The Consequences of Alabama’s New Immigration Law: Welcome to Economics 101

Alabama's tough new immigration law (2011)Since the passing of Alabama’s tough new immigration law several months ago, two major things have happened:

1. Many immigrant workers have left the workforce.

2. Employers – especially agricultural operations – have found it nearly impossible to replace the lost workers.

In retrospect, neither development seems particularly surprising. Many immigrant workers, whether they’re here in the United States legally or not, fear the heavy hand of government and will opt to find a more inviting environment than the one in Alabama today. For now at least, that environment is better in nearly all of the other 49 states.

And while the jobs no longer being done by immigrants may now be sought by American citizens – after all, the ~9.9% unemployment rate in Alabama is higher than the overall U.S. rate – the appetite for doing many of these jobs dissipates quickly when people are confronted by the reality of what is required to perform them.

Alicia Caldwell, an Associated Press reporter, spoke last week with some Alabama farmers to find out what has happened since Americans were hired to replace immigrant workers.

“Most show up late, work slower than seasoned farm hands and are ready to call it a day after lunch or by mid-afternoon. Some quit after a single day,” Caldwell reported in her AP article published last week.

As a result, farmers are opting to leave crops in the field rather than harvesting them.

What we have here is a classic Economics 101 lesson. If workers aren’t willing to do the jobs at a labor cost that will enable the products to be sold at a competitive price, the crops won’t be brought to market.

If agricultural operations in the whole world faced the same situation as Alabama farmers, it’s possible that a new labor/price equilibrium could be established. But not only is Alabama competing against other states where immigrant labor continues to be used, it’s also competing against other countries that produce the same crops.

The result? No one is winning. Not the farmers … not the immigrant workers … nor the unemployed Americans who have decided that ramaining unemployed is preferable to working a difficult or unpleasant job.

The Alabama state government is attempting to support the transition away from immigrant workers. A program started recently seeks to pair Alabamians interested in jobs with the state’s farming operations that need replacement labor.

So far, the results of this effort haven’t been encouraging, with only ~260 people registering interest in temporary agricultural jobs.

Out in the field, reporter Caldwell has found ample anecdotal evidence that underscores the disconnect between the “theory” versus “practical reality” of unemployed Americans taking advantage of these new job opportunities:

Tomato farmer Wayne Smith said he has never been able to keep a staff of American workers in his 25 years of farming.

“People in Alabama are not going to do this,” said Smith, who grows about 75 acres of tomatoes in the northeast part of the state. “They’d work one day and then just wouldn’t show up again.”

At this farm, field workers get $2 for every 25-pound box of tomatoes they fill. Skilled pickers can make anywhere from $200 to $300 a day, he said. Unskilled workers make much less.

A crew of four Hispanics can earn about $150 each by picking 250-300 boxes of tomatoes in a day, said Jerry Spencer of Grow Alabama, which purchases and sells locally owned produce. A crew of 25 Americans recently picked 200 boxes – giving them each $24 for the day.

Years ago, an old Russian emigré professor of Slavic history and literature at Vanderbilt University advised us students, “As you grow older and wiser, you’ll come to realize that the great issues of the day can’t be debated in black and white. Because the two sides aren’t black and white; they’re really shades of gray.”

Those words could well be applied to the immigration debate and its socioeconomic consequences. Certainly, one “black and white” issue that should be banished from the discussion is the notion that if all of the jobs done by illegal immigrants were to become available to Americans, our unemployment problem would be magically solved.

2 thoughts on “The Consequences of Alabama’s New Immigration Law: Welcome to Economics 101

  1. Having worked in these “fields” for quite a number of years in California’s state labor agency, all of this blog post resonates strongly with me.

    The problem of hiring sufficient, competent, reliable agricultural workers has been significant for many decades in CA (and other major agricultural states), and has been only partly addressed by legal means such as federal programs to bring in temp workers from other countries under U.S. Dept. of Labor (USDOL) and state supervision.

    There has been intensive lobbying at the state and Congressional level from employer associations and from the United Farm Workers union (UFW) and other organizations such as Calif. Rural Legal Assistance (CRLA) over how many and under what conditions. The growers want some greatly scaled-up, simplified version of the current laws, more like the old Bracero program of the fifties and sixties, to bring workers in for harvests and send them home when done.

    It’s no surprise that American workers do not want to take these jobs. Not only is the work itself difficult and tedious, but working conditions in the fields and the housing and other services provided by growers are minimal at best and often do not meet regulatory standards despite periodic inspections, complaints and lawsuits filed by UFW and CRLA. My agency was responsible for much of the monitoring of working and housing conditions, but there were too few staff and too many work-sites to stay on top of everything all the time.

    In every recession over the last forty years in California there have been increased calls by politicians, editorial writers, etc., to make sure these jobs go to U.S. workers … but, even in hard times, not many takers among the native-born or legal immigrants. In fact, there is always a standing USDOL requirement that jobs be advertised for U.S. workers, and that they be hired before any foreign temp workers are.

    My agency spent a lot of time and effort trying to recruit Americans for such jobs and got little but scorn from the employer community for failure to deliver the numbers they needed.

    Ultimately, I think, this problem may force one or more of several outcomes, as Mr. Nones suggests: easier policy on use of foreign labor (not politically popular right now); greater costs for ag products as wages rise to a level that attracts labor, or loss of U.S. agricultural capacity and increased imports from abroad.

    Alabama seems to be in the worst spot right now, but it’s an issue just below the media radar most everywhere else, too. Even without draconian state laws like Alabama’s, the ag laborers in CA, for example, are plenty paranoid just due to the constant threat of raids by the Immigration Service.

    My guess is most likely we’ll continue to muddle along with some sort of legal/illegal mix in the near-term. There is simply no way to provide the number of willing ag workers from the native-born U.S. labor pool. The general labor pool in the country has a similar and growing problem. Most people don’t even realize that a significant portion of the growth in our overall labor pool comes from immigration — legal and not.

    A demographer I heard at a National Governors’ Association conference in D.C. a few years ago pointed out that almost all of the growth in the labor force in the Northeast [sic, not the West or Southwest as one might have expected] in recent years was coming from immigration. And we have an aging workforce, so any long-term solution to the immigration issue must deal with these facts.

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