Robert Samuelson in the 3/22/06 edition of the Washington Post argues that a guest worker program will lock more poor workers into the American economy, taking jobs away from Americans and disincenting employers from making labor saving improvements. He cites as an example the California tomato industry as one which innovated after cheap labor Mexican labor dried up. Two comments: 1. A guest worker program such as the McCain or Specter bill will increase the cost of immigrant labor, thus to some extent rebalancing the labor costs which Samuelson sees as having gone askew. 2. He does not address what we do with today’s 7.5 million undocumented workers.
Below are some excerpts.
Economist Philip Martin of the University of California likes to tell a story about the state’s tomato industry. In the early 1960s, growers relied on seasonal Mexican laborers, brought in under the government’s “bracero” program. The Mexicans picked the tomatoes that were then processed into ketchup and other products. In 1964 Congress killed the program despite growers’ warnings that its abolition would doom their industry. What happened? Well, plant scientists developed oblong tomatoes that could be harvested by machine. Since then, California’s tomato output has risen fivefold.
We’d be importing poverty. Since 1980 the number of Hispanics with incomes below the government’s poverty line (about $19,300 in 2004 for a family of four) has risen 162 percent. What we have now — and would with guest workers — is a conscious policy of creating poverty in the United States while relieving it in Mexico.
It’s a myth that the U.S. economy “needs” more poor immigrants. They’re drawn here by wage differences, not labor “shortages.” In 2004, the median hourly wage in Mexico was $1.86, compared with $9 for Mexicans working in the United States, said Rakesh Kochhar of Pew. With high labor turnover in the jobs they take, most new illegal immigrants can get work by accepting wages slightly below prevailing levels.
Hardly anyone thinks that most illegal immigrants will leave. But what would happen if new illegal immigration stopped and wasn’t replaced by guest workers? Well, some employers would raise wages to attract U.S. workers. Facing greater labor costs, some industries would — like the tomato growers in the 1960s — find ways to minimize those costs. As to the rest, what’s wrong with higher wages for the poorest workers? From 1994 to 2004, the wages of high school dropouts rose only 2.3 percent (after inflation) compared with 11.9 percent for college graduates.
Business organizations understandably support guest worker programs. They like cheap labor and ignore the social consequences. What’s more perplexing is why liberals, staunch opponents of poverty and inequality, support a program that worsens poverty and inequality. We’ve never tried a policy of real barriers and strict enforcement against companies that hire illegal immigrants. Until that’s shown to be ineffective, we shouldn’t adopt guest worker programs that don’t solve serious social problems — but add to them.