Testimony prepared for the U.S. House of Representatives
Committee on the Judiciary
Subcommittee on Immigration, Border Security, and Claims
June 15, 2000
By Mark Krikorian
Executive Director, Center for Immigration Studies
Good morning Mr. Chairman and members of the subcommittee. My name is Mark Krikorian, and I am executive director of the Center for Immigration Studies, a non-profit, non-partisan research organization in Washington, D.C., which examines and critiques the impact of immigration on the United States. The Center does not receive any federal funds.
Thank you for the opportunity to testify on the implications of H.R. 4548, the Agricultural Opportunities Act, which would create a large agricultural guestworker program for the first time since the Bracero Program was abolished in 1964. Other witnesses are likely to explore the detrimental impacts such a program would have on workers, on local communities, and on immigration law enforcement. These impacts are likely to be quite serious and I urge the members of the subcommittee to take them into account when considering this bill.
But I would like to explore a different impact of such legislation; namely, the danger it poses to American agriculture itself. The origin of guestworker proposals is the desire of farmers for what they consider an adequate labor pool at sufficiently low cost. The warnings of spokesmen for farmers are dire without such assistance from the government, they claim, agriculture will be crippled, with farmers going out of business, fruits and vegetable prices soaring, and America made vulnerable by dependence on food imports from abroad.
Such claims are not new. In the 1880s, when there were proposals to stop Chinese immigration to California, farmers responded that without Chinese farmworkers there would not now be one fruit tree or grape vine in the state where there are now ten.
Likewise, in the early 1960s, during hearings in California on proposed termination of the Bracero program, tomato farmers claimed that "the use of braceros is absolutely essential to the survival of the tomato industry." Congress discontinued the program anyway, but the results were not at all as the farmers had claimed with fewer workers available, the harvest was increasingly mechanized, resulting in a quadrupling of production over the next 30 years of tomatoes for processing, and a fall in real prices. (See Immigration Reform and U.S. Agriculture, edited by Philip Martin, et al., University of California Division of Agriculture and Natural Resources Publication 3358, 1995.)
This result highlights the threat that guestworker programs pose for America's agricultural competitiveness: By artificially inflating the supply of labor, government interference in the agricultural labor market reduces incentives for mechanization and other forms of productivity increases.
Today's Guestworker Program
In some sense, we have a guestworker program already it is called illegal immigration. It can be fairly described this way since, despite recent increases in border enforcement, there is no enforcement whatsoever inside the country, a result of repeated attacks on the INS when it does try to enforce the law. For instance, when the INS conducted raids during the Vidalia onion harvest in 1998, the modest number of illegals it managed to apprehend was dwarfed by the thousands of illegal aliens who abandoned the fields to avoid arrest. Within hours, employers and local politicians registered their displeasure, and by the end of the week both of Georgia's senators and three representatives sent a letter to the attorney general and the secretaries of labor and agriculture fiercely criticizing the INS enforcement action for its "lack of regard for farmers."
In response, the INS developed a "kinder, gentler" means of enforcing the law, which was also stopped cold. Rather than conduct raids on specific employers, Operation Vanguard sought to identify illegal workers at all meatpacking plants in Nebraska through audits of their personal records. Despite fears that as much as 25 percent of the workforce was illegal, the INS found about 4,000 workers, out of about 24,000, who appeared to be illegal, and scheduled interviews to determine their status. Three thousand of these workers turned out to be illegal aliens, and never showed up for their interviews, with the remaining 1,000 able to correct errors in their personnel or INS records.
Local law enforcement officials were very pleased with the program: "It's an excellent program," said Grand Island Police Chief Kyle Hetrick. "It's a positive thing. It's effective." Despite the initial promise of this new enforcement strategy, employers and politicians actively criticized the very idea of enforcing the law: "It was ill‑advised for Operation Vanguard to start out in a state with such low employment and an already big problem with a shortage of labor," said a former Nebraska governor who had been hired to lobby for an end to immigration law enforcement. As a result, plans to expand the program to other states and other industries have been scrapped.
The INS has gotten the message and ended worksite enforcement; in the words of Robert Bach, the INS associate commissioner for policy and planning: "It is just the market at work, drawing people to jobs, and the INS has chosen to concentrate its actions on aliens who are a danger to the community.
Apart from these repeated, and ultimately successful, attempts to obstruct law enforcement, the law itself is inadequate; Congress needs to permit the resumption open-field searches by the INS and to mandate an automated verification system to enable law-abiding farmers to distinguish between legal and illegal workers. Until that happens, it cannot be denied that we are tolerating today's illegal immigration, thus allowing it to function as a tacit guestworker program.
Threat to Agriculture
But whether the agricultural workforce is inflated through affirmative means by a formal guestworker program, as proposed in H.R. 4548 or tacitly through toleration of illegal immigration the result for American agriculture is the same: stagnating productivity and slowed mechanization, sowing the seeds of a competitive meltdown in the future, as it becomes increasingly untenable for American fruit and vegetable farmers to compete on the basis of labor costs with low-wage countries. Such competitive difficulties are sure to be followed by demands that Congress enact direct subsidies for farmers grown accustomed to relying on cheap labor. This would seem contrary to the Congress's recent moves to phase out many other agricultural subsidies.
The period from 1960 to 1975 roughly from the end of the Bracero program to the beginning of the mass illegal immigration we are still experiencing today was a period of considerable mechanization, with the average labor-hours per acre used in harvesting horticultural crops dropping 20 percent. But a continuing increase in the acreage and number of crops harvested mechanically did not materialize as expected, in large part because the supply of workers remained artificially large due to the growing illegal immigration we were politically unwilling to stop.
Further evidence of the harmful impact of mass immigration on agriculture is falling wages. According to a March 2000 report from the Labor Department, the real wages of farmworkers have fallen from $6.89 per hour in 1989 to $6.18 per hour in 1998. A new guestworker program is likely to continue this downward trend in farmworker wages. This may seem superficially appealing to farmers, but from a competitive point of view, competing with low-wage countries on the basis labor cost is a dead end no modern society will ever be willing to reduce farmworkers wages enough to match those paid in third world countries.
The importation of foreign farmworkers also leads to very inefficient use of labor, further lowering productivity. The same March 2000 Labor Department report found widespread underemployment the average number of weeks a farmworker works in agriculture has dropped from 26 weeks in 1990-92 to 24 weeks in 1996-98. The average farmworker spent only about 47 percent of his time in U.S. farm work, compared with 19 percent of his time unemployed in the U.S., 8 percent of his time in U.S. non-farm employment, and 24 percent of his time living abroad. This inefficient utilization of farm labor is also reflected in the fact that the unemployment rate for farmworkers between 1994 and 1998 was routinely more than double the rate for all occupations, according to a December 1999 report from the Congressional Research Service.
Ironically, the artificial expansion of the agricultural labor market not only dissuades our farmers from exploiting America's comparative advantage in technology and capital, but using cheap foreign labor to produce fruit and vegetables for export actually subsidizes foreign consumers, since about one-fifth of our country's fruit, vegetable, and horticultural production is exported. Subsidies for Americans are problematic enough, but subsidies for foreigners are difficult to justify in any conception of the national interest.
Is Farming Possible Without Foreign Labor?
There is little doubt that fruit and vegetable production could survive, and thrive, without importing foreign workers, whether illegals or guestworkers. In fact, even during World War II, at a time when 16 million Americans were in uniform, there was no economic rationale for the importation of foreign workers. The Bracero program was instituted at that time, not to ensure the continued production of food, but to prevent wage increases and possible unionization after 20 years of rural depression. (See "The Politics of Labor Scarcity: Expediency and the Birth of the Agricultural Guestworkers' Program," http://www.cis.org/back1299.pdf, by College of William & Mary historian Cindy Hahamovitch, Center for Immigration Studies Backgrounder, December 1999.)
An example of the improved productivity possible even in very labor-intensive crops is seen in raisin grapes. The production of raisins is one of the most labor-intensive activities in North America, with 40,000 to 50,000 workers harvesting the grapes in California's Central Valley during the three- to four-week season. Using conventional methods, the grapes are cut with a knife, placed in a pan, then laid on a paper tray for drying, and during the drying period, must be manually turned, then manually rolled and collected.
But starting in the late 1950s in Australia (where there is no large supply of farm labor), farmers were compelled by circumstances to develop a labor-saving method called "dried-on-the-vine" (DOV) production. (See Alternatives to Immigrant Labor? Raisin Industry Tests New Harvesting Technology, http://www.cis.org/back297.pdf, by California State University-Fresno researchers Bert Mason, R. Keith Stiegler, and Gregory T. Berg, Center for Immigration Studies Backgrounder, June 1997.) This involves growing the grape vines on trellises, then, when the grapes are ready, cutting the base of the vine instead of cutting each bunch of grapes individually. The fruit then dries naturally on the vine, at which point a tractor-mounted harvester is used to gently knock the raisins off into bins.
The benefits of this new method are significant: Labor demand at harvest time drops by up to 85 percent and total labor demand is spread out over the whole year; new vineyards planted for DOV harvest increase yield per acre by up to 200 percent; and the fruit is less susceptible to rain damage and is of higher quality because of fewer problems with dirt, sand, and mold. One farmer who shifted to DOV summarized the benefits: DOV "can reduce labor, reduce weather hazards, reduce environmental concerns of dust and chemical use . . . DOV is so good it's scary."
Has this high-productivity, innovative method of production been widely adopted? No. Only a handful of farmers are using it, most notably Lee Simpson of Simpson Vineyards near Madera (who, not coincidentally, entered the raisin business after a career in engineering, rather than inheriting his family farm). This is because the widespread availability of foreign workers is a disincentive to raisin farmers, whose average age is believed to be over 60, to make the long-term capital investment needed to retrofit existing raisin farms for DOV production. The enactment of a new guestworker program would further retard the adoption of this promising new technology.
In raisin production, a surfeit of labor has dampened innovation and productivity gains. An example of the reverse phenomenon, a labor shortage promoting dramatic steps toward modernization, is Florida's sugar cane harvest. In the 1930s, Eleanor Roosevelt decried the working conditions endured by sugar harvesters bending at the waist, using a machete, dealing with heat, mosquitoes, and snakes which had changed little since the Middle Ages. These conditions continued through the 1980s, when the sugar companies imported 9,000 to 10,000 West Indian guestworkers a year through the small H-2A program. Then the industry was hit by a persistent wave of lawsuits filed on behalf of farmworkers whose contracts had been violated by their employers. This proved so nettlesome that the employers calculated it would be more profitable to mechanize the sugar harvest than to honor all the legally required terms of their contracts with the farmworkers. By the 1992-93 season, 50 percent of Florida sugar cane was harvested by machine, and today virtually all of it is, resulting in dramatic increases in productivity and a more civilized work environment for the remaining workers.
A guestworker program's threat to the continued competitiveness of U.S. agriculture comes not only from the inability to compete on the basis of wages with Third World countries; there is also the danger that the slowing of technological innovation brought about by artificial infusions of labor will allow our economic competitors in other developed countries to leap ahead of us. This is perhaps most disturbing in the field of robotic harvesting. Automated picking of fruits and vegetables by a robotic system is the third wave of agricultural mechanization (after labor aids, which facilitate harvesting work but don't reduce labor demand; and labor-saving machines, which improve productivity and reduce labor needs). The development of viable robotic harvesting technologies is still in its infancy, though great progress has been made as computers, vision systems, and motion/manipulation control technologies have been enhanced. Unfortunately, because of the mass availability of alien labor in the United States, the European Union is well ahead of us in bringing this potentially revolutionary technology to market. Enactment of a new guestworker program, and/or failure to end today's mass illegal immigration, may help our competitors gain a long-run advantage in agriculture, an area where America has traditionally been the pacesetter.
What Would Happen
What are the likely consequences of failure to enact a new guestworker program, and success in curtailing the one we already have (illegal immigration)? There would be, as in everything, both costs and benefits:
- Some marginal, undercapitalized farms propped up by foreign labor would have to sell out to better-capitalized competitors or fold. Such a shakeout, though difficult in the short term, is inevitable when an industry loses the subsidies protecting it and is forced to rationalize and become more efficient and competitive. But the reallocation of capital and labor to more productive uses benefits the nation in the long run.
- There might be modest price increases. I say "might" because farmworker wages typically account for less than 10 percent of the retail cost of fresh fruits and vegetables, and even in the absence of a new guestworker program, there is no possibility that all illegal workers would disappear overnight; ending illegal employment, were we to make such a choice, would be a process, not an event, permitting farmers time to adjust. But even if the entire illegal agricultural workforce were somehow to magically disappear, the impact on supermarket prices would be extremely modest and short-lived: Research suggests that supermarket prices for fresh produce would rise about 6 percent during summer and fall (when imports are small and prices are lowest) for one or two years, before farmers adjusted to the new circumstances. In the winter and spring, the price rise would be even smaller, perhaps 4 percent for one or two years.
(See "How Much Is That Tomato in the Window?: Retail Produce Prices Without Illegal Farmworkers," http://www.cis.org/huffman&.htm, by Iowa State University economists Wallace Huffman and Alan McCunn, Center for Immigration Studies Backgrounder, February 1996.)
Such price increases are less than the variation between supermarkets, and would in any case apply to only a very small portion of the nation's food bill.
- Some crops now grown in the United States would be imported, primarily very fragile crops intended for sale as fresh produce that will have to be picked by hand for the foreseeable future; fresh produce represents a relatively small portion of fruit and vegetable production, since most fruit and vegetable production is destined for processing and thus better suited for mechanization. The phasing out of production of certain goods which are not suited to high-wage, capital-intensive methods is a natural consequence of modernization; subsidizing industries (or crops) which can no longer be produced economically without government assistance is simple protectionism.
- Productivity would increase dramatically, strengthening the long-run competitiveness of American agriculture. Only by emulating other industries, which have prospered by evolving beyond the low-wage production methods of the past can American agriculture remain competitive with the growing number of commercial agricultural producers overseas. Attempting to maintain the status quo through guestworker programs is a dead end which we will all pay for in the long run. As several noted agricultural engineers have written, while the U.S. was in the past the leading country in the world in mechanical harvesting, the majority of the research work in recent years is conducted outside the U.S. (See "Alternatives to Immigrant Labor II: The Status of Fruit and Vegetable Harvest Mechanization in the U.S.," by Y. Sarig, J.F. Thompson, and G.K. Brown, Center for Immigration Studies Backgrounder, August 2000 (forthcoming).
- Price increases, if any, would not only fade very quickly, but they would likely be followed by actual decreases in the real price of some fruits and vegetables, as was the case with processing tomatoes after the end of the Bracero program. This should not be surprising, given the proven power of innovation to reduce real prices, as demonstrated by the late University of Maryland economist Julian Simon's famous bet with Stanford ecologist Paul Erlich, which Simon won, that the real prices of five commodities (chrome, copper, nickel, tin, and tungsten) would all be cheaper in 1990 than 1980 due to innovation.
- Employment would stabilize, eliminating many of the political and legal controversies that have surrounded agricultural labor for many years. In other words, much of the regulation of agricultural labor issues would be rendered moot, or at least less pressing, with the gradual evolution of farm labor into more steady, year-round employment, marked by wages and working conditions more in line with the rest of our society.
Guest Worker Programs for the 21st Century, http://www.cis.org/back400.pdf, by University of California-Davis economist Philip Martin, Center for Immigration Studies Backgrounder, April 2000.
"Findings from the National Agricultural Workers Survey (NAWS) 1997-1998: A Demographic and Employment Profile of United States Farmworkers" Office of Program Economics Research Report No. 8, March 2000
"Farm Labor Shortages and Immigration Policy," Congressional Research Service, Dec. 20, 1999