I’ll just turn to cannibalism.
Well my point is, we pay people a fair amount in many industries and not everything skyrockets out of control. What’s more likely to happen is as labor goes up, more automation will be introduced. I’m told some products cannot be harvested by machines, but maybe there just isn’t enough incentive yet to put enough resources to try it differently.
There are people out there right now juggling 2-3 crappy jobs, working long hours, for almost nothing in somewhat harsh conditions… they might just switch jobs for 25 an hour… and make the same amount they make now or more with on job.
We have loggers, miners and all sorts of jobs in harsh environments that might do some of this work. It’s not easy felling trees either! And some of these jobs are seasonal, just like agriculture would be.
According to this site the recent years have seen apple prices in the $1.30 or $1.40 per pound range. So to get to $10/lb you would have to increase the cost of apples by about 700%.
Most ag business have labor costs at between 20% and 40% of total overhead. Taking a midpoint of 30%, to get a 700% increase in the price of applies, you would have to raise wages by about 2200%. Assuming a minimum wage of $7.25 an hour, that’s a wage of $150 per hour.
In other words, people say this scare crap like “apples will be $10 per pound” or “cabbages will be X $!!!”, but those numbers are laughably exaggerated. With a midpoint labor overhead of 30% of total overhead, doubling the wages of farm workers would cause prices of produce to go up by 30%. If we applied that to apples, we’d be looking at apples going for about $1.80 per pound.
Another example of actual numbers mattering.
Specifically in terms of inflation, you can’t just say “inflation bad!! !NOOOOOO!” - its the magnitude of the change that matters.
I just skimmed all these posts, but I applaud any discussion that can produce this!
My local supermarket has it’s cheapest apples at $1.99 a pound. If you are getting something like organic honeycrisps, it’s $3.99. That’s literally what they cost, on Saturday.
But the $10 a pound was totally made up. No math went into it.
The point was that if the price goes up much, I just won’t eat the apples. There are other fruit out there. Hell, there is imported fruit that’s being picked by people earning pennies that your apples gotta compete with.
And frankly, I like mangos more than apples anyway.
It’s just may. If you can jack up wages without raising the price of apples, that’s cool. Go for it. But I know actual farmers out here in PA, and their profit margins ain’t real big right now.
I just listened to the most recent This American Life earlier today, and the entire first half is about how messed up some immigration courts are. Specifically, the current administration’s attempt to process border cases quickly so as to deport illegals more quickly. There are judges being pulled from around the country to go down to the border and either do nothing at locations with no cases to hear, or be overloaded with a poorly organized deluge of cases that mostly can’t be properly heard.
The second half is good too, about the Democratic party’s inability to articulate what they stand for. Gonna cross-post that over in the Whither Democrats thread.
I know this :O. But my point was, the actual magnitude of the numbers matter. You’re saying that if apples went up too much you would just buy something else, which is fine. My point is, apples are unlikely to go up a huge amount, and also that when people imagine the inflationary effects, they are almost always imagining in an exaggerated fashion.
Yup. That was a great episode. The case of that guy that was stuck in court limbo waiting for someone to “prove” he was in jail before he could get his case reopened was nuts.
Well written & I agree 100% with everything you state.
If we can do a gun-check in 30 min to issue a firearm, I would like to think we can verify SS numbers - I’m not going to register on that link, but I’m going to assume it’s pretty fast.
It’s pretty cool you guys think having a national ID or some sort of verifiable or enforced ID will hamper illegal employment. Looking at places with actual ID systems, it does not seem to work that way, though.
In this side of the pond most countries have digitized national ID systems with easy and mandatory cross checking with IRS (well, the equivalent), and we do still have a lot of illegal employment. Sure, it will make those employers not be able to claim they didn’t know their employees were working illegally, but do you really think they care? It will just become submerged economy and the illegals will stop paying into the system. The best way to fight this is to ramp up inspections at companies suspect of the practice. But that’s not cheap (and obviously there’s a lack of interest since the system seems to expect a certain amount of illegal employment for profit).
Personally I have nothing against illegal employees on the low side of the wage scale. Anybody who is working illegally for those rates is probably not making it by choice.
Note that I don’t say illegal immigrants. Illegal immigration is not necessarily correlated to illegal employment. That’s why the ID checking is quaint and not really the issue. It just allows companies to pretend they are not hiring illegally (and have an easier time fiddling with the books).
Illegal employees tend to be illegal immigrants when the economy is good enough than the locals won’t work illegally (for the kind of wages and lack of benefits), and otherwise it tends to be locals working illegally to avoid paying taxes, but I don’t think immigration hits employment that hard (data suggest it doesn’t). I do despise illegal employers, though, because they manage to keep their middling business floating or generating profits through not paying enough to their employees.
But the job isn’t picking apples for $25/hour.
The job is migrant farm worker.
That means you are picking
Jan-Feb strawberries in Salinas
Mar-April tomatoes in Bakersfield
May-June cotton in Texas
July, Aug. in LA, MI, AL harvesting all kinds of stuff in the sweltering summer of the deep south
Sept. peanuts in Georgia
Oct. apples in Washingon
Nov. pears in Oregon
Dec. back in Watsonville. CA picking artichokes.
It means living in crappy camps or campgrounds sometimes without running water and moving your kids to six different schools in a year. Now at $25/hour they could afford to have a Winnebago and get clothes for the kids so life would be better than it is for today’s migrant workers making 1/2 that much. But no amount of pay is going to change toughness of the work, nor the need to constantly move to follow the crops.
There isn’t a lot of articles on migrant farm worker pays, as best I can tell wages have come up a few dollars hours in the last few years as the labor shortage has grown (and it is all piecemeal so that some folks are making $8 hour and the really good ones are making $16 at the same farm). But pretty much all of the articles I read say the number of native-born Americans working as migrant farm laborers is less the 5%.
Beyond this, the rest is purely conjecture. You are right “most American” isn’t the right measure. But I still believe that if tomorrow, all non-US citizen agricultural workers were deported, and farmers jacked up the wages for migrant farm workers to $25/hour, there would be severe labor shortages by the end of the season.
The working conditions are below what most American would be up with. Might there be enough American to do it in 2009 sure in 2018. I doubt
Back to your larger point, which is only lip service is paid to actually controlling illegal immigration,I agree with you there are helluva of lot cheaper and more effective ways of than building a fence or any other stupid Trump scheme. Cracking down on employers hiring illegal aliens is definitely the best way of doing it.
Many of us are very ambivalent about illegal immigration. On one hand, it is awful the working conditions for migrant workers and working 10-12 hours a day to make $100 is exploitive. But the conditions are no better and probably worse in Mexico and they’d only make $20/day there and if they could find a job in Central America the conditions are definitely worse and they only make $10/day. American farmers have tons of competitive advantage to allow them to still pay 5-10x more in labor cost than developing countries and still be competitive. Could they double the wages again and still be competitive? I think we’d say a dramatic decrease in US farm exports, even if the rise in US food prices were pretty modest.
A sensible immigration policy would involve things like guest workers who can ratch-it down or up depending on the US labor market. I’m not holding my breath.
You’re not getting a sensible immigration policy. First because some of your businesses like the current policy, and will fight for it, but most of all because it’s a useful political football, at least for the Republicans, maybe for the Democrats also.
The danger is that eventually the people who are constantly told immigrants are the problem will vote to fix it, whatever it costs, and the fix won’t be a sensible immigration policy.
On the issue of migrant farm workers, the “migrant” part is a function of low wages. These workers must migrate in order to put together enough hours at their low wage rate to survive. With higher wage rates, they could make higher wages during the season, then do something else (typically part-time or minimum wage supplemental work, or in some cases not work or focus on homemaking or caregiving) during the off season.
I feel like a lot of Americans are locked into a box of perceiving the illegal immigration issue a certain way (and IMO an incorrect way - focusing on the illegal entry rather than the illegal employment) by the assumptions people have built, fueled by manipulative framing of the issues and desultory/inadequate media coverage of the issue. As an example of the latter, what is the ratio of the media talking about border enforcement versus employer level enforcement over the last few years? The reality is the employer level is huge, 80 or 90% of the issue with the border being a small piece. But what most Americans hear, between the media and hard right messaging is “BORDER! BORDER! BORDER!”.
Juan, based on what you say, it sounds like your experience really isn’t relevant to the US issue. Things are quite different here. Here, illegal immigration is highly correlated with illegal employment. In the US, close to 100% of the illegal immigrants who are working are working illegally. And the proportion of the these immigrants who are working is quite high, in the 80% to 90% range. And most of this illegal employment is not black market / under the table work. Like I said above, about 4% to 5% of all labor in the US is “illegal but we’re not checking SS#s so we ignore the issue”.
The issue you mention of local workers working illegally to avoid paying taxes is not actually an issue I’ve heard much about here in the US. There is some black market / under the table employment going with local US workers, but my understanding is it’s an extremely small percentage.
So what Juan describes sounds very different from the US situation we are discussing.
And there we have the argument against the $25 wage for farmworkers. How much are some grapes worth to you, or a pear or artichoke.
There are mechanical harvesters out there now for many crops, they have even tried one for strawberries. I think if wages reached $25 you would see your favorite fruit and veggies become some kind of mechanically harvestable cardboard version of the original.
And iy is important to remember that most ag labor is seasonal and requires you to follow the harvests. How many people would do that?
Eh, this isn’t really true.
The Migrant part is because different crops require labor at different times of the year.
Generally, the picking season for most crops is extremely short. For a specific type of orange, for instance, you’re talking a picking season of a month. If you expand to all of a type of fruit, like “oranges”, in a particular region, you’re talking of a season maybe 3-4 months. But even there, you’re still gonna be moving around to different farms.
I don’t think you’re gonna be able to eliminate the migrant aspect of this just by increasing wages.
I think this is indeed probably the biggest force that will push back against raising wages for unskilled labor. Automation for unskilled tasks that merely require a delicate touch are increasingly able to be automated.
It’s the same thing that’s gonna push out humans of fast food industries if wages are forced up. Automation is at the point where you don’t really need humans to do this stuff… The only thing that’s keeping those jobs from being automated now is that there isn’t quite enough pressure to develop the specific automation solutions… but there will be soon.
Oh, I know, but I think part of it is because the job market/economy is really good (comparatively). By definition, all illegal immigrants will work under illegal employment, so there’s correlation in that direction, just not necessarily in the opposite (illegal employment does not need immigration). Also, illegal employment tends to happen as soon as there’s a way for it to.
I guess what I was trying to say is two things:
1- yes, by eliminating the possibility of illegal employment you will make illegal immigration inviable, duh, but the problem is the illegal employment itself, which would exist even if there’s no immigration. Unless we assume immigration is a problem anyways even if it doesn’t affect the job market (the cultural contamination take on immigration), which is something I (personally) disagree with but can be discussed. It’s just unrelated to the employment market, salaries and such. You don’t look at illegal employment as an anti immigration policy, you look at illegal employment because it fucks up the workers, period.
2- we have a lot of examples of modern, developed countries with full electronic ID and mandatory cross checks between employers and tax agencies, and still having loads of illegal employment, sometimes with relatively little illegal immigration. My guess is that mandatory ID/cross checks are implemented in the US, instead of suddenly seeing all this illegal work going away, companies would just shift into black market employment and be done with it. It’s a naive solution because it assumes the problem is due to complacency by the employers, and no due to premeditate wrongdoing. The push should be to make fines and punishments for illegal employment much harsher and ramp up the inspections.
Edit: and the US seems not to be devoid of a large underground economy (about 19% of income is black/not reported to IRS per this study -which granted, might be faulty-). Note that this is way higher than the 5% you estimate is legal but not checking the SS#.
My brief review of that paper is that it includes both unreported income as well as overstated deductions. It also does not differentiate between unreported income arising from illegal employment as opposed to unreported arising out of other transactions like sales of real or personal property. It also doesn’t differentiate between high earners under-reporting income and the low-wage segment we are talking about here.
Basically that article is a macro-level at the issues of under-taxation based on false or inaccurate tax reporting and thats a much broader category than the illegal low-wage employment we are discussing.
My rough estimate would be that the actual amount of wages from illegal employment in the US is in the 5-7% range, based on 4-5% “grey market employment” (income reported but using false SS#) and another 1-2% black market “under the table” employment. That’s based on dollars earned. Specifically, many of the people who work for cash under the table are not working that many hours or for very high wage rates, so the actual under-the-table dollars are in the 1-2% range.
However, I’m not an expert so if there is good evidence for a different number, I will accept that. However, good numbers are very hard to come by precisely b/c this market segment is not properly reporting income.
As to European levels of illegal employment despite mandatory ID and cross-checks, what kind of numbers do you mean by “loads”? I’ve given my estimate of illegal employment in the US at 5-7%. What do you mean by loads?
I think Spain, Greece and Italy can be at over 15%. Let me look.
Edit: Ok, I think the levels are similar, but you are talking percentage of wages and I was thinking of percentage of the labor force when I mean loads.
For example, this paper shows that in Spain we have 22% shadow economy (similar in range to the 19% I quoted above for the US). Illegal employment is obviously less than that since as you point out it includes other factors.
But if you don’t look at GDP but instead look at percentage of the working population (since, as you say, this employment focuses on the lower end of the wage scale), you are looking at 4 million people or about 18% of the labor force working without contract, protection or full reporting -that is, working legally and illegally at the same time-. I had several articles sourced for this, but can’t find a link to the -apparently three- papers the data comes from. I suspect these are rough estimations.
That’s about what I thought (the 15% quoted above) which I qualify as loads (almost one in five workers). Absolute irregular employment (without any contract whatsoever) seems estimated at about 1.5 million (with the other 2.5 only partially reporting their work). This is the bracket where illegal immigrants would fall in, but here less than half that number is comprised of illegal immigrants, most are legal nationals.
As an aside the above explains (partially) why our unemployment numbers are sustainable (economically, not morally).
I would guess a 7% of wages translates to a similar percentage of the labor force in the US. Maybe even more since your averages are weighted up due to higher income inequality, or maybe less. Hard to say.
My feeling is that should the US implement mandatory checks (and I think it’s a good thing, mind you) employment of illegal aliens will just move into full illegal unless a real attempt to inspect and control businesses is made.
What Timex said. Even at $25/hour there aren’t enough working months picking crops within a given region to make a living. Also the need to put in 10-12 hour days picking crops precludes other employment, meaning they’d have to quit the jobs they held in off-season.
We are seeing the rise of a different type of migrant worker. The semi-retired early retiree. These are couples in the 40,50, and 60s who have RV and travel the country between gigs. The may start the year off in Colorado working at a ski resort, go to Orlando in early summer and work at the theme parks there, and then at an Amazon warehouse in Nov. and Dec. The generally have some type of passive income, pension, or maybe 1/2 million in savings, so with a 1000 hours of work each at $10-15/hour, they can live a comfortable life style on 50K or so.