A couple of paragraphs from a WSJ article on the putative labor shortage (which should actually be thought of as a shortage at the desired wage rates of producers) the US dairy industry faces caught my attention:
Dairy farmers in Europe have begun to use robotic milkers to reduce dependence on manual labor. But due to the high capital investment required, adoption in the U.S. is likely to be slow, Mr. Maloney says.This brings to mind the timeless Platonic adage, "Necessity, who is the mother of invention."
Phil Martin, an agricultural economist at the University of California, Davis, believes if labor gets much more expensive in the dairy sector, those higher wages could spur investment in technology -- "although it's not clear at what wage," he says. Currently, the average hourly wage for dairy workers in California, for example, is $11.38. Even though minimum wage is lower, he says, "I would suspect a whole lot of 18-year-olds prefer to work at McDonald's for minimum wage than milk cows."
It is difficult to get information on the economic situation of the industry nationwide, presumably because most dairy is produced 'locally' (within 100 miles) and consequently it is less centralized than many other agricultural industries are (if any readers are aware of such data, please share it in the comments--I would ideally like to look at this in more quantitative detail). But if $11 an hour is the going rate in a state with a minimum wage of $8 an hour and economic viability requires it not increase beyond that, even swith as little knowledge of the industry as I have it is clear that if the monetary standard of living is presumed to increase in the US going forward, this is not sustainable without greater mechanization. Yet the availability of cheap labor inhibits this from being adopted.
Low wages and first world status do not mesh. According to a study led by the Heritage Foundation's Robert Rector, low-skilled households created an average net fiscal deficit of more than $22,000 in 2004. Nine percent of natives are classified as low-skilled, as are 25% of legal immigrants and 50% of illegal immigrants. The per family deficit has likely increased during the current recession, as the unemployment rate for immigrants is now, as of the beginning of 2009, higher than it is for natives.
Why subsidize the labor costs of dairy farmers if doing so will retard long-term increases in domestic productivity? I do not see why our immigration policy should encourage the perpetual search for an ever larger, cheaper labor pool at the expense of per capita productivity increases. As Steve Sailer tersely articulates, the inverse of such a formula has led to the historically high living standards Americans have enjoyed:
America's proud history as a middle class country rests fundamentally on two advantages of settling a mostly empty continent: a small supply of labor and a large supply of land.
This meant relatively high wages and low land prices, so Americans could afford to buy their own farms and homes.
In turn, this virtuous cycle encouraged Americans to invent labor-saving devices
like the reaper, the washing machine, the assembly line, and the semiconductor.
Which made Americans even richer and more independent.
Sadly, immigration has created a wasteful abundance of cheap labor and contributed to a shortfall of cheap land.