April, 2006

Fruits of Thought

Fixing Wages Or Immigration

Both national produce trade organizations have joined the call for a guest worker program to maintain an adequate labor force to plant, tend and harvest crops. It is often stated that 70 percent of the farm labor force in the United States is illegal and that a strict enforcement policy would lead to a loss of billions of dollars in production.

Although politically these organizations need to be responsive to grower groups, it is not clear that the arguments being made are persuasive.

It is not even clear the produce industry actually has a unified position, or even a unified economic interest. Even if one accepts every argument as true, none of it points to a shortage of fruits or vegetables due to a lack of labor, certainly not in the long run. It points only to more imported produce. Why should a supermarket chain, wholesaler or restaurant chain care where the produce it sells comes from? The board members of major broad-based national associations, such as PMA and United, are going to feel a need to support important constituencies for whom getting a guest worker program in place is a high priority issue, but not all wholesalers, retailers and foodservice operators are on board with this option.

It is also not clear the dire predictions will all come true, regardless of immigration laws. The assumption is that this is simply work Americans will not do. Maybe, but this is counterintuitive. In the days when Hunts Point was considered Fort Apache and people perceived they were taking their lives in their hands to go in the neighborhood, they managed to find workers for night, outdoor jobs that often involved heavy lifting. How? They paid the vig. They paid significantly higher wages than people could get for cushy desk work in Manhattan.

Philip Martin, a professor at UC Davis, has studied this area and has some intriguing findings: In 2000, farmers received an average of 16 percent of the retail price of fruits and 19 percent of the retail price of vegetables. Farm labor costs typically represent a third or less of a farmer’s revenue.

The average household spent only about $370 a year on fruits and vegetables. Of this, farmers received about $65, which means farm labor received only about $22 from each household each year. Put another way, U.S. households pay a little over 40¢ a week for farm labor.

Even if farm wages were doubled, and all of this cost were passed on to consumers, it would cost the average family only an additional 40¢ a week. And this significantly overstates the effect of changes in U.S. labor prices because a large proportion of fruits and vegetables are imported already.

Is it obvious that if farm worker wages were doubled or tripled nobody would want the job? It will be difficult to make the case that there is a need for a massive guest worker program if the goal is to avoid costing each household less than a buck a week. And isn’t it likely that if higher wages became the norm research and investment in new laborsaving technology would then make sense and reduce the cost to an even lower level?

People in the produce industry are Americans, and many of us grew up believing that all work has dignity. So, the problem with a guest worker program is obvious: What is it about these particular people that makes them suitable to live in our country, labor in our fields, but not become Americans?

How practical is it anyway? Barring patrolling fields with machine guns, won’t any guest worker program quickly become an illegal immigration problem? Are we going to ban sex while in America? Any child born here is an American citizen, so what are we going to do? Throw the kid into an orphanage and deport the parents? And how can any program stop people from slipping away and merging with the 11 million illegal aliens already in America?

The illegal alien problem is big and must be resolved. It encourages disrespect for the law and, post 9/11, every undocumented alien poses a security risk. Congress is divided. One group of senators wants a “respect the law” policy. No amnesty, no favored treatment. Another group wants illegal aliens to have a chance to earn permanent visas by paying a fine, back taxes and taking English classes. Still other senators want a base policy that is strict but provides exceptions for those who have laid deep roots in America.

It may not be immigrants who are the problem; most come to the United States to work and build a life in their new country. The problem may be our broader culture that rejects the “melting pot” our grandparents and great-grandparents knew in favor of a “salad bowl” in which people maintain their distinct ethnic identities.

The demand for work defined by our founding immigrant experience when John Smith commanded the settlers at Jamestown, “If you don’t work, you don’t eat”, has been muddied by a welfare culture loathe to hold people responsible for themselves.

Politics always makes for strange bedfellows, and it is quite possible that an energetic produce industry will get some kind of guest worker program though.

Immigration policy, however, is important not just to the produce industry but to the future of our country. One wonders if it isn’t in all our interest to lobby for some kind of program to test at what wage Americans could be persuaded to do this work.  pb