Labor Market Effects of Immigration Enforcement at Meatpacking Plants in Seven States

By Jerry Kammer on November 18, 2009

Thank you, ranking member Smith and Republican members, for the invitation to testify about two reports on how local labor markets were affected by immigration enforcement at seven meat packing plants in seven states.

Six of those plants--in Iowa, Minnesota, Nebraska, Texas, Colorado and Utah-- are owned by JBS Swift. In 2006, Immigration and Customs Enforcement agents conducted raids that resulted in the arrests of some 1300 illegal immigrant workers at the Swift plants. The seventh plant is owned by Smithfield, in North Carolina. ICE agents conducted raids there in 2007, arresting several hundred workers..

In addition to losing those who were arrested, the companies lost many others who worked on a different shift, but who did not report for work because they feared federal agents would return.

The companies’ response to the raids provided an opportunity to test the claim, often heard in the immigration debate, that many American businesses have to hire illegal immigrants because Americans are unwilling to do the work.

First I’ll describe the post-raid situation at Swift. All six facilities resumed work on the day of the raids, though at a reduced pace. To replenish its depleted ranks, Swift launched a campaign to recruit American citizens, green card holders, and refugees. It raised wages, provided bonuses to new workers, and paid relocation expenses. As a result, all the Swift plants were able to resume full production within four or five months.

As I was frequently told by current and former Swift workers, these are jobs Americans are willing to do--if they are provided decent wages and working conditions. Unfortunately, the meat packing industry has lost its status as a source of well-paid jobs in the blue collar middle class that flourished in our country after World War II.

Beginning in the 1960s, the industry was transformed by a series of cost-cutting measures. Plants were moved from unionized urban areas to rural locations. Skilled butchers were replaced by less skilled workers who made the same repetitive cuts thousands of times a day on what became known as the disassembly line. The industry also relied increasingly on a workforce of illegal immigrants who came mostly from Mexico, but also from Guatemala, El Salvador and Honduras.

Thus transformed, the industry employs a workforce whose standard of living has suffered severely. In 1960, meatpacking workers earned 15 percent more than the average manufacturing wage in the U.S.. By 2002, they were earning 25 percent less than the average in manufacturing. Government data also show that between 1980 and 2007 real wages in the industry, adjusted for inflation, dropped by a staggering 45 percent.

We have often heard from farmers in California and Arizona that if they improved wages enough to attract legal labor, Americans would be confronted with the $5 head of lettuce. But agricultural economist Philip Martin destroyed that myth by showing that since fieldworkers’ wages account for only six percent of the retail cost of lettuce and other crops, their wages could rise sharply without a major effect at the checkout counter. Similarly, the labor of meatpacking workers accounts for only seven to nine percent of the retail cost of beef and pork. So if wages were increased by a third, the cost at the grocery story would only rise by three percent, at most.

Time is limited, so I have just a few words about our second report, about the world’s largest pork processing plant, owned by Smithfield, in Tar Heel, North Carolina. In the early 1990s, most workers there were African Americans. But this changed during that decade, when foreign born Hispanics became the majority. There is strong evidence that the company had a preference for illegal immigrants because they were more likely to accept low wages and poor conditions and they were vulnerable to what a federal court called the company’s “intense and widespread coercion” aimed at defeating the union’s organizing efforts.

The 2007 raids at Tar Heel removed many illegal workers. Vacancies were soon filled by blacks, who were less subject to intimidation by the company and more likely to favor affiliation with the United Food and Commercial Workers union, which the company fought for years. As local newspapers noted, the demographic shift in the workforce after the raids was a key factor in the 2008 victory of the union in a vote at the plant. The Charlotte Observer wrote that the “raids may have finally sealed the union’s victory.” The Fayetteville Observer reported that “the new black majority proved to be the difference.”

In conclusion, I would observe that the immigration raids were undoubtedly a profoundly traumatic experience for the families that were affected by them. But it is also clear that enforcement had a profoundly positive effect in the lives of American citizens and permanent residents who needed and wanted these jobs.