Georgia’s Crops, Illegal Immigrants, and Unemployment Benefits

In April 2010, Arizona established a controversial illegal immigration law, and I heard anecdotes about Hispanics leaving the state. I thought this would be a good test of conservative and liberal ideologies. If conservatives are right and illegal immigrants are a net drain on resources, then the state’s economy should boom; if liberals are right and illegal immigrants contribute to an economy by doing jobs Americans don’t want and by paying more taxes then conservatives think, then the state’s economy should suffer.

Arizona’s unemployment rate in April 2010 was 9.5% and the 19th worst of the 50 states. As of May 2011 it’s tied for 17th worst at 9.1%. It’s one data point with lots of factors, but there’s no obvious “success” or “failure” thus far.

Well now we have something much more interesting.

Georgia has enacted their own illegal immigration law, perhaps because the state supposedly estimates that “illegal immigrants cost Georgia taxpayers more than $2 billion a year.” Suddenly, Georgia found itself missing at least 11,000 farm workers, and we started to hear about crops rotting in the fields. Then the state tried to put probationers to work, but they basically sucked at doing the work. (Turns out Hispanics work really hard, are really good at what they do, and are hard to replace.)

Of course, liberals are having a heyday. Republicans tried to be mean to poor immigrants, and now they’ve destroyed their state’s economy! Ha! (It’s actually pretty ironic that conservatives did something to disrupt a model that exploits poor workers and have progressives mocking them for the consequences… Are progressives really implying that the industry needs low-wage no-benefit employees?)

Georgia has one of the top 10 worst unemployment rates at 9.8%, so why aren’t people lining up to take those jobs? Megan McArdle offers some theories on the sheer difficulty of picking crops and training newcomers to do it, as well as why the farmers don’t have room to raise wages very much above the $8 an hour average. Even so, 11,000 is not that large of a number, and even those obstacles don’t seem satisfying to me as an explanation of why the market isn’t filling these positions. The lazy-American meme is pervasive, but I can’t believe that there isn’t anybody who wouldn’t come forward to learn and do the work if they needed the money. I mean, if illegal immigration has become such a problem in the last 20 years, who was picking our crops for most of last century – when more of us were rural, anyway? Americans have worked hard and still can.

But I have a more controversial theory on why unemployed American citizens aren’t lining up to take the openings: unemployment insurance benefits. According to Georgia’s Department of Labor, you can get up to $330 a week, which is equivalent to $8.25/hr full-time. Why would you give that up for back-breaking work in a field that makes even less? According to the government’s data, there have been over 10,000 new claims in Georgia every week this year. The continued number has stayed close to 100,000, so maybe 10,000 folks are finding work every week too. (Or are some of them just running out of benefits? Not sure – but they should have even more incentive to take the farm jobs.) Now out of that 100,000, I don’t know how many are really getting that maximum amount. I don’t know how many are too old or fat to handle intense physical labor. But I wonder if there’s at least a few thousand who could handle the work but don’t have a huge incentive right now.

Now you could still argue that the safety net of unemployment benefits is an overall good thing, but you can’t be a progressive arguing that a conservative policy is destroying the economy when you have a progressive policy that may be roadblocking the conservative policy. The question is simply a matter of much the incentives of unemployment benefits play a role in this, and I simply do not know. (All I really know is that a lot of conservatives will overestimate it and a lot of progressives will underestimate it.)

Besides, the market optimist in me wonders how much of a crisis there will end up being. The news about the law and the rotting crops all came out at once, but we’ve got a long way to go in this overall growing season, and a long time for the markets of supply and demand to clumsily lurch toward solutions, obstacles notwithstanding.

A commenter from an above article claims,  “I’m a farmer in Ga and we’re getting by. Neighbors are helping out. Schools out for we’re getting teens wanting jobs and we have the equipment out in the fields. Yes we may not get it all harvested but we’ll get by.” Maybe those are made up words on the Internet, maybe not; anecdotes are not data, etc. But maybe American citizens will end up doing hard work, after all.

Do immigrants take jobs from Americans, or do they do the work Americans don’t want to do? It looks like the latter in Georgia right now – and we’re all trying to confidently explain why – but maybe it will start leaning towards the former. We’ll just have to wait and see.