This is the same thing that killed Detroit when the unions thought they could string arm their way to higher wages than the market would bear. It went from a city of 2 million to less than a million. The poster child of urban decay. I witnessed something very similar in Germany in the 1990s. The engineering union IG Metall (manufacturing industry really) struck and got 10% wage increases in 91 and 92 and another 6% in 93. The reward for their members was that it was cheaper for German industry to install a butt load of robots and send tons of union workers home. Moral? Higher wages = automation.
What Happened When the U.S. Got Rid of Guest Workers? Farms Used Less Labor
A study finds scant benefit for the native-born after a program for seasonal workers from Mexico was terminated
By
Jeffrey Sparshott
Feb 8, 2017 3:09 pm ET
ENLARGE
Mexican migrant workers employed under the bracero program harvest crops in California in 1964. Photo: Associated Press
There’s an economic argument to limiting immigration to the U.S.: Cut down on the supply of foreign labor and wages will improve for native-born Americans.
But new research shows the equation isn’t that simple.
A team of economists looked at the mid-century “bracero” program, which allowed nearly half a million seasonal farm workers per year into the U.S. from Mexico. The Johnson administration terminated the program in 1964, creating a large-scale experiment on labor supply and demand.
The result wasn’t good news for American workers. Instead of hiring more native-born Americans at higher wages, farmers automated, changed crops or reduced production.
“We find that bracero exclusion failed to raise wages or substantially raise employment for domestic workers in the sector,” the Center for Global Development’s Michael Clemens and Hannah Postel, and Dartmouth College’s Ethan Lewis said. Instead, “employers adjusted to foreign-worker exclusion by changing production techniques where that was possible, and changing production levels where it was not, with little change to the terms on which they demanded domestic labor.”
Indeed, wages in states with the heaviest concentration of braceros—Arizona, California, Nebraska, New Mexico, South Dakota and Texas—rose more slowly after the program ended than wages in states that had no such guest workers. Employment of local workers rose at the same pace in bracero as nonbracero states.
Help WantedThe U.S. bracero program ended in 1964.Afterward, average hourly farm wages grewmore slowly in states that had been exposedto guest workersTHE WALL STREET JOURNALSource: Michael Clemens, Ethan Lewis and Hannah PostelNote: 1965 dollars
NoexposureLowexposureHighexposure1950’55’60’65’700.600.801.00$1.20
Evidence is scant that illegal or other legal immigrants simply replaced the braceros, the researchers said. For example, U.S. Border Patrolapprehensions rose little in the years immediately following the exclusion. The number of non-Mexican foreign seasonal agricultural workers, meanwhile, hardly rose.
“It’s true that several years later, illegal migration in the mid-1970s and 1980s expanded greatly and one could say that it began to substitute for some of the legal flows during the bracero program,” Mr. Clemens said. “But that just can’t explain the lack of immediate effects on U.S. workers.”
There are signs the labor experiment has played out again in U.S. history. A Wall Street Journal article last year detailed the impact of Arizona’s tough anti-immigration laws on the state’s economy. Rob Knorr, owner RK Farms LLC, said he sharply reduced his acreage and invested $2 million developing a machine to remove stems from his jalapeño peppers following their passage. His goal was to cut the number of laborers he needed by 90%.
Mr. Clemens and his colleagues, who started their project almost two years ago, take the evidence beyond the anecdotal. The research takes a deep dive into records from the 1930s through the 1960s housed at the Dwight D. Eisenhower Presidential Library in Abilene, Kan. Once the researchers ran the numbers, Mr. Clemens said, the results were surprising.
Presidents “Kennedy and Johnson did this explicitly to improve wages and employment for American workers,” Mr. Clemens said. “Nothing like that happened.”
The findings apply to the present day and a broader set of sectors, he said, though exact outcomes are difficult to predict. “There isn’t a simple mechanistic relationship between removing workers and labor conditions,” he said.
Of course, research results remain mixed on the impact of arriving immigrants on native-born wages. Harvard University’s George Borjas, for example, estimated the immigrant influx from 1980-2000lowered wages by 3% for the average native-born U.S. worker and by 8% for native-born high school dropouts.
Mr. Clemens and his colleagues attempt to look at what happens when you take those foreign workers away.
What Happened When the U.S. Got Rid of Guest Workers? Farms Used Less Labor
A study finds scant benefit for the native-born after a program for seasonal workers from Mexico was terminated
By
Jeffrey Sparshott
Feb 8, 2017 3:09 pm ET
Mexican migrant workers employed under the bracero program harvest crops in California in 1964. Photo: Associated Press
There’s an economic argument to limiting immigration to the U.S.: Cut down on the supply of foreign labor and wages will improve for native-born Americans.
But new research shows the equation isn’t that simple.
A team of economists looked at the mid-century “bracero” program, which allowed nearly half a million seasonal farm workers per year into the U.S. from Mexico. The Johnson administration terminated the program in 1964, creating a large-scale experiment on labor supply and demand.
The result wasn’t good news for American workers. Instead of hiring more native-born Americans at higher wages, farmers automated, changed crops or reduced production.
“We find that bracero exclusion failed to raise wages or substantially raise employment for domestic workers in the sector,” the Center for Global Development’s Michael Clemens and Hannah Postel, and Dartmouth College’s Ethan Lewis said. Instead, “employers adjusted to foreign-worker exclusion by changing production techniques where that was possible, and changing production levels where it was not, with little change to the terms on which they demanded domestic labor.”
Indeed, wages in states with the heaviest concentration of braceros—Arizona, California, Nebraska, New Mexico, South Dakota and Texas—rose more slowly after the program ended than wages in states that had no such guest workers. Employment of local workers rose at the same pace in bracero as nonbracero states.
Help WantedThe U.S. bracero program ended in 1964.Afterward, average hourly farm wages grewmore slowly in states that had been exposedto guest workersTHE WALL STREET JOURNALSource: Michael Clemens, Ethan Lewis and Hannah PostelNote: 1965 dollars
NoexposureLowexposureHighexposure1950’55’60’65’700.600.801.00$1.20
Evidence is scant that illegal or other legal immigrants simply replaced the braceros, the researchers said. For example, U.S. Border Patrolapprehensions rose little in the years immediately following the exclusion. The number of non-Mexican foreign seasonal agricultural workers, meanwhile, hardly rose.
“It’s true that several years later, illegal migration in the mid-1970s and 1980s expanded greatly and one could say that it began to substitute for some of the legal flows during the bracero program,” Mr. Clemens said. “But that just can’t explain the lack of immediate effects on U.S. workers.”
There are signs the labor experiment has played out again in U.S. history. A Wall Street Journal article last year detailed the impact of Arizona’s tough anti-immigration laws on the state’s economy. Rob Knorr, owner RK Farms LLC, said he sharply reduced his acreage and invested $2 million developing a machine to remove stems from his jalapeño peppers following their passage. His goal was to cut the number of laborers he needed by 90%.
Mr. Clemens and his colleagues, who started their project almost two years ago, take the evidence beyond the anecdotal. The research takes a deep dive into records from the 1930s through the 1960s housed at the Dwight D. Eisenhower Presidential Library in Abilene, Kan. Once the researchers ran the numbers, Mr. Clemens said, the results were surprising.
Presidents “Kennedy and Johnson did this explicitly to improve wages and employment for American workers,” Mr. Clemens said. “Nothing like that happened.”
The findings apply to the present day and a broader set of sectors, he said, though exact outcomes are difficult to predict. “There isn’t a simple mechanistic relationship between removing workers and labor conditions,” he said.
Of course, research results remain mixed on the impact of arriving immigrants on native-born wages. Harvard University’s George Borjas, for example, estimated the immigrant influx from 1980-2000lowered wages by 3% for the average native-born U.S. worker and by 8% for native-born high school dropouts.
Mr. Clemens and his colleagues attempt to look at what happens when you take those foreign workers away.
