Skip to main content
Menu

Main navigation

  • About
    • Annual Reports
    • Leadership
    • Jobs
    • Student Programs
    • Media Information
    • Store
    • Contact
    LOADING...
  • Experts
    • Policy Scholars
    • Adjunct Scholars
    • Fellows
  • Events
    • Upcoming
    • Past
    • Event FAQs
    • Sphere Summit
    LOADING...
  • Publications
    • Studies
    • Commentary
    • Books
    • Reviews and Journals
    • Public Filings
    LOADING...
  • Blog
  • Donate
    • Sponsorship Benefits
    • Ways to Give
    • Planned Giving

Issues

  • Constitution and Law
    • Constitutional Law
    • Criminal Justice
    • Free Speech and Civil Liberties
  • Economics
    • Banking and Finance
    • Monetary Policy
    • Regulation
    • Tax and Budget Policy
  • Politics and Society
    • Education
    • Government and Politics
    • Health Care
    • Poverty and Social Welfare
    • Technology and Privacy
  • International
    • Defense and Foreign Policy
    • Global Freedom
    • Immigration
    • Trade Policy
Live Now

Cato at Liberty


  • Blog Home
  • RSS

Email Signup

Sign up to have blog posts delivered straight to your inbox!

Topics
  • Banking and Finance
  • Constitutional Law
  • Criminal Justice
  • Defense and Foreign Policy
  • Education
  • Free Speech and Civil Liberties
  • Global Freedom
  • Government and Politics
  • Health Care
  • Immigration
  • Monetary Policy
  • Poverty and Social Welfare
  • Regulation
  • Tax and Budget Policy
  • Technology and Privacy
  • Trade Policy
Archives
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • September 2009
  • August 2009
  • July 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • February 2009
  • January 2009
  • December 2008
  • November 2008
  • October 2008
  • September 2008
  • August 2008
  • July 2008
  • June 2008
  • May 2008
  • April 2008
  • March 2008
  • February 2008
  • January 2008
  • December 2007
  • November 2007
  • October 2007
  • September 2007
  • August 2007
  • July 2007
  • June 2007
  • May 2007
  • April 2007
  • March 2007
  • February 2007
  • January 2007
  • December 2006
  • November 2006
  • October 2006
  • September 2006
  • August 2006
  • July 2006
  • June 2006
  • May 2006
  • April 2006
  • Show More
July 19, 2017 11:58AM

Statement for Hearing on “Agricultural Guestworkers: Meeting the Growing Needs of American Agriculture”

By David J. Bier

SHARE

PDF here

Statement for the Record
of David Bier of the Cato Institute[1]
Submitted to Subcommittee on Immigration and Border Security,
House Committee on the Judiciary 
Hearing on
“Agricultural Guestworkers: Meeting the Growing Needs of American Agriculture”
July 18, 2017

Foreign agricultural workers allow farms to expand production, lower prices, and raise incomes for most workers in the United States. Government intervention in the labor market inhibits the ability of farmers to plan the planting and harvesting of crops appropriately, leading to a reduction in production at the start of the season or crops rotting at the end. This government-created uncertainty also makes it more difficult for U.S. companies that rely on U.S. agricultural products to expand. At the same time, unnecessary regulations on agricultural guest workers limit their availability, incentivizing illegal immigration.

To fix these problems and end the regulatory uncertainty, Congress should grant a lawful status to the existing unauthorized immigrant workforce—a disproportionate share of which works in agriculture—and it should reform the current H-2A temporary worker program for future agricultural workers. Excessive regulatory costs and arbitrary limitations on the occupations that H-2A workers may perform limit the use of the program. Any revised H-2A program should allow guest workers to change employers without ex ante government permission and to freely negotiate wages or other benefits without fear of losing their status.

Foreign Agricultural Workers Increase Farm Production

Labor costs account for 17 percent of the variable costs for production on U.S. farms.[1] For fruits, vegetables, and nursery products, the price of labor can account for almost half of all variable costs.[2] All else equal, increases or decreases in the supply of labor result in increases or decreases in production. Higher production has many salutary consequences for the United States, including increased returns on investment, lower food prices, and increased employment.[3]

In 2013, a team of economists employed by the U.S. Department of Agriculture (USDA) estimated that a guest worker program that boosted the number of total temporary workers by 156,000 over 15 years would raise production by up to 2 percent annually in certain labor-intensive subsectors.[4] By contrast, a removal of 5.8 million unauthorized immigrants would decrease agricultural output in certain subsectors by up to 5.4 percent. A similar study found that a 50 percent reduction in foreign workers in the dairy industry would reduce output by 7.9 percent.[5]

Farmers reduce planted acreage when they cannot hire as many workers as they would like to. As the immigration attorney for one farm put it in March 2017, “You’re either reducing your acreage or you’re going for H-2A.”[6] Farmers who miscalculate end up having crops rot in the field. One study found that California fruit and vegetable farmers had to plow under $13 million worth of produce in 2016, a threefold increase since 2011, due to unexpected labor scarcity.[7]

Machines Cannot Fully Replace Human Laborers

Over the last several decades, the price of machinery has fallen relative to the wages of farm laborers.[8] This has led many farms to hire fewer workers and shift to machines. Although opponents of opening the international labor market sometimes argue that the shift to machines proves that foreign labor is unnecessary, this is incorrect for several reasons.

Many industries simply cannot mechanize production at this time. Many fruits and vegetables need to be harvested by hand. The USDA has concluded that some of these sectors, such as apples, oranges, and asparagus, that compete internationally would lose market share if labor costs rise.[9] Even in sectors that can adopt machinery, however, USDA concluded that “hand-harvested produce is usually of better quality, since it is hard to replicate the skill and care of hand harvesters.”[10] This means that a scarcity-inducing labor market policy also harms consumers by diminishing quality. 

Even if increased labor scarcity induced farmers to replace labor with machines, this would defeat the stated purpose of the tighter labor policy: better wages for U.S.-born farm workers. A major justification for the 1965 termination of the Bracero guest worker program for Mexican farm workers was that it would raise wages for American farmworkers. An excellent recent study, however, found that farm wages in Bracero-heavy areas actually did not rise relative to those in other areas after its cancellation.[11] The authors concluded that farmers responded to the increased labor scarcity with mechanization, not with higher wages. 

Foreign Farmworkers Don’t Harm Americans

Guest workers rarely displace domestic farmworkers. Another recent study that analyzed data from the North Carolina Growers’ Association (NCGA) proves this point. NCGA advertised 6,500 farm jobs and accepted 90 percent of all applications from U.S. residents, which amounted to just 245 U.S. residents accepting a job in the field out of a total of 500,000 unemployed North Carolinians.[12] Of these, only seven actually finished the growing season. This is compared to 90 percent of the more than 6,000 H-2A workers who finished.[13] This coincides with a study of California vegetable producers that found at most one U.S. resident is displaced from a farm job for every 81 foreign farm workers.[14]

Even though foreign farm workers may displace a tiny percentage of U.S. workers from farms, this does not necessarily do permanent long-run economic damage. Immigrant farm workers enable U.S. workers to move into related industries where higher pay is available. As foreign farm workers have entered, U.S. workers have moved to other industries, which explains their lack of interest in agricultural jobs. Indeed, U.S. workers make up the vast majority of workers in occupations that depend on manual agricultural labor, such agricultural managers and supervisors, agricultural inspectors, purchasing agents for farm products, and others.[15]

For this reason, increases in the availability of farm labor ultimately benefit U.S. workers elsewhere in the economy. USDA used a general equilibrium model to estimate the effect of removing 5.6 million unauthorized immigrant workers and concluded that about 1 percent of income accruing to natives is dependent on those workers, a disproportionate share of whom work in agriculture.[16]

The Supply and Demand for Farmworkers

Employment figures indicate that agricultural workers are currently in high demand. Farm unemployment is usually higher than the national average because the work is often seasonal or temporary, but unemployment in agriculture over the last 12 months is as low as it has been during any period in a decade.[17] August 2016 saw the lowest unemployment rate for that month since before the year 2000, as did February and March 2017. Average unemployment for the last 12 months was the lowest of any 12-month period since 2007.[18]

Few economic sectors in the United States rely more heavily on foreign workers than agriculture, meaning that immigrants are responsible for a large portion of its production. The USDA has found that more than 70 percent of hired crop farmworkers migrated to the United States from other countries.[19] It also found that half of the total lacked proper authorization to live or work in the United States.[20] In addition, another 135,000 foreign workers received H-2A visas in 2016 to come and work as temporary farm workers in the United States.[21] The use of this program has increased substantially over the last two decades, doubling in the last five years alone (Figure 1).[22]

Figure 1
H-2A Agricultural Visas Issued, FY 1997-FY 2016

Source: U.S. Department of State

This increase in the supply of guest workers is beneficial, not only due to the positive economic factors described above, but also due to the positive impact on border security. Over the last 60 years, guest worker entries correlate negatively with apprehensions of illegal aliens at the border. Logically this relationship makes sense. Government has artificially restricted the supply of a service below the level of market demand. The excess demand seeks an outlet in the underground economy. The United States experienced a similar process during alcohol prohibition with bootleggers replacing the legitimate liquor market. When Congress first enacted immigration quotas in the 1920s, many commenters at the time noted the relationship between these two progressive policies, calling illegal immigration “human bootlegging.”[23]

Figure 2 highlights this relationship for the post-World War II period. The red line is the number of guest workers entering each year. The blue bars represent the number of apprehensions that each border agent made during the year, which is the best measure of total illegal immigration available. Typically, more apprehensions per agent mean more attempted crossings. As it shows, when illegal immigration first started in the late 1940s, Congress responded to the market, increased the supply of visas, and continued to do so until the supply met demand. Combined with a stricter enforcement policy in the 1950s, the problem nearly evaporated, but it returned with a vengeance after Congress eliminated the Bracero program in 1965.[24]

Figure 2
Guest Worker Entries and Apprehensions of Illegal Aliens per Border Patrol Agent 1946-2015

Sources: Border Patrol; Immigration and Naturalization Service

In recent years, the number of guest workers entering each year has risen sharply, which again has coincided with a drop in illegal immigration, but the H-2A program still needs reforms. From 2007 to 2011, H-2As represented just 10 percent of farm employment.[25] Although it has doubled in size since then, it is still a small share of the total. The biggest problem is that H-2A workers may not work in any permanent or non-seasonal jobs. This eliminates roughly half of all farm jobs, including in the dairy and livestock industries. H-2A visas are also unavailable for meat and poultry processing. The H-2A program is unworkable for certain seasonal industries that cannot guarantee a certain length of employment as the program requires. USDA also notes that the inflated wage requirements may discourage some employers from using it.[26]

An expanded agriculture guest worker program would benefit the U.S. economy and improve border security. Foreign farm workers are in demand and Congress should allow the free market, rather than the black market, to meet that demand.

div 




[1] The Cato Institute is a libertarian 501(c)(3) nonprofit think tank founded in 1977 and located in Washington D.C.

     



[1] Patrick O'Brien; John Kruse; and Darlene Kruse, "Gauging the Farm Sector’s Sensitivity to Immigration Reform via Changes in Labor Costs and Availability," WAEES, February 2014, http://www.fb.org/files/AFBF_LaborStudy_Feb2014.pdf.


[2] Steven Zahniser, Tom Hertz, Peter Dixon, and Maureen Rimmer, "The Potential Impact of Changes in Immigration Policy on U.S. Agriculture and the Market for Hired Farm Labor: A Simulation Analysis," U.S. Department of Agriculture, Economic Research Service, Economic Research Report Number 135, May 2012. http://www.ers.usda.gov/media/619408/err135_1_.pdf.


[3] See: Zahniser, et al.


[4] Ibid.


[5] Rosson, Parr, Flynn Adcock, Dwi Susanto, and David Anderson, “The Economic Impacts of Immigration on U.S. Dairy Farms,” National Milk Producers Federation: Arlington, VA, June 2009, http://www.nmpf.org/ fi les/fi le/NMPF%20Immigration%20Survey%20Web.pdf.


[6] Geoffrey Mohan, "To keep crops from rotting in the field, farmers say they need Trump to let in more temporary workers," Los Angeles Times, May 25, 2017, http://www.latimes.com/projects/la-fi-farm-labor-guestworkers/.


[7] Kelsey Brugger, "Labor Shortage Leaves $13 Million in Crops to Rot in Fields," Independent, June 22, 2017, http://www.independent.com/news/2017/jun/22/labor-shortage-leaves-13-mi…;


[8] Sun Ling Wang, Paul Heisey, David Schimmelpfennig, and Eldon Ball, "Agricultural Productivity Growth in the United States: Measurement, Trends, and Drivers," United States Department of Agriculture Economic Research Service: Economic Research Report 189, July 2015, https://www.ers.usda.gov/webdocs/publications/45387/53417_err189.pdf?v=…;


[9] Linda Calvin and Philip Martin, "The U.S. Produce Industry and Labor: Facing the Future in a Global Economy," United States Department of Agriculture Economic Research Service: Economic Research Report 106, November 2010, https://www.ers.usda.gov/webdocs/publications/44764/8068_err106_reports…;


[10] Ibid.


[11] Michael A. Clemens, Ethan G. Lewis, and Hannah M. Postel, "Immigration Restrictions as Active Labor Market Policy: Evidence from the Mexican Bracero Exclusion," NBER Working Paper No. 23125, February 2017, http://www.nber.org/papers/w23125.


[12] Michael Clemens, "International Harvest: A Case Study of How Foreign Workers Help American Farms Grow Crops – and the Economy," Partnership for a New American Economy and the Center for Global Development, May 2013, http://www.newamericaneconomy.org/sites/all/themes/pnae/nc-agr-report-0…;


[13] Ibid.


[14] Devadoss, Stephen, and Jeff Luckstead. “Contributions of Immigrant Farmworkers to California Vegetable Production,” Journal of Agricultural and Applied Economics 40(3): pp. 879-94, 2008, http://ageconsearch.umn.edu/bitstream/47265/2/jaae-40-03-879.pdf.


[15] American Community Survey, 2011-2015


[16] Zahniser, et al.


[17] Bureau of Labor Statistics, “Unemployment Rate - Agricultural and Related Private Wage and Salary Workers,” https://data.bls.gov/pdq/SurveyOutputServlet


[18] Bureau of Labor Statistics, “Unemployment Rate - Agricultural and Related Private Wage and Salary Workers,” https://data.bls.gov/pdq/SurveyOutputServlet


[19] U.S. Department of Agriculture, "Farm Labor - Background," Tuesday, September 27, 2016, https://www.ers.usda.gov/topics/farm-economy/farm-labor/background.aspx…;


[20] Ibid. See also: Jeffrey Passel and D'Vera Cohn, "Size of U.S. Unauthorized Immigrant Workforce Stable After the Great Recession," Pew Research Center, November 3, 2016, http://www.pewhispanic.org/2016/11/03/industries-of-unauthorized-immigr…;


[21] U.S. Department of State, "Worldwide NIV Workload by Visa Category FY 2016," https://travel.state.gov/content/dam/visas/Statistics/Non-Immigrant-Sta…;


[22] U.S. Department of State, "Nonimmigrant Visa Statistics - Nonimmigrant Visa Issuances by Visa Class and by Nationality," https://travel.state.gov/content/visas/en/law-and-policy/statistics/non…;


[23] David Bier, "Tougher Restrictions on Immigrants Won't Work," Newsweek, November 16, 2016, http://www.newsweek.com/tougher-restrictions-immigrants-wont-work-52154…;


[24] Alex Nowrasteh, "Guest Worker Visas Can Halt Illegal Immigration," Cato Institute, May 5, 2014, https://www.cato.org/blog/guest-worker-visas-can-halt-illegal-immigrati…;


[25] Zahniser, et al.


[26] Zahniser, et al.

Stay Connected to Cato

Sign up for the newsletter to receive periodic updates on Cato research, events, and publications.

View All Newsletters

1000 Massachusetts Ave. NW
Washington, DC 20001-5403
202-842-0200
Contact Us
Privacy

Footer 1

  • About
    • Annual Reports
    • Leadership
    • Jobs
    • Student Programs
    • Media Information
    • Store
    • Contact
  • Podcasts

Footer 2

  • Experts
    • Policy Scholars
    • Adjunct Scholars
    • Fellows
  • Events
    • Upcoming
    • Past
    • Event FAQs
    • Sphere Summit

Footer 3

  • Publications
    • Books
    • Cato Journal
    • Regulation
    • Cato Policy Report
    • Cato Supreme Court Review
    • Cato’s Letter
    • Human Freedom Index
    • Economic Freedom of the World
    • Cato Handbook for Policymakers

Footer 4

  • Blog
  • Donate
    • Sponsorship Benefits
    • Ways to Give
    • Planned Giving
Also from Cato Institute:
Libertarianism.org
|
Humanprogress.org
|
Downsizinggovernment.org