The economics of the Swift meatpacking plant raids of 2006

The Center for Immigration Studies issued today a thoughtful analysis of employment at the Swift plants after the 2006 raids. The study is: The 2006 Swift Raids: Assessing the Impact of Immigration Enforcement Actions at Six Facilities. I have posted on the Swift raids in the past. The CIS study, authored by Pulitzer Prize winning journalist Jerry Kammer, goes into depth about the multi-decade meat-packing business trends which ended with Swift having, by his estimate, 23% of its production workers being illegal immigrants. And he writes about the aftermath of the raids on employment, wages and community.
Here is a paragraph from the study:
“One of the most important findings of this analysis is that these six Swift plants could operate without the presence of illegal workers. New employment screening adopted by the company, the raids themselves, and continuing efforts by Swift to employ legal workers, dramatically reduced the illegal share of workers at all of these facilities. Yet, all the facilities continued to operate and all returned to full production within a few months. Moreover, this recovery was accomplished during the first half of 2007 when national unemployment figures were still low and the current recession had not begun.”
A summary:
The 2006 Swift Raids: Assessing the Impact of Immigration Enforcement Actions at Six Facilities By Jerry Kammer March 2009
On December 12, 2006, about 1,300 illegal immigrants working at six meat processing plants owned by Swift & Co. were arrested in the largest immigration enforcement action in U.S. history. Other illegal workers, fearful of future raids, stopped reporting to work. Additionally, in the months prior to the raids, new employee screening by Swift led to the loss of about 400 illegal workers. The plants are located in Iowa, Minnesota, Nebraska, Texas, Colorado, and Utah. This report examines the raids and their aftermath.
Among the report’s findings:
* As is the case in the entire industry, work at the six Swift plants is characterized by difficult and dangerous conditions.
* Like the rest of the industry, workers at these facilities have seen a steady decline in their standard of living. Government data show that the average wages of meatpackers in 2007 were 45 percent lower than in 1980, adjusted for inflation.
* We estimate that 23 percent of Swift’s production workers were illegal immigrants.
* All facilities resumed production on the same day as the raids. All returned to full production within five months. This is an indication that the plants could operate at full capacity without the presence of illegal workers.
* There is good evidence that after the raids the number of native-born workers increased significantly. But Swift would not provide information on how its workforce has changed. Swift also has recruited a large number of refugees who are legal immigrants.
* At the four facilities for which we were able to obtain information, wages and bonuses rose on average 8 percent with the departure of illegal immigrants.

* There is a widespread perception among union officials, workers, and others in these communities that if pay and working conditions were improved, it would be dramatically easier to recruit legal workers (immigrant and native).
* Worker pay has a small impact on consumer prices. Research by the USDA and others indicates that wages and benefits for production workers account for only 7 to 9 percent of retail meat prices. This means that if wages and benefits were increased by one-third, consumer prices would rise by 3 percent at most.
* Research by the United Food and Commercial Workers union indicates that pay to production workers accounts for only about 4 percent of consumer costs. If that is correct, a 50 percent increase in wages would cause only a 2 percent increase in consumer prices.
* Turnover is high at all Swift plants, ranging from 40 to 70 percent per year. Swift accepts high turnover as a cost of pursuing a business model that emphasizes high-volume production. It spends heavily to replace workers rather than seeking to retain workers by slowing production.
* High turnover imposes severe stress on local communities and social service agencies. It makes transience and upheaval a constant problem for the communities. Many residents resent the price their community pays to have the Swift plant as a large part of their local economy.
* Swift has tried to reduce the employment of illegal immigrants with more rigorous checks of documents presented by new workers. Several months before the raids, the company contracted with the Tucson-based Border Management Strategies for advice on hiring practices.
* In addition to pay increases, Swift introduced a number of methods to attract workers after the raids. The company paid bonuses to new employees, and to current employees who recruited others. It also advertised heavily, paid relocation expenses, and provided daily transportation from distant population centers.
* Reaction to the raids varied widely within these communities. Many members of the communities were enthusiastically supportive of the enforcement action, while other were sharply critical.
* The Swift plants in Marshalltown, Iowa, and Hyrum, Utah, illustrate the immigration connections that were established during the 1942-1964 era of the braceros and extended through the 1986 amnesty. Many relatives and neighbors of former braceros now work at Swift plants.