me could not embarass those kids into actually working.

Americans will do those jobs when their alternatives are as bleak as those of the immigrants.

Therefore, we should eliminate unemployment payments and increase suffering in order to get more people to work.

 
At 5/28/2010 9:37 AM, Anonymous Anonymous said...

I bet you will see millions of new American farm workers become available in big cities like Chicago, New York, Washington, Atlanta,


We don't need millions of farm workers. Particularly not in the big cities. In Portugal, farm workers do live in the cities and they commute outbound to the farms in stake body trucks.

Good work, if you can get it.

 
At 5/28/2010 10:25 AM, Blogger Ron H. said...

>"Since neither party wishes to accept each other's offer, that is what I termed "mutual unwillingness". Neither party wished to change in order to meet the other."

So, in order to survive and make a living so he could feed his family, the grower was forced to fly in Jamaican workers to pick his fruit.

I'll ask again. Does your term "US citizen" include legal immigrants with green cards??

 
At 5/28/2010 10:38 AM, Blogger Ron H. said...

>"Therefore, we should eliminate unemployment payments and increase suffering in order to get more people to work."

Good idea. Similar to what Benjamin Franklin said: -

"I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it."

 
At 5/28/2010 11:55 AM, Blogger juandos said...

"Explain that, if you could. You seem to think that market conditions are unchanging"...

Explain what exactly?

Your desire to see people paid just because they draw breath in this country?

Or is it your inability to understand that market conditions NOT only set prices for products and services but for wages as well?

 
At 5/29/2010 1:36 PM, Blogger sethstorm said...


Last time I hired college students, I was carrying two boxes tot the truck when I loooked over and saw one of my hires itting ona box. Even an old geezer like me could not embarass those kids into actually working.

Sounds like you got the younger of the bunch.

That's quite a shame. Were they the rule or the exception?


Americans will do those jobs when their alternatives are as bleak as those of the immigrants.

I'm not sure that's happening spontaneously as much as there is a demand by business to have this happen.

This is part of why I say what I do say about unemployment. They want the unemployed to take the haircut, or threaten bring people like these H2-A's.

The temporary worker visas seem a bit odd given how they're more used to create a shortage or as a threat against citizens. If anything, they should be making it easier to get the unemployed citizens instead to work those (and not on a permatemp basis).


Explain what exactly?

Explain how I'm asking to spend someone else's money (when it's already being spent that way).


Your desire to see people paid just because they draw breath in this country?

If they had legitimate claim to it somehow(e.g. by contractual agreement), yes. For indefinitely long periods of time with no particular purpose from government, no.


I'll ask again. Does your term "US citizen" include legal immigrants with green cards??

Yes.

 
At 5/29/2010 2:56 PM, Blogger juandos said...

Thank you sethstorm for reaffirming what I thought...

"Explain how I'm asking to spend someone else's money (when it's already being spent that way)"...

Spent which way but you really don't have the remotest clue on how or even why the money you seem to think is there in abundance is being spent...

"If they had legitimate claim to it somehow(e.g. by contractual agreement), yes"...

ROFLMAO!

Its going to suck for you when reality finally takes a bite out of your @$$...

 
At 5/29/2010 11:08 PM, Blogger sethstorm said...


Thank you sethstorm for reaffirming what I thought...

Likewise. Your words might apply in a good economy with better-than-full employment. The problem is that we don't even have that.

You just want someone to take a haircut, the unemployed.

 
At 5/30/2010 5:10 AM, Anonymous Anonymous said...

When you use the phrase "labor shortage" or "skills shortage" you're speaking in a sentence fragment. What you actually mean to say is: "There is a labor shortage at the salary level I'm willing to pay." That statement is the complete and intellectually honest sentence.

Some people speak about shortages as though they represent some absolute, readily identifiable lack of desirable services. Price is rarely accorded its proper importance in their discussions.

If you start raising wages and improving working conditions, and continue doing so, you'll solve your "shortage" and will have people lining up around the block to work for you even if you need to have huge piles of steaming manure hand-scooped on a blazing summer afternoon.

 
At 5/30/2010 9:15 PM, Blogger Ron H. said...

>"If you start raising wages and improving working conditions, and continue doing so, you'll solve your "shortage" and will have people lining up around the block to work for you..."

You are absolutely right. This is classic supply and demand. In the case of demand for farm workers, we can see that as wages are raised, at some point busloads of Mexicans and planeloads of Jamaicans are willing to travel 1000s of miles from home to work in a foreign country picking fruit.

 
At 6/01/2010 5:48 PM, Anonymous Anonymous said...

When Michigan landscape companies and Washington farmers are rewarded with cheap foreign labor when they can not find American workers I am more suspicious than DR. Perry. Part of the suspicion is the result of that famous quote from immigration lawyer Joel Stewart at

http://www.ilw.com/articles/2000,0424-Stewart.shtm

When employers feel the need to legalize aliens, it may be due to a shortage of suitable U.S. workers, but even in a depressed economy, employers who favor aliens have an arsenal of legal means to reject all U.S. workers who apply
A video version comes from Pittsburgh law firm Cohen & Grigsby’s immigration lawyer Lawrence Lebowitz in a siminar on how to legally avoid hiring Americans at:

http://www.youtube.com/watch?v=Fx--jNQYNgA and

http://www.businessweek.com/bwdaily/dnflash/content/jun2007/db20070621_912042.htm

Hear him say:

“And our goal is clearly NOT TO FIND a qualified and interested U.S. worker. And you know in a sense that sounds funny, but it’s what we’re trying to do here. We are complying with the law fully, but ah, our objective is to get this person a green card, and get through the labor certification process. So certainly we are not going to try to find a place [at which to advertise the job] where the applicants are the most numerous. We’re going to try to find a place where we can comply with the law, and hoping, and likely, not to find qualified and interested worker applicants.”

 
At 6/02/2010 1:58 AM, Blogger Ron H. said...

>"When Michigan landscape companies and Washington farmers are rewarded with cheap foreign labor when they can not find American workers I am more suspicious than DR. Perry."

Anon, thanks for the links. Do have any reason to believe that applicants for these landscape and farm jobs are indeed being turned down, or is there really a lack of interest on the part of unemployed locals?

It has been suggested in this thread that generous unemployment benefits with apparently unending extensions has dampened enthusiasm for menial farm work. What do you think?

It sounds like this is a recent problem, not evident before this year.

 
At 6/02/2010 10:53 AM, Anonymous Anonymous said...

Ron H.

The main reason I doubt the shortage claims is that I am confident that free markets do not have shortages and these markets are large enough to be free. As a conservative I class foreigners admitted to work in the US as “solution by government.” Rather than pay up to encourage workers to join them employers appeal (aka bribe) Congress to allow them to hire foreigners. No matter how generous unemployment benefits are markets work. An employer whose wage, benefits, and working conditions can not compete with unemployment benefits is not offering much of a job.

This is not a recent problem. A second reason to doubt the Michigan and Washington shortage claims is that employers have a long history of crying wolf about labor shortages. Consider this:

"The crop of the present year, although deemed a short one, taxed the labor capacity of the state to the utmost . . . . If such was the situation this year, what will it be when the numerous young orchards now just coming into bearing will be producing full crops? The labor is not now in the country to handle such an increase in production."

That was written in 1883 against the Chinese Exclusion Act of 1882. Fruit farmers in California claimed crops would rot in the fields if more Asians were not brought in for the harvest. The rotting didn't happen.

Then there was the great tomato scare of the early 1960s. The head of the California Agriculture Department told Congress to expect a 50% drop in tomato production if the Bracero guest-worker program got the ax. That drop didn't happen. Instead, tomato farmers were forced to mechanize. Output rose and prices fell, from $30 a ton in 1960 to $22 a ton in 1970. In 1960, California farmers paid 45,000 workers to pick 2.2 million tons of tomatoes. In 1996, just 5,500 workers picked 12 million tons.

Cheap foreign labor helps employers but harms the rest of us. What economists call externalities. California tax payers spend $10 billion a year covering the cost of supplying illegal alien labor to employers. The big cost of cheap labor is that it stifles innovation. Many economists believe the industrial revolution started in England rather than anywhere else because of the high cost of labor which resulted from plague

The definitive work on the impact of cheap labor was done in 1857 by Hinton Rowan Helper. He published a book titled “The Impending Crisis of the South” in which he argued that slavery (the ultimate cheap labor) hurt the economic prospects of non-slaveholders, and was an impediment to the growth of the entire region of the South. In the South, Hinton Helper says: “We want Bibles, brooms, buckets and books, and we go to the North; . . . we want toys, primers, school books, fashionable apparel, machinery, medicines, tombstones, and a thousand other things, and we go to the North for them all.”

In the antebellum South plantation owners and the merchants who supported them prospered. Everybody else just got by. There was no advantage for a non-slave to have any skill that could be done by a slave. Are we headed for an economy in which multinational corporation leaders and those who support them prosper and everybody else just gets by?

 

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