Thread: Proposed immigration laws could heavily impact U.S. labor fo

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Proposed immigration laws could heavily impact U.S. labor force

(Published Sunday, September 3, 2006)


By Stacy Vogel
Gazette Staff

Imagine 7.2 million laborers disappearing from the American workforce.

What would happen to prices, wages, the unemployment rate?

The question could become more than academic if Congress passes stricter laws meant to stop illegal immigration and punish employers who hire undocumented workers, such as a bill passed in the House of Representatives this spring sponsored by Wisconsin Republican James Sensenbrenner.

Closer to home, locals already have begun to see the effects of heightened attention to illegal immigration. On Aug. 8, federal and local authorities arrested 25 undocumented workers at Star Packaging in Whitewater, along with the company's owner, Allen Petrie, who is accused of knowingly hiring illegal immigrants.

The Star Packaging raid is an example of the government's increased focus on "worksite enforcement," said Gail Montenegro, Immigration and Customs Enforcement spokeswoman.

"ICE is definitely focusing its efforts on the workplace," she said. "Instead of going after the employers with an administrative fine, which is what was previously done, we're now trying to bring criminal charges against these employers."

The focus is meant to deter employers from hiring illegal immigrants, promote national security, protect infrastructure and ensure fair labor standards, according to the agency's Web site.

The possible effects of such a policy raise more questions than answers among local experts.

First, no one has a clear idea of how many workers the policy would affect.

"There is no state agency that actually tracks illegal immigrants," said Rose Lynch with the state Department of Workforce Development. "The whole issue is that they're undocumented workers, so that makes it very difficult to count them."

The Pew Hispanic Center, a nonprofit, nonpartisan research organization, estimated that 11.5 million to 12 million illegal immigrants lived in the country in March 2006. It said about 7.2 million of them were employed as of the previous spring, which makes them nearly 5 percent of the civilian labor force.

A March 2005 estimate from the Pew Center put Wisconsin's illegal immigrant population at 75,000 to 115,000 out of a population of about 5.5 million.

It's possible that a decrease in that population would cause unemployment to drop, said Scott Drewianka, an economics professor at UW-Milwaukee. After all, Wisconsin had 152,000 people looking for work in July, according to the Bureau of Labor Statistics.

But that's a point of contention among economists, Drewianka added.

Several experts said a reduction in illegal workers would result in a labor shortage because the workers take jobs Americans don't want.

"Typically, these illegal immigrants are doing the kinds of jobs that citizens aren't willing to do, and they're willing to do it at a wage that might be lower than we're willing to pay an American citizen to do it," said Mark Skidmore, an economics professor at UW-Whitewater.

A decrease in illegal workers might contribute to an already-shrinking labor supply, especially in Walworth County, said Fred Burkhardt, executive director of the Walworth County Economic Development Alliance.

According to the Pew study, undocumented workers make up 24 percent of the farming industry, 17 percent of the cleaning industry, 14 percent of the construction industry and 12 percent of food preparers-all jobs that are in high demand in the agriculture- and tourism-intensive economy of Walworth County.

"For every two workers who are retiring, only one is coming in to replace them," Burkhardt said. "Documented or undocumented, the question is, where are we going to be getting the workers to maintain the industry and the workforce base that we have?"

Steven Camarota, director of research at the Center for Immigration Studies in Washington, D.C., disagrees. He said declining wages for low-skilled laborers and increasing numbers of these workers leaving the labor force point to a surplus of low-skilled workers among legal residents.

"I don't find any evidence right now of any kind of labor shortage among low-skilled workers in the U.S.," he said.

But even if there are plenty of American workers to fill the gap, a drop in illegal immigrants would push wages up for unskilled jobs, several experts said. That could be a good or bad thing depending on which side of the labor-management equation you're on.

The efforts of Immigration and Customs Enforcement would "prohibit employers from taking advantage of illegal workers," its Web site said.

"Unscrupulous employers are likely to pay illegal workers substandard wages or force them to endure intolerable working conditions," it said.

Industries that hire a lot of illegal workers probably would pass the cost of higher wages on to the consumer, Drewianka said. Illegal immigrants often work in industries with low profit margins, such as agriculture, so companies would have to raise their prices just to break even.

Or the industries might not replace the workers at all, he added.

"If you didn't have that large pool of low-wage workers, would those jobs continue to exist?" he asked.

For example, if workers disappeared or wages went up, farm owners might replace the positions with machines, he said.

"The other possibility is we might just produce less food here," he said. "I know that lots of farms don't really have a giant profit. If they were forced to pay workers a lot more, it may be more profitable to import food rather than raise it."

Those who have not yet entered the workforce must be considered as well, said Evelyn Woodring with the Hispanic Outreach Program in Janesville.

If illegal workers were sent back to their native countries, many of them would take children born in this country back with them. Those children, U.S. citizens, could return to the country when they grow up, but they probably wouldn't have the education necessary to get high-paying jobs, she said.

"Would they end up in the system again sometime in the future without the right education?" she asked. "Those are issues that have to be addressed."

"For every two workers who are retiring, only one is coming in to replace them," Burkhardt said. "Documented or undocumented, the question is, where are we going to be getting the workers to maintain the industry and the workforce base that we have?"

These greedy businesses make it sound like there is a complete shortage of workers in the US. They make it sound as if they can't have their cheap labor, then there is no labor at all.

Imagine 7.2 million laborers disappearing from the American workforce.

What would happen to prices, wages, the unemployment rate?

I'm not real sure, but I'd sure like to find out!