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Population, Environment, and Economics

 

                                                                     May 28, 2007

 

Dear Senator Feinstein:

 

I am very concerned about the AgJOBS bill and your proposal to restore the supply of cheap immigrant labor to California farmers.  These and other proposals for increasing or maintaining levels of immigration in order to fill jobs, whether the positions are for farm workers or doctors or engineers, are shortsighted.  If we use immigration to address labor shortages today, desirable changes will not occur in how we train, pay, and use workers.  Tomorrow, with a bigger population, partly due to the influx of immigrants, we will likely have an even bigger shortage of workers.  As today’s immigrants and their children rise to the next rung of the economic ladder, farmers will ever demand a fresh supply of immigrants willing to do hard work for low wages.

 

The true cost of immigration, and the resulting population growth of the country, is underestimated.  It is more than a downward pressure on wages and a need for more schools.  Our entire infrastructure, including roads and other transportation systems, healthcare, public services and administration at all levels of government, and much more need to be expanded.  Using population growth as a driving force for economic growth is a giant pyramid scheme.  The real estate market is just part of the broader pyramid of the economy as a whole.  The few get rich, but the newcomers and those who are passed by are poor.  Consider that the US Census recently reported that more persons are living in severe poverty now than at any time in our nation’s history.  And a recent analysis determined that the median income in our country, when adjusted for inflation, is now lower than it was in 1974, despite increases in worker productivity.

 

The situation with regard to wealth is probably worse than with income.  While low median income and high numbers of people living in poverty are probably results of continued influx of large numbers of low-wage workers, and resulting downward pressure on wages, and is perhaps entirely a phenomenon of uneven income distribution, a decrease in median wealth, which likely also has been occurring, may reflect an actual decrease in average (per capita) wealth.  A decrease in per capita wealth surely will be found to be more pronounced if public as well as private wealth is considered, which total wealth would therefore include the total land of the nation.  The total land value per person was a meaningless theoretical number in the early years of our nation’s history, when the country consisted of small settlements on the edges of vast wilderness areas.  No longer.  Wilderness areas are diminished to a point where further decrease would jeopardize our remaining wildlife and natural heritage.  The destruction of our remaining wilderness is a price we should be unwilling to pay for having more people.  So as the population grows, the finite amount of land available for each person’s use becomes ever smaller.  The intrinsic value of the land per person steadily decreases, even if the market value does not.  (Population growth makes each acre of land grow in value; hence the real-estate pyramid.)

 

Economists seem not have warned us sufficiently of the negative effect of population growth on per capita wealth.  They instead seem to have persisted in urging us ever to pursue economic growth.  The purpose of economic growth in an already rich country presumably is to raise the standard of living of the poor in that country.  However, the economic growth fueled by population growth that we have been having benefits mainly the rich.  It is truly a kind of pyramid scheme, in which not only the new arrivals from other countries, but also our children are forming the bottom tiers.  Americans are increasingly noticing that they are poorer than their parents.  This process will continue as long as our population keeps growing at such a rapid rate.

 

Many employers, and their supporters among policy makers, state adamantly that we need to import more workers, both skilled and unskilled, to do necessary jobs.  They warn of dire consequences, including decreased competitiveness as a nation, if we fail to import them.  When coming from employers these claims must be seen as self-serving.  We also need to question our goals.  How important is it to continue to be far out in front as the world’s largest economy?  Should we put a high priority on staying ahead of China in size, even if it means bringing our average standard of living down closer to China’s?  Why do we not instead try to compete with countries like Denmark in having the highest standard of living and the lowest rate of poverty?

 

We Americans have become poor savers and investors.  In particular, we do not want public investment if it means higher taxes. We borrow now and we have to pay with interest later.  Similarly, when we import workers, it seems to cost us nothing, but we do actually pay later, and as a nation we are worse off than if we had looked for other solutions to labor shortages.  The most serious costs are related to population growth.  But there are other costs as well.  For example, for many years we have been importing about a quarter of our doctors.  It is a gift, albeit an unwilling one, from the mainly poor countries who educate these doctors.  It saves us the expense of educating them (which would require increasing the size or number of our medical schools), but it means that 25 percent fewer Americans are able to become doctors.

 

So what should we do about the California fruit and vegetable growers?  What would happen if their supply of cheap labor from Mexico continued to be diminished, or even abolished completely?  As you have said, farmers might stop growing or harvesting these crops and the prices of many fruits and vegetables would soar.  At that point, growers might be able to offer much higher wages to workers, and Americans would be attracted to the jobs.  Then, with the cost of labor much higher, growers and the makers of harvesting equipment would be motivated to try to develop more efficient harvesting methods and equipment.  Even so, it is possible that the prices of many fruits and vegetables would remain out of reach for many Americans.  Because of the public health benefits of eating fruits and vegetables, we might then subsidize the consumption of these foods through an expansion of the food stamp program to a larger number of lower-income Americans, with the inclusion of special stamps that could only be used for fruits and vegetables.  We could pay for these stamps with a new income tax that would be collected only from multi-millionaires (similar to the new California tax on millionaires for mental health services).  Rather than keeping fruits and vegetables on our tables by continuing to rely on a steady influx of immigrant workers, which tends to reduce per capita wealth, and to concentrate wealth more in the hands of a few, we would be doing it by redistributing a little bit of income in the other direction, from the richest to the poorest, which is long overdue.

 

Sincerely,

 

David Sirkin, MD, PhD

 

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