Should the U.S. government intervene in the economy to preserve profits and prices in an otherwise un-economic activity? One that is of small economic significance and has nothing to do with national security?
Suppose there is a situation in which U.S. employers in the traditional Scottish kilts business say that they may have to close down the hand-loomed industry because 1) the American male population persists in preferring to wear pants; and 2) U.S. weavers were too expensive. The industry then argues that they have to bring in Scottish hand-weavers, at very low wages, or they will go out of business.
Should the government facilitate the planned exploitation of these weavers so that their employers' profits will remain high, and the price of the garments will remain artificially low?
To ask the question is to answer it. Such a move would be bad public policy.
But in a roughly comparable situation, a "crisis" has arisen because the Trump administration has not (yet) bowed to the demands of the Maryland seafood industry to bring in still more H-2B crab pickers from Mexico, as we are told in a particularly ill-informed report that appeared in both the Baltimore Sun and the Washington Post last week.
While some on the right decry what they see as a tilt in the media in a liberal direction, this story is the exact opposite. It does not deal with a public policy issue fairly, showing both sides of the question; it was written with only input from the industry, and with no regard for either the basic economic issues, the points of view of neutral observers, or those of workers in the crab-picking industry.
By way of background, the extraction of crab meat is a tedious, not-yet-automated activity, in which relatively small bits of meat must be pulled out of the various interstices of small dead creatures covered with natural armor. It is a pleasant meal if you like seafood and do the crab dissection yourself, but it is an unattractive chore if you are doing it hour after hour, day after day, for below-market wages — which the employers want to maintain. The activity takes place in the southernmost counties of Maryland's most depressed section, the Eastern Shore.
The employers in the seafood industry have been able to avoid the local labor market for decades by bringing in ill-paid and docile Mexican women through the H-2B program to do this seasonal work.
Ironically, this was done in past years with the enthusiastic support of former Sen. Barbara Mikulski (D-Md.), who on every other issue held strongly liberal positions. In a work of real finesse, she managed to divide the annual ceiling for 66,000 H-2B workers into two halves, which gave the Eastern Shore employers a leg up on other users of these workers (such as landscapers, the largest users of the program). Under this arrangement, what had once been one, year-long ceiling was divided into two half-year ceilings, and the timing was good for the seafood industry. They got their worker orders in before the landscape people did in the second half of the fiscal year, and got all the low-paid help they wanted.
This year the desire for cheap H-2B workers is higher than in previous years, and thus there has been a mismatch between the congressional ceiling and the employers' requests. As a result, for the first time in the H-2B field, the administration called for a lottery.
Or as the caption under a photo in the Post put it: "crab houses were unable to get the visas they needed after the Trump Administration began to award them in a lottery instead of on a first-come, first-served basis."
Clearly a lottery is one way of handling such a problem — though I would prefer an auction, with the workers going to the employers offering the highest wages. (As a Democrat I get a big kick out the caption's implication, that the Trump administration is being accused of fair play in this matter.)
The newspaper report does not mention such things as the low wages paid to the H-2B crab-pickers, so low that even in the most depressed of Maryland's counties the industry cannot, or more likely will not, seek to fill these positions the normal way, by hiring local people.
The unemployment rate in March was 4.3 percent for the state as a whole, and was more than 2.5 times as much in Worcester County (the highest in the state) at 10.9 percent. (It was 8.2 percent in adjacent Somerset County.)
Nor does the article deal with the fundamental attraction to employers of the semi-indentured nature of these workers that comes with their nonimmigrant status; if they displease their employer they not only lose their jobs, they get kicked out of the country. Further, if you are dealing with a population (the Mexicans) that have few economic opportunities in the off-season, and if you pay by piecework rates, as is the case, you get an unreasonable amount of product from the people involved for a small investment.
Some years ago I heard of an academic study, which I cannot cite anymore, regarding one of the nastier aspects of the use of H-2B workers along the Eastern Shore. The crab picking season starts slowly, but instead of bringing in the workers gradually to meet the growing seasonal labor needs, many of the employers (many of whom own the rundown housing used by the workers) bring them all in early so as to maximize the rent they pay for otherwise empty houses. This practice may no longer exist.
Were the H-2B workers not available, wages would rise and so would the price of crab meat, and perhaps this might restrict the growth of the industry.
What is clear to everyone but the reporter on this story is that should wages rise — God forbid — that would reduce the industry's profit levels.