If you can’t get your socialist and nativist friends to read an economic primer, maybe you can at least get them to read this interesting article. No, it’s not intentionally a reply to common economic fallacies that the public holds true, but it functions that way all the same. It has it all, really.
Nominally, it’s about outsourcing farms to Mexico. See, all other things being equal, farms would like to hire workers here at home, but workers here at home can be too expensive. So, all things but that being equal, they’d like to hire illegal immigrants here at home, but that’s risky. It wreaks havoc with your production quotas when your workforce can vanish overnight in an INS raid, you see.
Recent Immigration and Customs Enforcement raids have targeted major agricultural producers, including Del Monte Fresh Produce in Portland, Oregon, and several large packing plants across the nation - scaring away immigrants and persuading many agricultural employers to clean up their hiring practices.
“Employers can’t find legal workers to replace this huge number of illegal workers,” said James Holt, an agricultural labor economist and independent consultant based in Washington. “Their only option is to go where the workers are.”
So there’s one response to the “close the border” crowd. Thanks to your unwillingness to allow cheap labor to come here, we send our businesses over there.
But neither is it all about labor:
Many of the growers, once based in California’s Salinas Valley, are also heading south to escape high land prices and water shortages.
Most of the people focused on “outsourcing” seem to think it’s only the cost of labor that causes companies to leave home, but it isn’t at all. It’s prices in general. In fact, most companies would, all other things being equal, prefer to hire qualified US labor:
The problem is that cheaper labor in Mexico often is offset by lower productivity and high training costs, especially when it comes to enforcing U.S. food-safety standards.
“The only thing that’s cheaper down here is diesel fuel and the labor per day,” Scaroni said. “My productivity is down 40 percent” from U.S. levels.
But sometimes it’s worth it all the same:
Farm workers at U.S. companies in Mexico make two or three times Mexico’s minimum wage of $4.80 a day. But they still earn far less than the average $9.60 an hour that field workers in the United States made in January 2008, according to the U.S. Department of Agriculture.
And note that bit about how they make two or three times minimum in Mexico. So US companies aren’t “exploiting” them, as the popular leftist narrative would have it. It’s just that Mexico happens to be a lot cheaper in general.
Best of all, we get confirmation for the fact that immigrant workers are largely not crowding out native workers in this field:
As the United States heads into a recession, more native-born workers might consider agricultural work if wages were high enough, said Harley Shaiken, director of the University of California at Berkeley’s Center for Latin American Studies.
“Labor shortage always is a question of at what pay rate,” Shaiken said. “Very often, if the wages are artificially low, it will be very difficult to find a work force.”
Just take out the ill-conceived “artificially,” and you have an admission that US workers won’t do the kind of work being offered at the going wage rate. Hence, all the jobs for immigrants.
So this article really has it all in terms of dispelling popular myths about outsourcing. Let’s review what they are.
First, cracking down on illegal immigration is effective at sending immigrants home - it’s just that it tends to send their jobs with them. Second, outsourcing isn’t only about labor cost. It’s a general “cost of operation” equation (and certainly not an evil plan by paraditic companies to lower their bottom line at any human price). Third, outsourcing isn’t a magic cure. Labor productivity matters, and if the quality of labor here at home is good, it goes a long way to keeping jobs here. Not that you’ll see John Edwards advising people to work harder at any of his rallies, mind you, but it shouldn’t surprise any sensible person that the best job-security advice you can give someone remains “do your best.” Fourth, outsourcing doesn’t exploit locals. In general, it gives them better jobs than they could have found otherwise. Fifth, many of the jobs that go to immigrants here at home are indeed the kind of work that it’s hard to find American laborers to do. And last but not least - cheap products are good for us here at home. Food prices are rising. They may rise even more if we have to start paying Americans $20/hr to pick our food for us. So, the conclusion is YAY OUTSOURCING! Or, in technical terms, bravo comparative advantage. Pass it on.