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Monday, December 18, 2006

Guard The Borders Blogburst

Today's Blogburst is also available as a Podcast.

The Price of Lettuce

By Nancy Matthis at American Daughter

Federal subsidies do not reduce the COST of food to the taxpayer. They increase it. Likewise, illegal immigration does not reduce the cost of food, or of any other goods and services, to the taxpayer. Illegal immigration also increases those costs.

In fact, illegal immigration increases the citizen's financial burden in exactly the same ways and using the same types of governmental mechanisms as the inefficient and ill-conceived government subsidy programs. Let's just look at the numbers. The available data points come from different years, so our results will not be specific for any single year, but will be representative of the general problem.

Note: This article responds to two comments made by liberals on earlier articles in our Illegal Immigration series.
  1. Joe Budzinski referenced our report on The Crider Case on Nova Townhall Blog. Over there, they play host to a token liberal, Stay Puft Marshmallow Man. Stay Puft took it upon himself to publish a response, We Can't Ignore Agriculture, featuring Critique of American Daughter.
    " work on very tight profit margins. They can't pay more. If they paid higher rates, the cost of producing a crop would exceed its market value.

    The only way to increase wages in these sorts of jobs would be to increase government subsidies even more (make tax payers pay for the wage increases), or let food prices shoot up (make consumers pay)

    both of these options seem untenable. In the later case, the negative economic consequences could be more severe than anything brought on by the recent influx of immigrants....

    We need this stuff, but in today's economy it isn't profitable without being propped up with tax dollars. Last year, we put over 16 billion dollars into these subsidies. "

  2. The Word-Drum took a shot at our friend Doyle, when he cross-posted our article Illegals Deadlier Than War On Terror on his weblog A Cool Change. As you can see, the fellow who left the comment cannot spell any better than he can do math.
    "As a Vegitarian American (Democrat) I resent having to pay the kind of prices for lettuce that would occur if we did something about illegals. It's Bush's fault anyway."
Both of these fellows believe in the incorrect "manna from heaven" theory of government assistance. It is an item of religious faith with liberals that we will deconstruct in the following discussion.

Update -- It is likely that the second comment was meant as a joke. The sad fact is that most liberals are so divorced from reality that it sounded like an authentic liberal response. And we are pretty certain that the first commenter really believes in his logic. As our contributor [Bad Moon Rising] likes to say, "They walk among us. And they vote."

The average expenditure for food per person in the United States in 2005 was $3,452 (source).

The average annual agricultural subsidy in the United States between 1996 and 2002 was $16 billion (source).

The population of the United States recently passed the milestone of 300 million (source).

So, if the value of the agricultural subsidy were applied to reduce the cost of food (it actually is not intended to do that and does not do that, but we'll get to that later) it would amount to a benefit of $53.34 per person.

$16 billion divided by 300 million = $53.34 per person

If the subsidy had the effect of benefiting the citizen, it would represent a savings of:

$53.34 on $3,452 or 1.55%

But wait just one minute! That $16 billion agricultural subsidy budget did not come, as liberals would have us believe, as manna from heaven. IT CAME OUT OF THAT SAME CITIZEN'S POCKET IN THE FIRST PLACE. Does that mean that he just broke even? No. Not even close.

In order to implement an agricultural subsidy program, the government had to maintain pro rata segments of
  • the Internal Revenue Service to extract the tax money from that poor hapless citizen

  • the Department of Agriculture to study the situation and distribute the funds

  • the General Accountability Office to audit everyone's books

  • the General Services Administration to provide all those agencies with buildings, utilities, and services

  • the legislative, executive, and judicial arms of government to create, administer, and judge such a program
Like a bad charity, government provides only fractional benefits in return for the resources it consumes. Our poor taxpayer will be very lucky to pay only a few hundred dollars for his apparent $53.34 benefit. So instead of saving him 1.55% on his food bill, the interference of the government likely costs him an extra three to four percent.

But that is assuming the government intended to help John Q. And that was never the intention. Agricultural subsidies have traditionally been used to pay farmers to let some of their fields lie fallow, so that overall they produce less, and prices remain high. Another use for subsidy funds has been to buy up the surplus of overproduced commodities and store it in government repositories, again so that prices remain high. These subsidies were originally introduced to buy the farm vote. Nowadays they are earmark payoffs for a few big factory farms, another form of big business.

Bottom line: John Q. the food consumer is being taxed to provide the funds that government uses to increase his costs.

The situation with illegal immigration is analogous. As it factors into the price of food, illegal immigration can be viewed as an additional agricultural subsidy administered and financed by government.

The farmer's cost of food production in the United States amounts to about 20% of the consumer's cost (source). The value of his crop land is determined by the real estate sector. The cost of equipment -- tractors, harvesters, whatever -- evokes names like Case, Caterpillar, John Deere, Massey Ferguson. A tractor is a tractor, a fixed capital cost. To make the case for the lower cost of illegal labor, one has to look at the systems in place for delivering food to the consumer, the other 80% -- including pickers, processors, packers, the employees in fast food chains, etc.

So will reducing the cost of labor in the food delivery pipeline save John Q. some percentage of his per capita annual food consumption costs?

80% of $3,452 = $2,762

Dispassionate analyses of the costs of illegal immigration are hard to find. One scholarly study was completed in 1997 by Dr. Donald Huddle, Professor Emeritus of Economics at Rice University. Based on 1996 data, he estimated the NET cost of illegal immigration to the federal budget at $24.44 billion. Extrapolated to 2006, through increases in the number of illegals and inflation, that becomes at least $70 billion this year (source).

Most of the organizations advocating for sensible immigration policy use this figure, which represents the cost to the government's budget, and note that this amounts to

$70 billion / 300 million= $233+ per capita for the US population

But wait just one minute! That $70 billion illegal alien subsidy budget did not come, as liberals would have us believe, as manna from heaven. IT CAME OUT OF THE US TAXPAYER'S POCKET. It was collected and administered and redistributed by the same inefficient charity -- the US government -- as the other agricultural subsidy. So to wind up with $70 billion in the federal budget to lavish on our law-breaking uninvited guests, our government had to extract many times that amount from us. You remember -- to pay for the IRS, the GAO, the GSA, the USDA, the three branches, and oh yes for pro rata segments of the Departments of Labor, Health and Human Services (remember our bankrupted emergency rooms), Justice (recall the illegals' disproportionately high percentage in the federal pens), etc.

Now we see that we are approaching a substantial portion of John Q.'s food budget. In fact, it has been estimated that illegal labor reduces the price of a head of lettuce about two cents. You'd have to eat a very great deal of lettuce to make this worthwhile.

Does anyone make out? Well, if you are the sort who spends a lot on maids to clean your house, gardeners to tend your lawn, perhaps a nanny and a chauffer, maybe yes. For example, if you can save $10 per hour on a maid who works for you one day a week (say $15 per hour instead of $25 per hour), you will save

$80 x 52 = $4,160 per year

And if you can shave a similar amount off the wages of a gardener who fine-tunes your boxwood and manicures your grass one day per week (say $25 per hour instead of $35 per hour), you can double your savings.

These wages are the going rates in the DC suburbs where our lawmakers have their posh dwellings. Throw in the Hispanic nanny who tends the little ones 48 hours per week while you are at work, and this becomes very attractive.

So the "Tijuana express" IS benefiting the folk who are responsible for keeping the underground railroad running. But let's be honest. This is not about the price of lettuce.

For an overview of our government's history of disastrous meddling in the agricultural economy, read Agricultural Subsidies in the HighBeam Encyclopedia here.

Previous articles in our Illegal Immigration series:

The Crider Case
Illegals Deadlier Than War On Terror
Going By The Numbers

This has been a production of the Guard the Borders Blogburst. It was started by Euphoric Reality, and serves to keep immigration issues in the forefront of our minds as we're going about our daily lives and continuing to fight the war on terror. If you are concerned with the trend of illegal immigration facing our country, join our Blogburst! Just send an email with your blog name and url to admin at guardtheborders dot com.