New Findings: Seasonal Foreign Agricultural Workers Create American Jobs

Michael Clemens released a groundbreaking (pun intended) new CGD working paper today titled The Effect of Foreign Labor on Native Employment: A Job-Specific Approach and Application to North Carolina Farms. Too busy to wade through the research methodology? Skip instead to this report, International Harvest: A Case Study of How Foreign Workers Help American Farms Grow Crops – and the Economy, also written by Michael and released today by CGD and the Partnership for a New American Economy.

As House Judiciary considers Rep. Goodlatte’s (R-VA) new Agricultural Guestworker Act, HR 1773, Senate Judiciary carries on its markup of the Gang of 8’s comprehensive immigration reform bill, and we wait (perhaps indefinitely) for a House version of a comprehensive bill, Michael’s research has two major findings with important implications for comprehensive immigration reform:

(1)  Seasonal foreign farm workers add dollars to the US economy—creating American jobs.

Michael’s economic analysis is a case study of North Carolina farm industry, based on data from the North Carolina Growers Association. Michael finds that in 2012, the 7,000 foreign farm workers added somewhere between $248 million and $381 million to North Carolina’s economy—creating one additional American job for every 3-5 seasonal foreign farm workers.

(2)  Few US-born Americans take these temporary farm worker jobs, meaning that these foreign workers aren’t displacing Americans.

Michael finds that despite high unemployment in North Carolina (500,000 unemployed Americans in 2011), extensive advertising, and wages that are required by law to meet local wage rates, only seven American workers actually accepted these seasonal jobs and then stuck with them until the end of the season. That’s right: seven as compared to around 6,500 foreign workers that year.

It’s hard to dispute that seasonal foreign farm workers are good—and needed—for the US economy given these findings.

But are H-2A programs also good for the foreign workers?

Yes. Michael’s earlier work with Lant Pritchett and Claudia Montenegro finds that these jobs are an economic opportunity of a lifetime for most migrants—“estimating that the typical Mexican low-skill worker can earn three times as much in the US as in Mexico, even after accounting for international price differences.” Here’s Michael’s great summary of why foreign workers benefit from guest work opportunities entered in the Congressional Record by Rep. Tim Walberg (R-MI).

You might also be interested in a few other brief pieces of Michael’s work on the economics of immigration reform:

• Michael and Lant’s brief on temporary workers (ie, the new W-Visa in the Senate bill), which shows that a well-designed program is a win for the US middle class, US low-skill workers, US border security, and for workers from developing countries.
• Michael’s assessment of the methodological problems with the Heritage Foundation report claiming that regularizing unauthorized immigrants will cost American taxpayers trillions of dollars.
• An interview with Michael by the Washington Post’s Dylan Matthews on the economics of immigration, in which Michael asserts that the real wage impact of immigration on Americans is “definitely positive, with no doubt whatsoever.”