The Bitter Harvest of Immigration Restrictions

Time has an interesting article describing how state laws intended to crack down on illegal immigrants have led to a crisis in agriculture. Unable to use immigrant labor to harvest it, many farmers have had to let much of their crop go to waste:

Ralph and Cheryl Broetje rely on roughly 1,000 seasonal workers every year to grow and pack over 6 million boxes of apples on their farm along the Snake River in eastern Washington. It’s a custom they’ve maintained for over two decades. Recently, though, their efforts to recruit skilled labor, mostly undocumented immigrants, have come woefully short, despite intensive recruitment efforts in an area with high rates of unemployment.

The Broetjes, and an increasing number of farmers across the country, say that a complex web of local and state anti-immigration laws account for acute labor shortages. With the harvest season in full bloom, stringent immigration laws have forced waves of undocumented immigrants to flee certain states for more hospitable areas. In their wake, thousands of acres of crops have been left to rot in the fields, as farmers have struggled to compensate for labor shortages with domestic help.

“The enforcement of immigration policy has devastated the skilled labor source that we’ve depended on for 20 or 30 years,” said Ralph Broetje during a recent teleconference organized by the National Immigration Forum, adding that last year Washington farmers—part of an $8 billion agricultural industry—were forced to leave 10% of their crops rotting on vines and trees. “It’s getting worse each year,” says Broetje, “and it’s going to end up putting some growers out of business if Congress doesn’t step up and do immigration reform.”

Roughly 70% of the 1.2 million people employed by the agricultural industry are undocumented. No American industry is more dependent on undocumented immigrants. But acute labor shortages brought on by anti-immigration measures threaten to heap record losses on an industry reemerging from years of stiff foreign competition. Nationwide, labor shortages will result in losses of up to $9 billion, according to the Farm Bureau Federation.

The article focuses mostly on the negative impact of immigration restrictions on farmers. But it’s also important to recognize the negative effects on consumers. If much of this year’s crop is left unharvested, the price of food will go up, thereby harming consumers as well as farmers. The poor are likely to suffer more than others, especially in a bad economy when many already find it difficult to make ends meet.

The Time article notes that some states are seeking to enact guest-worker programs to prevent laborers from fleeing to more hospitable jurisdictions. In this way, interjurisdictional competition between states can mitigate the effects of anti-immigrant sentiment. For the moment, however, farmers and consumers have joined immigrants themselves on the list of victims of the states’ immigration crackdown.

UPDATE: Ted Frank responds to this post here:

“[A]s any economist can tell you, there’s no such thing as a ‘shortage,’ only an unwillingness of purchasers to pay a market price that may have previously been artificially depressed.” Ilya Somin is more economically savvy than most law professors, but buys into the idea of a shortage of farm-workers, because there are “crops rotting in the fields.” But as Steve Sailer notes, a profit-maximizing farmer will always have “crops rotting in the fields”; there’s always going to be last dregs of produce that are economically infeasible to harvest.

Actually, most economists recognize that shortages can and do arise when government intervention prevents supply from meeting demand. In this case, the government is preventing illegal immigrants from supplying their labor at market-clearing prices, thereby causing shortages. The effects are similar to those of price controls that led to oil shortages in the late 1970s. Just as price controls artificially repress the supply of goods, thereby causing shortages of the products in question, immigration restrictions artificially suppress the supply of labor, thereby creating labor shortages.

It is true that some crops are likely to be left to rot regardless. But as the article I quoted above notes, this year it is far more than normal, and the immigration crackdown is one of the causes. Ted also notes that the price of labor has been going down in recent years, as one would expect during a recession. But that is still compatible with labor shortages if the supply of labor is artificially repressed. Absent the immigration crackdown, the supply would be higher and the price lower than otherwise.