> Equally striking is what did not happen. Employment of low-skill American workers at losing firms did not increase. Across all firms the effect of foreign hiring on US employment was zero or positive, and in a prespecified subsample of rural firms it was significantly positive, with an elasticity of 0.61, meaning that for every one percent increase in H-2B workers there was just over half a percent increase in US workers.
> "If you don't allow firms to hire immigrant workers, they just become smaller firms," Lewis said. "They are not replaced with US workers. Instead, the output of the firm shrinks, and there are fewer total workers."
This is incredibly important. Everyone who fears immigration is going to take their job should read this and realize that fear is not only false but inverted.
> Everyone who fears immigration is going to take their job should read this and realize that fear is not only false
This is only because immigrants are willing to do jobs at wages and working conditions that locals do not accept. Employers in the Finnish berry industry were just jailed for human trafficking. Meanwhile the same companies have been loudly complaining that no Finn wants to work for them.
That's the question the article was trying to answer.
>>> "If you don't allow firms to hire immigrant workers, they just become smaller firms," Lewis said. "They are not replaced with US workers. Instead, the output of the firm shrinks, and there are fewer total workers."
So, no, if they had no choice they just shrink their operations, it seems. The apparent conclusion is that immigration bans will just force those companies to reduce operations or shut down, instead of paying higher wages to locals.
Japan and now China, have used automation rather than the importation of foreign workforces. China, according to many accounts, is doing quite well compared to other world economies, Japan is not too shabby either and moreover are not suffering from increased effects of importing foreign labor --China is noticing which path is more harmonious for its people.
Finnish wild berry industry does not really make sense. Imported cultivated berries set an effective price ceiling, which isn't high enough to hire Finnish workers. The ones you could hire are not productive enough, and the ones who could get the job done have better options.
There are similar issues in agriculture, hospitality, and construction. Many jobs are seasonal and require you to live away from home. And because the outputs are supposed to be affordable, they don't pay enough to support you for the rest of the year. So you need an actual job, which is probably nicer and pays enough that you don't want the seasonal job anymore.
> unless somebody will keep pumping in tons of money to subsidize this
I think this is where the distinction between "imported" and "locally produced" berries becomes important. My guess is there are interests pumping money to keep local production going.
Japanese rice cultivation does not really make economic sense, yet they do it and create barriers effectively making foreign rice more expensive that it would be thus making locally produced rice "competitive". If the Japanese can do it, well, so can anyone else.
> This is only because immigrants are willing to do jobs at wages and working conditions that locals do not accept.
I would partially disagree with this assertion (immigrants are clearly very constrained in their job mobility, and their wages are correspondingly suppressed) but what TFA and other similar studies and history show, it's not like wages increase for native employees with lower immigration. Typically what happens is that there just aren't enough people to do the work, and so the work just doesn't get done, which is why businesses just don't grow.
Sometimes the economics just don't work out. Relevant berry-related example, California farmers often have had to let entire years' worth of strawberries rot in the field when they could not find enough farmhands to pick them. And they did try raising wages and perks: <a href="https://www.ucdavis.edu/food/news/california-farmers-have-raised-wages-still-unable-find-enough-workers" rel="nofollow">https://www.ucdavis.edu/food/news/california-farmers-have-ra...
But sometimes even with the right economics there just are not enough workers. TFA gels with my experience working in Tech in the US for almost 2 decades, conducting countless interviews for positions that I know paid very well, and just not finding enough qualified candidates regardless of visa status, which constantly put significant constraints on our roadmaps.
Article conveniently leaves out how much wages were raised. A 5% raise will not do shit. If you want non-immigrant workers you have to aim closer to 100-200%.
Locals are not living in a house with 8 other day-workers and 1 bathroom, hence they need completely different ranges of wages.
But this point conveniently overlooks what the farmers do in response to this lack of labor: they literally let crops rot in the fields and lose a lot of money.
It simply is not economical to pay that much higher wages given the low prices people want to pay for produce, and they waste anywhere from 30% to a full years' worth of crops. Forget "preserving margins," they typically straight up take a huge financial loss on their investments up to that point.
So really, it's not just a simplistic choice between cheap immigrant labor or expensive native labor, it is also about farmers actually having a viable business, and everyone getting affordable produce -- very often, including people who really need that food: <a href="https://calmatters.org/california-divide/2019/10/california-families-are-hungry-while-a-third-of-crops-rot-in-fields/" rel="nofollow">https://calmatters.org/california-divide/2019/10/california-...
I don't know what the actual economics are, but it's very conceivable that, after considering all the people involved, it is better for cheap immigrant workers to undercut expensive native workers as long as the majority of people get more affordable food and farmers can keep their businesses going.
JoshTriplett · · focus · HN ↗
> "If you don't allow firms to hire immigrant workers, they just become smaller firms," Lewis said. "They are not replaced with US workers. Instead, the output of the firm shrinks, and there are fewer total workers."
This is incredibly important. Everyone who fears immigration is going to take their job should read this and realize that fear is not only false but inverted.
anilakar · · focus · HN ↗
This is only because immigrants are willing to do jobs at wages and working conditions that locals do not accept. Employers in the Finnish berry industry were just jailed for human trafficking. Meanwhile the same companies have been loudly complaining that no Finn wants to work for them.
matheusmoreira · · focus · HN ↗
Unionization demonstrably leverages benefits out of corporations, so I'm inclined to think that immigration bans would have the same effect.
hnfong · · focus · HN ↗
>>> "If you don't allow firms to hire immigrant workers, they just become smaller firms," Lewis said. "They are not replaced with US workers. Instead, the output of the firm shrinks, and there are fewer total workers."
So, no, if they had no choice they just shrink their operations, it seems. The apparent conclusion is that immigration bans will just force those companies to reduce operations or shut down, instead of paying higher wages to locals.
matheusmoreira · · focus · HN ↗
The outcome could have been different had all of them lost access due to a foreign labor ban.
mejutoco · · focus · HN ↗
mc32 · · focus · HN ↗
jltsiren · · focus · HN ↗
There are similar issues in agriculture, hospitality, and construction. Many jobs are seasonal and require you to live away from home. And because the outputs are supposed to be affordable, they don't pay enough to support you for the rest of the year. So you need an actual job, which is probably nicer and pays enough that you don't want the seasonal job anymore.
kakacik · · focus · HN ↗
Well market forces will quickly align these back to reality, unless somebody will keep pumping in tons of money to subsidize this.
mitxela · · focus · HN ↗
TeMPOraL · · focus · HN ↗
I think this is where the distinction between "imported" and "locally produced" berries becomes important. My guess is there are interests pumping money to keep local production going.
mc32 · · focus · HN ↗
keeda · · focus · HN ↗
I would partially disagree with this assertion (immigrants are clearly very constrained in their job mobility, and their wages are correspondingly suppressed) but what TFA and other similar studies and history show, it's not like wages increase for native employees with lower immigration. Typically what happens is that there just aren't enough people to do the work, and so the work just doesn't get done, which is why businesses just don't grow.
Sometimes the economics just don't work out. Relevant berry-related example, California farmers often have had to let entire years' worth of strawberries rot in the field when they could not find enough farmhands to pick them. And they did try raising wages and perks: <a href="https://www.ucdavis.edu/food/news/california-farmers-have-raised-wages-still-unable-find-enough-workers" rel="nofollow">https://www.ucdavis.edu/food/news/california-farmers-have-ra...
But sometimes even with the right economics there just are not enough workers. TFA gels with my experience working in Tech in the US for almost 2 decades, conducting countless interviews for positions that I know paid very well, and just not finding enough qualified candidates regardless of visa status, which constantly put significant constraints on our roadmaps.
augment_me · · focus · HN ↗
Locals are not living in a house with 8 other day-workers and 1 bathroom, hence they need completely different ranges of wages.
keeda · · focus · HN ↗
It simply is not economical to pay that much higher wages given the low prices people want to pay for produce, and they waste anywhere from 30% to a full years' worth of crops. Forget "preserving margins," they typically straight up take a huge financial loss on their investments up to that point.
So really, it's not just a simplistic choice between cheap immigrant labor or expensive native labor, it is also about farmers actually having a viable business, and everyone getting affordable produce -- very often, including people who really need that food: <a href="https://calmatters.org/california-divide/2019/10/california-families-are-hungry-while-a-third-of-crops-rot-in-fields/" rel="nofollow">https://calmatters.org/california-divide/2019/10/california-...
I don't know what the actual economics are, but it's very conceivable that, after considering all the people involved, it is better for cheap immigrant workers to undercut expensive native workers as long as the majority of people get more affordable food and farmers can keep their businesses going.
wallst07 · · focus · HN ↗