In an article titled, Decline in Immigration Threatens Growth of Regions on the Rise, New York Times columnist Miriam Jordan states that “Immigrants helped make places like Northwest Arkansas economic dynamos. But their dwindling numbers, a big factor in slower population growth, could have long-term repercussions.”
Her claim is predicated on the assumption that in a tight labor market, the only way U.S. based companies can grow is to import workers. In support she adds, “And the flow of legal immigrants, whom Northwest Arkansas companies also heavily rely on, has fallen precipitously since the Trump administration clamped down on all kinds of immigration with the belief that it was displacing American workers.”
Yes, President Trump did tighten-up on immigration and the travel bans imposed in response to COVID-19 did lead to a significant reduction in the number of immigrants. But are these companies really in danger of stagnating because they can’t find workers or is it they merely don’t want to pay American workers? If it’s the latter, what might those indicators look like?
Well, one indicator might be rising wages. In a capitalist economy there’s no such thing as a permanent labor shortage because the demand for labor places upward pressure on wages which then attract the needed workers. Another could be migration from other states, similar to what North Dakota experienced during the shale oil boom. And another one could be a drop in the poverty level.
Has clamping down on immigration in Northwest Arkansas led to the kind of economic contraction that hurts people there? Based on U.S. Census Bureau data for Benton County (Walmart headquarters), the percent of residents living in poverty dropped sharply during the time Trump was in office, 2015 to 2019. This illustrates that a tight labor market raises wages, and that workers benefit. Companies may not like it, but who’s side is Miriam on?
Are people moving to Northwest Arkansas to find those in-demand jobs? U.S. Census Bureau data indicates a consistent uptick in the population over the past several years in both good and bad economic times.
Are wages rising? The answer is yes. Wages rose significantly during the years when Ms. Jordan informs us the Trump administration forced immigration below 2008 levels. In 2015, the estimated mean real household income adjusted for cost of living in Benton County was $22,330. In 2016, it rose to $31,320 and in 2018, it topped out at $35,100.
In short, what we’re seeing in Northwest Arkansas is the immutable laws of supply and demand. If U.S. companies want to hire a top-notch workforce, simply pay higher wages, provide good benefits and invest in those employees to increase long term workforce quality.
Ms. Jordan also mentions another Northwest Arkansas-based company, meat purchasing and meat packing behemoth Tyson Foods. Tyson has a 33% share of the poultry industry, a 45% share of the beef industry and a 10% share of the pork industry. Together with JBS, Cargill and National Beef, they control 85% of U.S. meat purchasing and packaging. Their plants are enormous and considered by many as some of the most unpleasant places to work in the country. Hence, they require a steady stream of workers only too eager to put up with the appalling conditions.
But plant conditions could be improved and we’ve seen this occur on several occasions following ICE raids. For a period of time after the raids, companies were forced to raise wages, offer additional benefits and modify work rules to attract domestic workers to replace the illegal ones they’d lost.
Many conservatives like to claim that illegal immigration is bad and legal immigration is good. But it’s not that black and white. It is and has always been about the numbers. To paraphrase legendary labor leader Samuel Gompers, “immigration is, in all of its fundamental aspects, a labor issue because virtually all adult immigrants join the labor force when they enter the United States.”
A tight labor market sets off a virtuous cycle of events that leads to higher wages, a decrease in poverty and greater job security. But the chambers of commerce and the interests they represent will do anything and everything to ensure a surplus of laborers eager to earn less and to accept ever worsening workplace conditions.
Ms. Jordan is adamant for the type of reform that will make it much easier for companies to snatch-up eager foreign workers:
The U.S. Chamber of Commerce has called on Congress and the White House to double the number of visas for high-skilled temporary workers under the H-1B program and also for seasonal workers in sectors like agriculture and meat production, another economic mainstay in this part of the country.
In her interview with H-1B visa dependent “body shop” Kitestring who’s workforce is comprised of 35% H-1B holders, owner, Jared Smith states, “If I were to depend exclusively on U.S. citizens, it’s hard to imagine I would grow.”
Really, Jared? Kitestring’s sole client is Walmart and they make huge profits off labor arbitrage by reselling them contract laborers . If Kitestring put half their effort into recruiting domestically as they do in filing labor condition applications, I bet they’d have no trouble finding native talent.
In 2015, the AFL-CIO wrote a scathing report on how Walmart and IT firms in Northwest Arkansas are exploiting the H-1B program and thereby harming the prospects of young local STEM graduates. A press release for the report stated:
“The report ‘After Decimating U.S. Manufacturing, Wal-Mart Takes Aim at the Information Technology Sector’ contains strong evidence that Walmart and its contractors rely on the H-1B work visa program to meet the company’s routine needs for information technology (IT) labor, potentially displacing U.S. workers. Yet, many of the IT guest workers are denied a path to citizenship. The findings undermine the arguments advanced by corporate lobbyists pushing to expand the program.”
In the same press release the late AFL-CIO president, Richard Trumka said:
“As Congress resumes the debate on immigration reform, we hope the Senate will focus on the core flaws in our immigration system that contribute to economic inequality and wage stagnation, rather than advancing low-road employment models that have contributed to the erosion of the middle class.”
I have often pondered why is it the New York Times, the nation’s paper of record takes such a dim view of our wage-earning men and women. I think a lot may stem from what Chrystia Freeland described in her book, Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else as simply ego. She discussed how our plutocrats and the lackeys that serve them earn “ethical points” when they talk sympathetically about the poor and on occasion throw them a bone or two. But what they can never mention is “inequality.” Inequality is different because it brings into question the “appropriateness or legitimacy” of the profits companies like Walmart make. The NYT is more than happy to print pieces describing the plight of newly arrived immigrants who are just beginning their trek through the American working-class nightmare. But, they tend to shun stories about America’s working poor whose prospects are being undermined by companies that employ the very immigrants they lionize.
Moreover, I have also noticed a sense of viciousness with which many reporters describe working class Americans. Davy Crockett, America’s “King of the Wild Frontier” once said, “if I could rest anywhere, it would be in Arkansas where the men are the real half-horse, half-alligator breed such as grows nowhere else on the face of the earth.” If anything remains of those men today, one could surmise they would fit nicely into Hillary Clinton’s “basket of deplorables.” Those who subscribe to Clinton’s notion of native-born wage-earning Americans might consciously or unconsciously greet their displacement with a sense of elation. I am guessing that disparagement of working-class Americans by using terms such as redneck, trailer trash, fly-over country is probably common parlance at the New York Times.
In closing, instead of commiserating with Walmart and Tyson Foods on the best way to cope with not finding enough workers to exploit, I wish Ms. Jordan would open her eyes and write about the U.S. immigration system and how it creates a wicked cycle that leads to ever increasing levels of economic inequality, job insecurity, and a decline in the standard of living for American citizens.
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