Daniel Gross has a post at Slate in which he outlines a point I’ve made here from time to time. Here’s the meat of his post:
There’s no such thing as a job an American won’t do. There are such things as jobs that Americans in your geographic area won’t do at the conditions on which you are offering them. At this point in the economic cycle, building homes in Denver now seems to be one of them.
When regional labor markets are tight, you have to send the price signal to potential workers that it will be worth their while to leave their current home or position in order to apply—that the job will pay well, that it will carry benefits, that if you get hurt or sick you’ll have good insurance, that there might be job security and prospects for training and development. That price might be closer to $100,000 than it is to $50,000. But that’s where we are in the economic cycle. And if builders prefer not to pay up to attract workers and are reluctant to try to charge more for their end products, they’ll muddle through at low volumes. That, alas, is also where we are.
The whole post is good and I encourage you to read it.
But it only tells half the story. In some sectors the availability of cheap labor, frequently illegal, has enabled, changed, or perpetuated certain business models. In agriculture, for example, in some parts of the country growers changed from using mostly black agricultural workers to mostly Hispanic agricultural workers practically overnight because black workers were beginning to organize and demand better conditions, terms, or pay. Illegal workers don’t have that option.
Now in many parts of the country agricultural workers are paid low wages, on terrible terms, in appalling conditions, largely to the absence of outrage. What would happen if there were strict enforcement of immigration laws and labor laws? Some growers would leave the business, some would invest in equipment to automate processes that are presently done by hand (that’s what’s meant by “increasing productivity”), and some would pay betters wages on better terms and offer improved working conditions.
As I’ve mentioned before, my family has been in the construction industry in Denver since the late 1940’s. My brother, who owns and runs the business, is not in residential construction but competes for the same workforce. Most of his work now is managing subs so he doesn’t have a lot of full-time employees anymore. The biggest challenge is finding competent foremen to manage the worksites. The lack of competent foremen is almost always an issue, but now it is particularly difficult.
We can certainly pay agricultural workers more, but that’ll just mean more food imports. No one is buying tomatoes picked by people making 100k a year. We’ve had a very good deal with our neighbors to the south – they’ve kept American agriculture alive and prices low.
Related, you can’t tell every kid in the country they have to go to college and somehow end up with a bunch of competent construction foremen. Our educational approach is absurdly elitist.
So long as median incomes keep pace with any increase in costs it’s a net win. We don’t need to keep things cheap, we need to stop the rentier FIRE sector from consuming a third of national incomes. Then tomato pickers can earn $65,000 a year and we can all afford to buy their production.
FIRE = Finance, Insurance, Real Estate
Ben:
That only works if you also apply high tariffs, right? Otherwise why in hell am I going to buy tomatoes picked at 65k a year rather than those picked by people earning half that? How is the ag sector not just the garment industry at that point?
To me migrant labor makes a lot of sense. You have a short picking season where you need a lot of labor willing to work long hours for a short period of time. The jobs are in a rural area where there aren’t a lot of people just hanging out waiting for a harvest. That need does not fit into the traditional American work template and I don’t really have an issue with importing temporary labor to fill that need. How many of those people, however, are among the ~11 million illegals currently residing in the US?
There’s some controversy over that question, Andy. Estimates on the number of illegal agricultural workers in the U. S. vary from between 1 million and 3 million. How many of those are seasonal and how many permanent is anybody’s guess.
My view is that our laws should comport with the majority of Americans’ wants and needs rather than just the benefit of a few and we should enforce the laws that we put in place. That’s why I think we should have a guest worker program that enables many, many more Mexicans to come to the United States to work legally and then serious workplace enforcement. We should also require that migrant workers labor under decent terms and conditions.
IMO there are several great policy challenges we are not rising to meet:
1. We share a 2,000 mile land border with a country where the median income is a quarter what it is here.
2. Many of our trading partners give massive subsidies to their own domestic economies, especially exports while shutting our trade out.
3. Do we have moral objections against bad labor conditions and environmental degradation or just objections to them here? If you advocate serious steps be taken to slow global warming, do you believe that carbon emissions are a problem or only a problem here?
A few observations.
My brother in law, who runs 6 packing plants, reports that about 100% of his Haitian workforce is legal. Roughly 0% of the Mexican workforce is. Yet the Mexicans will all present freshly minted (read: forged) documents created by an enterprising Mexican ringleader who he has to perpetually chase. This speaks to a cultural component.
I dont understand the “appalling labor conditions” comment. It makes good talk, but is far from broad reality. Central Florida is georgeous for 9 months and brutally hot for 3. I worked in worse, as a degreed engineer, for 6 years. I’ve walked those packing plants. Not really worse than manufacturing plants in general.
The notion that Americans would work any job if paid well enough is a useless truism. Prevailing wages for managing $500 million in capital just happen to be a tad more than pulling a vegetable off a plant, or placing it in a wooden box. And all the would be King Ben’s of the world dictating wage structures won’t change that. Further, as Andy notes, you can’t find some skill sets. You just can’t. Too far from where Americans want to live, or where their historical apprenticeships took them. I know it’s not fashionable to say, but so many Americans are spoiled.
I’m thinking more agricultural workers in the Central Valley than food processing workers. Every so often there’s an article on the subject. Here’s one.
If you watch the home improvement shows on HGTV, you will inevitably be treated at some point to a look at a foreclosed-on home in Southern California which has been divvied up into a dozen tiny living areas. My off-hand guess is that those were rented out to Mexican real estate construction workers.