Government: Distorting the Labor Market

Right From the Start

Several months ago, Danny Westneat, a columnist for the Seattle Times, was complaining that the crackdown on illegal immigrants was having an adverse impact on Washington produce growers:

“Nope. It hasn’t happened. Farm jobs are going unfilled to such a degree that now a huge fruit orchard in Okanogan County, desperate for someone to pick cherries and apples this summer, has turned to flying in hundreds of workers from … Jamaica.

“That’s right. From a Caribbean island more than 3,000 miles away.”

Westneat stated that produce growers had advertised jobs that would pay about $12.20 per hour for those picking apples and $16.50 per hour for those picking cherries. In neither instance were they able to attract local workers.

Westneat then noted:

“Lately, we’re on a get-tough kick with illegal workers. That would be fine — except for the part where we won’t do the work ourselves. At least not for the pay rates the farm economy says it requires (Appel says he doubts pay of $20 an hour would draw any U.S. applicants.)

“So in trying to get tough, instead we get absurd. Firing hundreds of trained workers who already live here while being forced to jet in new ones from thousands of miles away.”

Great story but there are a couple of holes in it.

There’s a reason that you can’t attract local workers for these jobs and it has nothing to do with immigration policy and probably little to do with whether the growers are offering a sufficient wage.

According to the Washington State Department of Employment Security, unemployment benefits pay workers about $570 per week – that’s about $29,640 per year or about $14.80 per hour. In addition to the unemployment payments you can qualify for food assistance and free medical care.

Picking any crop is hard work. It should be no surprise that if you are willing to pay someone $14.80 per hour to sit on their duff, they are probably not going to take on hard work picking cherries for an extra $1.70 per hour let alone a cut of $2.60 per hour to pick apples. The fact of the matter is that government has distorted the labor market by paying people in excess of what some jobs will pay. Until people have to make the choice between accepting hard jobs and not eating we can not determine what the true market value of labor is for picking produce.

Congress continued the distortion of the market by extending unemployment benefits for another thirteen months – thirteen months.

The idea of paying unemployment compensation to people who have lost their jobs is a good one. Even the idea of allowing people to refuse work that is not equivalent to their previous employment is a good idea for a limited period of time. Both of those “good ideas” have been tossed in the waste can. I would suggest that the laws relating to unemployment compensation be amended to allow people to look for comparable jobs for the first twenty-six weeks and thereafter they should be required to take any job paying above minimum wage that they are physically capable of performing or lose their unemployment compensation.

My guess is that if that rule applied in Washington currently, the growers would not have found any difficulty filling jobs at $12.20 per hour or $16.50 per hour.

There are two other parts of the Westneat article that bother me. First, there is an innate racist attitude to believe these jobs are appropriate for brown people from Latin America, or black people from Jamaica, but unsuitable for white people from Central Washington.

And second, if Westneat had his way and legalized all of the current illegals, they too would qualify for unemployment and food stamps and soon enough they wouldn’t undertake hard work for wages that approximated what they could get for doing nothing on unemployment.

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Posted by at 05:00 | Posted in Economy | 13 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Avideo99

    I belive the $570.00 per week unemployment pay is based upon a relatively high rate of pay – not what people earn picking crops. The simple fact that we have people sitting on their butts for 99 weeks collecting unemployment tells me that anyone collecting UE for that period of time is likely NOT looking for work at all.

  • Bob Clark

    Unemployment compensation is pretty easily abused under current verification procedures. Actually unemployment compensation has always been too easy to qualify. For example, just fill out a few job apps with sloppy handwriting or half hearted enthusiasm, and the employer knows it’s not a genuine application. Then too, businesses pay for unemployment comp and the more they pay the less inclined they become to rehire or hire new employees. America needs to get back to being a little harder nosed about these things, or else it loses top dog status. If you’re not grow’n, your dy’n. The laws of nature and the jungle have not been repealed. Eventually someone like China eats your lunch. Eye of the tiger, baby!

    I also wonder if child labor laws don’t also work against filling these seasonal jobs with young folks, an age group having an especially difficult time finding employment for lack of work experience.

    • Rupert in Springfield

      >Then too, businesses pay for unemployment comp and the more they pay the less inclined they become to rehire or hire new employees.

      Very good point

      Most are under the impression that unemployment benefits come from the same mysterious Obama stash that “cash for clunkers” or the failed stimulous pay outs came from.

      Not true – when congress extends unemployment benefits, what they have just done is sent a bill to every business in America. In essence its public financing of political campaigns for blue state politicians financed by anyone running a business.

      I have been at the minimum rate for unemployment insurance for the last decade. Under BO my unemployment rates have tripled. Therefore hiring for me or any other business is that much more difficult.

      Thanks Obama!

      Will it get better any time soon? Nope. Even with an average growth rate of 4%, something BO would be salivating over it will take years for unemployment numbers to get even close to anything we once considered normal. Coming out of a recession a 4% average growth rate would be unremarkable. Since there is no indication Obama can even achieve that low bar you combine that with the high costs of hiring someone now helped in no small part by escalating UI rates and the problem becomes self perpetuating.

      PS – Yes, the fact that I mentioned anything about UI in a less than positive manner does in fact mean that I advocate turning all unemployed people into chowder via large shredding machines, their remains used to slop the poor, who I also hate and would exterminate as well once they had digested the chowder of the unemployed.

      • valley person

        Darn that unemployment insurance anyway. Never mind that a few short years ago the unemployment rate was around 5%, and lower than that in the 90s. Why were they working then and not now? Did it have anything to do with a financial bubble bursting and taking their jobs away? No, I guess not. I guess they just became lazy all the sudden.

        All those lazy bums sitting on their duffs (unlike Larry I guess) should get their butts out there and move from wherever cozy blue state they live in to a real American place far away in the hinterlands, that has no housing, no school capacity, and probably no wireless (that is a joke) for a seasonal job lasting a few weeks. If these lazy software engineers and construction crane operators would only do this, problem is solved. No more unemployment. At least for a few weeks that is.

        Great idea . I think the first act of the newly elected tea party should not be a phony symbolic effort to repeal the health care law. It should be an equally phony symbolic effort to repeal unemployment insurance. Put those bums to work!

        And after that they should raise the retirement age to 80. Those geezers would do well to climb up a ladder with a bushel around their necks. Fresh air, bracing atmosphere…real America. In the off season they can hunt and gather. Like in the really god old days.

        • Rupert in Springfield

          Your never fail to fulfill the predictions of your behavior.

          • valley person

            I wouldn’t want to disappoint you. But tell us Rupert, what is your position on unemployment insurance? A good idea, but one we shouldn’t actually fund? Please explain.

          • Rupert in Springfield

            I already stated my position, as well as yours.

            You then restated your position as I predicted – criticism of UI equates to advocacy of extermination.

            What in the world is the point of endlessly restating things?

            Our positions are simple:

            I feel extending UI slows unemployment reduction.

            You feel any remarks that are less than positive about UI equates to advocay of extermination.

            Its pretty simple – you have three main modes of discussion.

            1 – Dodge – when you cannot argue the topic, attempt topic shift through non sequitur. Excuse non sequitur by blaming others writing. Never admit you are wrong.

            2 – Feign lack of comprehension. Argue non sequitur but when called on it feign inability to comprehend argument. Topic shift will typically devolve at this point to mocking reference to the person who has knowledge of a subject that is common, yet greater than yours, as a titled expert in the field. Never admit you are wrong.

            3 – Argue absurdity – This is the case we have here. Any position you do not like but yet cannot logically argue, extrapolate to absurd case that the person wants to exterminate whatever group of people is involved. If no single group is involved extend to absurdity by claiming the person is against any form of government whatsoever. Never admit you are wrong.

            1 and 2 are somewhat similar. However 2 is more often distinguished by use of Yiddish phrases, often incorrectly, in the final iterations of the argument.

            This thread is a good example.

            You start in mode 3

            Then when it is pointed out to you that you have acted entirely in the way predicted you cannot admit you did so, thus admitting error, so you switch to mode two.

            In mode two you feign lack of comprehension of my position, even though its pretty clear I am saying extension of UI does tend to slow unemployment reduction.

          • valley person

            Yes well ok then. Extending unemployment slows unemployment reduction. I could buy that. Its probably true. Does that mean we should never extend it bubele?

            You are gornisht helfn you know.

          • Marty

            There is no end to the largess of those who get to give away other people’s money, is there? First of all, we are rewarding people for being irresponsible. Where is it written in stone that you will have your job forever? Whatever happened to the concept of “saving for a rainy day?” Out the window with all the other indicia of personal responsibility in America. Unemployment insurance was never intended to replace “a job” but that is exactly what it has become. There are plenty of jobs in this country, not something you might want to make your career, but jobs nonetheless that pay money. And so why are we allowing these bums to collect their checks and do nothing in return? Go flip hamburgers or check out groceries while you are waiting for your old job to come back. And if you just can’t bear to have your friends see you working at McDonald’s, then go out and give service to your community. The schools are falling apart and the kids are running wild. Why don’t these people sucking up their unemployment benefits gets themselves over to the schools and offer their assistance or to their churches or the Salvation Army. Everyone drawing unemployment ought to be cut off unless they demonstrate they are giving their time to their communities when they are not out looking for a job. This 99 weeks of free money is disgusting. And when exactly does Obama think that it has gone on long enough, or does he?

          • Valid

            Yes, of course. The problem is with the lazy hairy masses who don’t want to work, and not that so-called free trade agreements have distorted the global labor market by refusing to protect American industry against currency manipulation, worker exploitation, and countries that allow industries free reign to externalize all of the environmental impacts of their manufacturing processes.

            And God help you if you suffer from a catastrophic illness while working your shifts at McDonald’s. Jerks like you will tell those people — heart attack and stroke victims, for example — to “pull themselves up by their bootstraps when faced with hundreds of thousands in medical bills, no employment, and with only the savings earned making $15k per year working a minimum wage job.

            So much for compassionate conservatism.

        • Hi Dean,
          Congratulations on finally electing a savvy and realistic Mayor in Damascus.


  • Valid

    Larry – I have yet to see a post from you where you do not blatantly distort the facts to fit your argument. In this case, you claim that Washington state unemployment benefits are a flat $570 per week. That is simply a false statement.

    Here is the unemployment benefits chart used by Washington State:

    In order to qualify for unemployment benefits of $570 per week, a worker would have to have earned $765 per week. Also, many conservative hacks seem to forget that workers and employers pay into the unemployment INSURANCE program. In order to qualify for unemployment insurance, a person first has to have a stable job, and eventually, those unemployment insurance benefits will run out so it’s not like most of these oh-so evil poor people are not willing to work.

    Stop with the class warfare, Larry. No one is terribly sympathetic to the plight of rich white telecom execs.

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