Bloomberg reports on Alabama’s recent immigration crackdown:
When Tuscaloosa, Alabama, begins rebuilding more than 7,200 homes and businesses leveled by an April 27 tornado, it may find itself missing a workforce capable of putting the city together again… Tuscaloosa County’s 6,000-strong Hispanic population –including roofers, Sheetrockers, concrete pourers, framers, landscapers and laborers — is disappearing, he said, before a law cracking down on illegal immigrants takes effect.
The obvious question to ask is whether there be others who step in to take the jobs these immigrants would have taken at the wage that will be offered. This question, which I go into detail on here, does ignore one crucial aspect of the problem. The cost to employers is not simply higher wages per hour, but higher unit labor costs. That is, for a given unit of value-added output, what happens to the total cost of labor? Wages may only need to go up by 10% in order to find workers willing to replace illegal immigrants, but if the quality of work goes down -if the workers are slower, sloppier, etc.- then unit labor costs may double or more.
You can see this implied in the Bloomsberg article where a contractor says “It’s not the pay rate. It’s the fact that they work harder than anyone. It’s the work ethic.”
The lesson can be seen in Georgia’s attempt to replace illegal immigrants with probationers:
For more than a week, the state’s probation officers have encouraged their unemployed offenders to consider taking field jobs. While most offenders are required to work while on probation, statistics show they have a hard time finding jobs. Georgia’s unemployment rate is nearly 10 percent, but correction officials say among the state’s 103,000 probationers, it’s about 15 percent. Still, offenders can turn down jobs they consider unsuitable, and harvesting is physically demanding.
The first batch of probationers started work last week at a farm owned by Dick Minor, president of the Georgia Fruit and Vegetable Growers Association. In the coming days, more farmers could join the program.
So far, the experiment at Minor’s farm is yielding mixed results. On the first two days, all the probationers quit by mid-afternoon, said Mendez, one of two crew leaders at Minor’s farm.
“Those guys out here weren’t out there 30 minutes and they got the bucket and just threw them in the air and say, ‘Bonk this, I ain’t with this, I can’t do this,’” said Jermond Powell, a 33-year-old probationer. “They just left, took off across the field walking.”
Mendez put the probationers to the test last Wednesday, assigning them to fill one truck and a Latino crew to a second truck. The Latinos picked six truckloads of cucumbers compared to one truckload and four bins for the probationers.
This isn’t a knock on the probationers. Despite being labeled “unskilled” work, this is clearly an extremely difficult job that even healthy, able-bodied adults can’t just pick up and do. Yes, for a high enough price the probationers can probably be induced to stay out in the fields all day. But with wages moving up at the same time productivity is moving downward, it’s not hard to see how employers of illegal immigration might be forced to close up shop as business becomes unprofitable.
So remember this when you read about low-paying jobs illegal immigrants are doing and people tell you that high school students or the unemployed would do them for a couple dollars an hour more: it is not hourly wages that matter, it’s wages per value added output.
8 comments
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Wednesday ~ June 29th, 2011 at 11:04 am
Sister Y
I wonder why people seem concerned with immigration as a threat to jobs, but not the extensive and growing use of prison slave labor.
From a cruel perspective, the probationers here just haven’t been made desperate enough to do this work for this pay by having all their other options removed.
Wednesday ~ June 29th, 2011 at 12:29 pm
Th
If I gave you a million dollars to run a marathon in 8 minute miles tomorrow, would that be enough incentive to be able to do it? Of course not. My brothers and I would invite our football and basketball teammates out to pick up hay or prime tobacco on our farm and then laugh at them for not being able to keep up with my little sister. It takes a lot of strength and stamina to do this work and it doesn’t suddenly appear with higher wages – it comes from doing the work every day all day.
Going rate to prime tobacco in my area in the late ’60′s was $13 a day because the local high school kids who did the work were not used to the work and needed lots of breaks. I imagine the farmers wee not thinking they would have to return to this.
Wednesday ~ June 29th, 2011 at 1:51 pm
Sister Y
I’m the wrong person to ask, because I run ridiculous distances every week – for the right incentive (not money), I might be able to pull of a 3:30 time. But look backward in time at my incentives before: I can do that because I’m so miserable I have to run all the time to feel better. Similarly, illegal immigrants and your sister presumably had no choice but to get into the condition of being able to do the hard work. If the probationers were miserable enough, presumably they’d get into that condition, too.
Likewise, prison slaves have no choice.
Misery breeds value.
Thursday ~ June 30th, 2011 at 1:08 pm
seanla
The idea that picking cucumbers or baling and stacking hay is extremely difficult work is ludicrous. If your little sister could do it, then by definition, it’s not difficult. Your football teammates just didn’t want to do it. That’s different from not being able to do it. I picked cucumbers, melon, corn, beans and strawberries on my grandparents’ farm in Southeast Texas from age 8 to age 16. It was hard work but in no way “extremely difficult” as Adam posits. I was a pudgy white boy from California; if I could do it, by definition it was not extremely difficult. The mindset that “forcing” people to do these types of slightly physical jobs (for good pay) is akin to slavery is idiotic and emblematic of why our unemployment issues persist. We can’t all be bloggers, DJs or celebrity stylists.
Wednesday ~ June 29th, 2011 at 3:30 pm
Th
My first thought after hitting “post comment” was that my luck would be that you are a serious runner. Anyway, my point is that even the hard up would not be able to provide the productivity for weeks, if not months. Certainly not this harvest season and it is not due to lack of will or incentive. We will all feel the misery at the produce aisle. Maybe the value we breed is to overturn this mindset.
As to prison labor, was it all that long ago we were vilifying China for using prison labor? Georgia has experience with that, also. A chicken processing company in south Georgia was raided and lost most of its work force. They tried to keep going by bringing prisoners from the state prison nearby to work. Prisoners with really sharp knives, sounds like a great combination.
Thursday ~ June 30th, 2011 at 9:37 am
Johnnie Linn
Would not work of this sort when you take breaks be compensated as piecework? Doesn’t Mr. Tallyman tally me bananas?
Tuesday ~ August 2nd, 2011 at 11:09 am
FT Alphaville » Was demographics destiny after all?
[...] in California and elsewhere. Maybe one of the first such shocks. See Scott Sumner, for example, or Adam Ozimek. Although data have always been hard to find and causation might be the other way round — as [...]
Thursday ~ October 6th, 2011 at 10:30 am
Tonya
America is suffering an obesity crisis so maybe a lol hard work is what we need. I don’t get why we pay sports players and movie stars so much but a teacher very little. Our priorities are messed up. We have to begin somewhere n though this may not be easy its the right thing to do. We need to stop the mentality of entitlement and appreciate what the immigrants see- opportunity to EARN a living. Americans want cheap products but its costing jobs cuz wer outsourcing the labor to make all the junk wer collecting. It’s bout time we start doing the right thing even if its not easy.