I was curious about the actual cost to Sonoma County ag employers of using foreign migrant labor, and what the effect would be if somehow, the migrant labor disappeared, or became unavailable. I spoke with a couple of friends of mine who are involved in agriculture, and who use foreign laborers to do manual labor of a repetetive physical nature. They gave me their opinions on the subject of "illegal" workers. They both employ Mexican migrant workers. They have both tried to hire American workers in the past, but have given up on that because the few American workers they could get to work for them tended to stay only a short time, frequently missed work, and almost always left with little or no notice. The quality of those workers' work varied quite a bit, but in general was not considered very good. One of the aggies currently pays workers $10/hour; the other pays $12/hour. One said that when they had hired Americans to do the same work, they'd paid $15/hour. One aggie told me that payroll costs, using foreign workers, amounted to about 22% of total expenses; the other aggie, who has a more labor-intensive operation, said that labor costs were closer to 30% of total expenses.
What would happen, if for whatever reason, these two aggies had to rely solely on American labor? They had an "unworkable" situation when they were offering Americans work at $15/hour. What if we assume that if they paid $30 per hour, they could get American workers to remain on the job, and perform reasonably well. If the employer who pays $10 an hour incurs 22% of their total labor costs, then if they triple the pay-per-hour, and all other expenses remain the same, their labor costs would be now be 66% of total expenses.
Since agricultural businesses typically operate on a very small, sometimes non-existent profit margin, these aggies would need to raise the price of their products to generate the revenue to pay for the labor increases. Let's say that they grow radishes. Perhaps they sell radishes to grocers at the rate of...for example only...30¢ a bunch. At 22%, their labor costs them 6.6¢ per bunch; at 66% their labor cost would be 19.8¢ per bunch. Now, to cover the additional labor costs, they'd need to charge grocers 50¢ a bunch instead of 30¢.
The grocer in turn would have to raise their own prices accordingly. The person who would either absorb the price increase, or deal with it some other way, would be the final consumer. Would they pay the increased price? Or, would they buy fewer radishes?
I think, since price on most things affects demand, the grocer would end up selling fewer radishes. Since the grocer depends on sales of radishes to keep their own employees working, they might have to lay some people off. Those laid-off employees wouldn't be able to afford radishes anymore, so the demand for radishes would go down even further. With a decreased demand for radishes by the grocer, the aggies would grow fewer radishes, and probably lay off some of those $30/hour laborers.
Of course, this situation would not apply just to radishes, but to any product that uses foreign labor. Examples would be all kinds of vegetables and produce, all hospitality industries, including restaurants and lodging, construction industries.