Wages for farm workers and food processing will likely rise, if the past is any guide.
Figure 1: Farm worker wage, 2023$ (blue, left log scale), and share of civilian employment foreign born (tan, right scale), both s.a. NBER defined peak-to-trough recession dates shaded gray. iFarm worker wage seasonally adjusted by author using X-13, deflated using CPI-U. Source: NASS/USDA, BLS, NBER, and author’s calculations.
Figure 2: Average hourly earnings for food manufacturing for production and nonsupervisory workers, 2023$ (blue, left log scale), and share of civilian employment foreign born (tan, right scale), both s.a. NBER defined peak-to-trough recession dates shaded gray. Wage deflated using CPI-U. Source: BLS, NBER, and author’s calculations.
How did these higher labor costs fit into wholesale prices? Here are some key PPI components vs. foreign born employment share.
Figure 3: PPI component for fresh fruit, melons, nuts (blue, left log scale), and PPI component for meat, poultry, fish (pink, left log scale), and and share of civilian employment foreign born (tan, right scale). all s.a. NBER defined peak-to-trough recession dates shaded gray. Source: BLS, NBER, and author’s calculations.
Now, one could argue that the increases in these PPI components was just a symptom of the generalized increase in the price level (some would say monetary policy). However, we can examine the relative price of groceries. Here’s that picture.
Figure 4: Relative CPI-food at home to core CPI (blue, left log scale), and share of civilian employment foreign born (tan, right scale), both s.a. NBER defined peak-to-trough recession dates shaded gray. . Source: BLS, NBER, and author’s calculations.
Notice that the relative price of groceries started falling once the share of foreign born employment re-attained pre-family-separation trend.
So, don’t say you weren’t warned.
Here’s Charles Hugh Smith’s contribution to the inflation/price-level debate:
https://charleshughsmith.blogspot.com/2024/12/the-big-shining-lie-were-better-off-now.html?m=1
Smith is one of those “let me explain what’s wrong with everything” kind of authors. He’s not the guy you want to rely on for objective analysis, so brace yourself. He has done a bit of “labor theory of value” math to argue that we are much poorer today than in the 1980s:
Ignoring Smith’s cranky-old-man, I-know-stuff style, there is a point to his argument. Housing is a larger share of living costs now than in decades past. Medical care and medical insurance, too. He actually missed an opportunity by not mentioning the cost of higher education.
Smith grouses about hedonic adjustment – a common complaint by those who say inflation is higher than measured. Personally, I think complaints about hedonic adjustment gloss over another problem – lack of consumer choice. Smith strays close to the point, but doesn’t really nail it down.
An article of faith for free (sic) market apologists is that capitalism provides greater choice than other economic systems. Rose and Milton Friedman’s book-and-TV campaign for unfettered capitalism was entitled “Free to Choose”. I cannot, however, choose a small single-family house in any housing development where I live. I cannot choose a new vehicle which can be repaired in my own garage. TVA has decided that I can’t have natural gas heating or a natural gas stove where I live. I cannot check into any medical facility other than an emergency room without medical insurance, and the insurer dictates the quality and nature of care I receive.
We are embedded in commercial systems not of our choosing. Those systems limit the choices available to us.
Brad Delong often compares the material blessings available to today’s common guy with those enjoyed by kings in days of old; we live in a world of material splendor, concludes Delong. Fine, but is the common guy better off today than in Smith’s idyllic 1980s? Fair question.
not to mention tariff hikes.
This is what occurs when you elect a low IQ common criminal
Axios has reported on the distribution of illegal workers, based on data from the American Immigration Council:
https://www.axios.com/2024/11/19/undocumented-workers-immigration-deportation-trump
Construction, with 13.7% of workers in the U.S. illegally, is threatened ever-so-slightly more than agriculture, at 12.7%. That 13.7% may understate the drag on housing construction from mass deportation. Between 31% and 39% of the various interior finishing speciality jobs are held by illegals. We may hear about framers and electricians being laid off because of bottlenecks further along in the construction process.
Similarly, the 12.7% figure for agriculture misses some important detail. Axios counts 28% of graders and sorters in the U.S. illegally – that’s fruits and vegetables. Fast Company reports that 30% to 50% of meat packing workers are illegal, but gives no source for that estimate:
https://www.fastcompany.com/91181711/how-the-meatpacking-industry-exemplifies-the-challenges-of-american-workers