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Produce Business

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Looking For Clarity On Immigration Policy 

Jim Prevor’s Perishable Pundit, October 4, 2011

The situation regarding E-Verify has put the industry between a rock and hard place. The industry is dependent on undocumented laborers on the production end. The restaurant industry, an important customer, also depends on undocumented labor. Requiring that all employees be vetted through the E-verify system would thus leave the trade without sufficient workers to get the crop harvested and would impact sales.

Yet the industry can’t very well become an advocate of illegal activity and thus can’t very well oppose E-verify. So the official position is that mandatory E-Verify is fine, provided that a guest worker program simultaneously is put into place to provide a legal avenue for the trade’s labor needs.

This sounds good, but is somewhat non-responsive to the complaints of those pushing for mandatory E-verify. Although lawless behavior is one of their concerns, these advocates would not be satisfied with merely giving all illegal aliens a legal status. The people who want mandatory E-verify, want to see American citizens get these jobs. Other advocates decry the cultural influence and what they see as the cost of low wage foreign labor on the country. None of these problems are solved by simply having a legal guest worker program.

Besides, the enforcement of immigration laws has been so skimpy, and our legal structure is so inhibiting, that skeptics doubt much will be done if the guest workers don’t go home.

If a woman working here on a guest worker program has a baby, that baby is an American citizen. Are we going to throw Mom out and put the baby in foster care? Would anyone think that a good solution?

Right now there are loads of people who come into the US legally on a tourist or other visa. They are supposed to leave by a set date. If they don’t, nothing really happens. So skeptics don’t really believe that if a guest worker goes AWOL that anyone is going to be sending out the FBI to find him.

This all makes any kind of compromise almost impossible. If the confidence isn’t there that a compromise will be enforced, what is the point of compromising?

There also is less unanimity within the industry than one might expect on such an issue.

We have written about immigration before and heard from many industry members including some who told us that they have seen mechanization decline over the years because of low wage rates. Some also pointed out that the unskilled immigrants led to gangs and other problems in places such as Salinas. You can see one of the notes we received regarding these matters in a piece we titled, Pundit’s Mailbag — Immigration.

Just recently Robert Guenther was conducting one of United’s Produce Industry Luncheons at the new Philadelphia Wholesale Produce Market. When he discussed E-Verify and United’s position involving tying this to a guest-worker program, one of the attendees spoke up and demanded to know why these jobs couldn’t be given to unemployed Americans.

Robert explained that experience had shown that Americans were unwilling to take these jobs. The attendee then said that if you throw them off welfare and make them work or starve, they will take the jobs.

Robert was too polite to tell the gentleman that he may well be right, but he lives in an alternative universe and United has to work within alternatives likely to be adopted.

In truth the argument that no Americans will take these jobs has a lot of caveats that the industry doesn’t express well. People do things as a result of both carrots and sticks.

To our commentator in Philadelphia’s point, we really have absolutely no idea what kinds of jobs people might do if society was prepared to use some sticks. That is to say that if we said that there was no unemployment insurance, no food stamps, no Medicaid, no subsidized housing, no welfare of any kind – perhaps people would accept whatever jobs they could get rather than die in the streets.

This is an interesting question, but almost irrelevant to policy because nobody is actually advocating this plan on the national stage.

Nobody who believes in capitalism can accept the notion that is commonly promulgated that nobody will take certain jobs. If half of the explanation for why this phenomenon exists is that there are generous welfare benefits that provide most of the benefits of the job with less work, the flip side is that wages and working conditions have not been raised to a level that will attract the workers.

Although the industry likes to point to the relatively high hourly wage paid to migrant workers, people often seem to evaluate the annual earnings they can get at a particular job or line of work, not the hourly wage.

When my family was a large importer of fresh produce, we had an import division in which we kept a whole team of salespeople and support staff on salary all year long. These people worked like dogs during the season, sometimes 24 hours a day, but we had few imports the rest of the year so they sold a few coconuts and knocked off.

We paid these people annual salaries because we had to…. because it was the only way to attract the caliber of people we needed to be available when we needed them.

Just as we have no idea if we could get farm workers if society would eliminate welfare as a kind of stick, we also have no idea if we couldn’t get Americans to be farm laborers with a carrot. What if we offered workers $100K with year-round employment, company car, educational reimbursement, medical, dental, pension plan and generous vacation time to tend to the physical difficulties of harvesting crops?

The real argument is not that no American would ever take the job; it is that offering a wage package sufficient to entice Americans to do so would price American agriculture out of business, at least on labor-intensive items such as produce and nursery products. Put another way, the wage necessary to entice Americans to do this work would only be sustainable if the US imposed massive tariffs on imported produce.

Economists would mostly say, so what? Businesses and whole industries are lost every day as comparative advantage swirls and leads to Schumpeterian “creative destruction,” as industries rise and fall where they make the most sense.  In this point of view, if the U.S. can’t compete growing produce, it shouldn’t and should do something else.

This is a tricky wicket, though, as the U.S. can compete. We have the land, the technology, advantages in transportation costs to major markets, and we have plenty of labor in Mexico and other nearby countries anxious to come here and do this work. So it is not precisely that other nations have a comparative advantage over the U.S. in growing produce; it is more as if as a result of our dysfunctional immigration policies, we are choosing to give other countries a comparative advantage.

Of course another point is that even with high tariffs, though the domestic industry might survive, the high prices might cause people to eat less produce. This could harm public health as well as the industry.

The macro issue is what is our immigration policy actually attempting to achieve? We’ve been fortunate from time to time to have our pieces linked to by The Volokh Conspiracy, which is among the most influential legal blogs in the country. You can see some of these links here and here

Well, Eugene Volokh, a law professor at UCLA, recently tried to rethink the intent of American immigration policy in a post he titled, Immigration and the Future of the United States:

How can the U.S. maintain its standard of living, and its position of world leadership (technological, economic, and political)? Obviously it’s getting harder, partly because we’ve been so successful at sharing our free enterprise economic model with the world (a model that we inherited from others, though we improved on it), so that countries that once couldn’t effectively compete with us economically now can compete. And though the surge in international trade benefits us as consumers — and often as producers — as well as competing with our producers, competing with lower-wage countries has naturally gotten harder as international trade has gotten freed up.

Of course, we might be able to improve our competitiveness in various ways, such as improving our educational system, removing counterproductive regulations and taxes, and so on. But again these sort of ideas can be copied by our competitors — to everyone’s aggregate benefit, but in a way that reduces our leadership position.

We do, however, have one huge advantage over many countries that is hard to compete with: We have a long-term history of political freedom, political stability, economic freedom, military security, and relative freedom from corruption. This is something that other countries can’t reliably copy, partly because it takes a long time to establish relatively certain protections along these lines.

Moreover, I think that on balance size does matter when it comes to national influence. China and India are especially important players partly (though, of course, not solely) because they’re so big, and we have long benefited from this as well. A materially larger population would obviously cause density problems, including in places like my own Los Angeles, but I suspect that it is on balance something that would help the country as a whole.

This suggests that one of the most valuable competitive advantages we have is our ability to allow immigration by people who we think are going to add to our national prosperity — whether wealthy investors, skilled knowledge workers, or industrious laborers. We’ve done it before, and it seems likely we can keep doing it for quite a while into the future, especially since political, economic, and military instability continue to be serious threats in much of the world.

Such immigration will indeed likely cause some problems for some, whether because some places get more crowded, because some occupations get more competitive, or for various other reasons. But my sense is that substantially increased immigration (albeit increased in a somewhat targeted fashion) will improve the welfare of the nation as a whole. And I’d go further and say that it is likely necessary, and not just desirable, if we want to maintain (to the extent possible) our edge over others.

One of the unfortunate things about recent illegal immigration debates, it seems to me, has been that they have distracted from the much more important debate about how we can increase — perhaps dramatically increase — legal immigration in a way to maximize net benefit for the nation. To some extent, it is inevitable that we will constantly have competitors who are close to our level of prosperity, at least so long as other countries can avoid bombing each other into rubble (which is one of the things that contributed to our huge advantage shortly after World War II) or choosing ridiculously ineffective economic policies (which helped to contribute to our huge advantage during the Cold War). But to the extent that we want to stay ahead, or even keep up, for as long as possible, it seems to me that we have to use the strongest advantage we have: being a great place for productive people to live.

This isn’t even near my core area of expertise, so perhaps I’m mistaken on this; and it’s also rather obvious in certain ways — others have said it before. But at the same time, however obvious it may be, it seems to me that political leaders are not focusing much on it. I think it’s about time they did.

We thought this piece was quite interesting and followed up with a letter to Professor Volokh in which we raised some issues:

I enjoyed your thoughtful piece on immigration. Having done a fair amount of work in this area due to the need of the produce industry for immigrant labor, I think your piece brings to the fore a number of issues.

1) What if the immigration policy that will help increase the “position of world leadership” of the US is not the same as the immigration policy that will help U.S. citizens maintain and improve their standard of living? This is quite possible. Unskilled Americans would benefit from restrictive immigration that will keep the supply of unskilled labor down and thus increase its price. Possibly this would result in higher per capita incomes in the U.S., but this policy would almost surely result in a smaller population, smaller economy and a diminution of American influence and leadership in the world.

2) There may well be a great conflict between the immigration policies that benefit the standard of living of different groups of Americans. Less affluent Americans benefit personally from policies that restrict less skilled immigrants as this tends to raise wages for manual labor. More affluent Americans personally benefit if they can get their gardeners, maids, pool cleaners, etc., at lower wages to benefit from broader immigration of less skilled workers.

3) Your argument that America has a huge advantage over other countries because of our history of “political stability, economic freedom, military security, and relative freedom from corruption” and that these are cultural traits that other nations can’t copy easily as “ it takes a long time to establish relatively certain protections along these lines” is itself an argument for limiting immigration. I don’t know the tipping point here, but these attributes reside in the people, not the bedrock, so allowing massive immigration from people who don’t share these characteristics would surely undermine them.

4) The focus on density “problems” is probably misplaced. Charming places to live such as the Netherlands have a population density more than ten times that of the U.S. Density is not even obviously a negative as it allows for the existence of specialized entities from cultural institutions to ethnic restaurants.

5) The idea of allowing immigration “by people who we think are going to add to our national prosperity” raises the question of whether we have any ability to actually know such a thing.Sure, we know who has already succeeded, but would such an evaluative scheme have let in the eastern European Jewish immigration or the Italian or Irish immigrations of the turn of the 20th century? Yet surely these have added greatly to American strength and prosperity. Who is to say that the energy and youth and ambition of the young unskilled laborer won’t, in the future, prove more valuable to our country than someone selected for his wealth or education?

6) There may be an issue as those who will contribute to economic prosperity are not necessarily the ones most likely to be committed Americans. Will those who buy citizenship feel the same sense of gratitude other immigrants did and be willing to lay down their lives to defend this country?

7) Many who object to immigration do so not because of any particular characteristic of the immigrants but because of a sense that the US has changed and the culture no longer has the self-confidence to enforce a “melting pot” in America. So though you say “we’ve done it before” in reference to allowing large scale immigration, many believe it was a different America that did it – one willing to demand English, teach civics and citizenship, etc. This is not to mention an America that wouldn’t provide very much in the way of welfare, free medical care, etc.

8) The ease of transport and proximity of major sources of immigration pose particular challenges. If the Jews came because they were fleeing a pogrom in Odessa, or the Vietnamese because they feared the Communists in Vietnam, they were not likely to go back. Other groups, such as the Italians, did go back and forth, but travel across the Atlantic before airplanes were common was a major commitment. So the immigrants mostly saw themselves as Americans, thought it crucial that their children become Americanized. They knew that their children would make it in America or not at all. It is not clear if immigrants today necessarily feel that way.

9)  Technologies such as Skype and the Internet allow immigrants to remain in their home culture even if physically in the U.S. In earlier times, even if one yearned for one’s homeland, the fact that the newspapers one read, the people one spoke to, etc., were American led to a gradual distancing from the home culture and a melding into the American milieu. The whole question of what it means to be an immigrant has to be addressed when a wealthy person who could qualify for immigration status by making a big investment can also remain very much a part of his home culture with the use of technology and quick plane rides around the world. In addition, with the U.S. increasingly cooperative on dual nationality claims, deciding to become an American does not necessarily mean one ceases to be another nationality.

10) Whatever policy might be ideal regarding immigration, it is not clear that the political constituency that is active on immigration issues is likely to support such a policy.  Ethnic groups don’t want families divided by someone’s criteria of who might add to our national prosperity. Industry groups have particular interests. For example, produce growers need workers to plant and harvest. Doubling or tripling of legal immigration won’t address the trade’s needs as these immigrants would find other work. Other than a completely open door, the industry needs some kind of guest-worker program. Either that or we have to completely reform the welfare state, so people are compelled to take difficult work for relatively modest wages. The other alternatives are to put high tariffs on imported produce or to accept that produce will be grown in low wage countries and exported to the United States.

11) Compromise has become very difficult on immigration in large measure because of an unwillingness by both political parties to enforce the existing laws. Although the issue is portrayed as one of lawless people sneaking in over the border who are unknown and unknowable, there is a very large illegal alien population that is composed of people who entered the U.S. legally and overstayed their visas. When this happens, the response is virtually nothing. Your suggestion of selected immigration may be a good one, but those active in this area who might be inclined toward such a compromise have come to think that compromise is futile because any restrictions that might be imposed on immigration will not be enforced. If an APB was put out the instant a visa-holder failed to leave the country on an expected date, and the failure to leave was treated as a serious security breach, immigration compromise would be much easier to come by.

12) The portrayal of the issue as being primarily about a policy for the 12 million illegal immigrants who are supposedly in the U.S. right now spreads more smoke than light. Since all children born in the U.S. are American citizens, regardless of their parent’s immigration status, all 12 million will either leave the country or die here leaving American children as their descendants. Very possibly we will want to do something about the status of the existing illegal immigrants, but if the borders were secure, this issue would lessen in scope with each passing day and would ultimately be fully resolved without any change in the law.

There is little question that if the issue was simply what policy would increase American GDP and power and influence in the world, a more generous immigration policy would be sure to help. For all the reasons above, though, almost nobody is focused on that concern and, for better or worse, that is not likely to change.

Professor Volokh responded with some thoughts of his own:

Very interesting points, thanks very much!

You’ve likely thought about the subject more deeply than I have, but here are my quick thoughts:

 (1)  I think that on balance America will be richer if it is a world leader than if it isn’t, simply because world leadership means more power to protect our interests.  If China becomes the dominant world power, then we’re likely to suffer quite a bit from this, even if we maintain the pure military force needed to prevent the worst abuses.  If Europe becomes dominant over us, I think we’re also likely to be worse off than if we maintain our leadership and thus our ability to protect ourselves.

(2)  I agree that each immigration policy will have different effects on different parts of the population, though a rising tide will on balance raise most boats.  But the trouble is that we aren’t even seriously debating this as to legal immigration, and considering proposals that are likely to benefit the great bulk of Americans (such as opening up more immigration by businesspeople, skilled workers, and the like).

(3)  It’s true that some kinds of immigration might indeed weaken American political and economic stability.  But again, there are others that are nearly certain not to weaken it, and past history suggests that even large waves of immigration have indeed not weakened it.  So this might well be an argument against unlimited open borders, or against certain kinds of immigration schemes, but it seems to me there are lots of options that we aren’t seriously considering that wouldn’t pose any problems on this score.

 (4)  I agree that density isn’t a huge problem as such, especially in a country the size of the U.S.  The reason I mentioned it is that sharp changes in density, especially in the large cities that do disproportionately draw immigrants, may overtax infrastructure in a way that causes substantial temporary problems (especially traffic problems).

 (5)  It is indeed hard to tell for sure which groups will most benefit us, and that might be reason to allow quite broad immigration without worrying about some of the things you mention in items 2 and 3.  But it’s not a reason to maintain the current restrictive scheme with regard to skilled workers, businesspeople, and others who are very likely to benefit the country and very unlikely to harm it.

Obviously this only touches on a small part of your very interesting analysis, but I thought I’d pass it along. 

We think that Professor Volokh touches on a key point: That the battles between different segments of American society that struggle for advantage in the reform of our immigration laws or in enforcement of existing laws may be beside the point.

In the end, all segments of society would be likely to benefit from a more powerful America, because a more powerful America is more likely to, as professor Voloch says, have “more power to protect our interests” or, phrased more softly, a more powerful America can keep the peace in the world, keep trade open and thus create an environment in which America and all those who are engaged in the “pursuit of happiness” can prosper.

The challenge though is this: America is a democracy, and so each immigrant becomes a voting partner in the future of our country. We cannot be indifferent to the character of these people because they will have a vote at the table. Demographics in Europe has led some, such as Mark Steyn in his book America Alone: The End of the World As We Know It, to predict the end of traditional European cultures. If things shift in America and the values of the country are not those we believe in, well, who cares if the country is more powerful in the future.

We do think America needs more immigration. Youthful immigrants bring energy and innovation to a society. Yet even while acknowledging that today’s hodge-podge of immigration criteria and limitations makes little sense, we confess a skepticism that in 100 years, the body politic will be better off if, today, we select immigrants based on wealth or education.  Beyond utility, we fear that this mode of thinking seems to reject a heritage that once proclaimed:

"Keep, ancient lands, your storied pomp!" cries she
With silent lips. "Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me,

In this sense the produce industry has an opportunity to align itself with traditional American values, to proclaim itself in favor an immigration policy that rejects favoritism to those with traditional American values, to proclaim itself in favor of an immigration policy that rejects favoritism to those with credentials and money — storied pomp — and instead encourages those with ambition — yearning to breathe free — to come to America.

If we were designing an immigration policy it would emphasize most those who love this country and want to become Americans. We would ban things such as dual citizenship and set up schedules for gaining English fluency and for gaining citizenship. But we would cast our net wide joining with Eugene Volokh in believing that American power and influence in the world is important — for us, and others — and that this influence is most likely to be sustained with a growing, vibrant and youthful population and this means with immigrants.

And we would remind all who would listen that America can provide vast opportunity: that the farm laborer who rejected his lot in some foreign land and chose to come, work, live and make his home in America is exhibiting a kind of courage. We would remind those who see only poverty that the grandchild of that laborer may just cure cancer, build a great commercial enterprise, write an important book or be exactly the President we need a few generations from now.

The challenge is more to Americans than to immigrants. If we can allow immigration and allow people to improve their lot gradually, immigrants will, as they always have, be a great asset to our country. If we insist on turning these hardworking people into welfare subjects because we are aesthetically offended at having poor people in our midst though their impoverishment in a distant land doesn’t bother us, then with greater legal immigration we will bankrupt the country and break the initiative of the immigrants. 

Many thanks to Professor Volokh for helping us think through such an important question.

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