Immigrants Demonstrate Economic Clout

A pedestrian walks by one of the closed stores on 4th Street in downtown Santa Ana, Calif., Monday, May 1, 2006. Fourth Street, the busiest area for various businesses for and by Latinos, was almost vacant on Monday morning due to the closure of most stores to support the 'Day Without Immigrants' (AP Photo/Sang H. Park)

This is interesting. From Yahoo News:

Illegal immigrants made their point Monday: Without them, Americans would pay higher prices and a lot of work wouldn't get done.

As nationwide demonstrations thinned the work force in businesses from meat-packing plants to construction sites to behind the counter at McDonald's, economists said there can be no dispute within the context of the contentious immigration issue that the group wields significant clout in the U.S. economy.

"If illegal immigration came to a standstill, it would disrupt the economy," said Mark Zandi, chief economist at Moody's Economy.com. "It would lead to higher prices for many goods and services, and some things literally would not get done. It would be a major adjustment for our economy, for sure."

Another economist, Diane Swonk, said it would be an economic mistake to restrict entry and work rights when revising immigration policy.

"Given the obvious hardship of having illegal aliens flooding in, we also know they are critical to the functioning of the U.S. economy," said Swonk, chief economist at Chicago-based Mesirow Financial. "To be turning our backs on people who want to work is kind of silly in an environment where you've got tight labor markets and we're getting older and need younger people to work."

While the full impact of the one-day Day Without Immigrants boycott was hard to immediately gauge, it was palpable in some industries with a heavily Hispanic work force. On-the-job turnout was dramatically lower at some locales in the meat-packing, masonry, restaurant and landscaping businesses, and numerous firms closed for the day.

I would be curious to see what the economic impact of this boycott would be in lost business sales--especially in the areas of agriculture, food services, construction, hospitality, and retail sales. Consider some of these examples:

Mike Collins, who owns 500 acres of Vidalia onions in southeastern Georgia, was forced to shut down his packing shed and postpone his harvest when none of his 175 seasonal workers showed up.

"We need to be going wide-open this time of year to get these onions out of the field and we have nobody working today," he said. "Losing a day in this part of the season causes a tremendous amount of problems."

Tyson Foods Inc., the world's largest meat producer, shut five of nine beef plants and four of six pork plants in anticipation of widespread absences. Perdue Farms Inc., the nation's third-largest chicken producer, closed eight processing plants in seven states. Cargill Meat Solutions, the nation's second-largest beef processor, gave more than 15,000 workers the day off and closed plants in six states.

Gold Kist, another poultry producer, shuttered two North Carolina plants and operated its two Georgia facilities at reduced productivity after many employees failed to heed requests by the company's managers and CEO to show up despite the protests.

"We've tried to be open," said Wayne Lord, a vice president for the Atlanta-based company. "They were urged to come to work today because of our focus on satisfying our customer requirements."

Work sites operated in the Washington, D.C., area by Beltsville, Md.-based Manganaro MidAtlantic, a concrete and masonry company where immigrants comprise up to 75 percent of the work force, were quiet Monday. John Livingston, a business developer for Manganaro, said his firm has not been able to fill its staffing needs without immigrants for more than a decade.

Low attendance also was the story at hotels in Indianapolis, construction sites in Miami and plant nurseries and landscapers across a wide area.

McDonald's Corp. said some of its employees participated in the rallies, prompting it to operate an unspecified number of its nearly 14,000 restaurants with limited crews, shortened hours or drive-thru service only. The Oak Brook, Ill.-based company did not provide further specifics but released a statement saying it strongly supports U.S. immigration reform.

Carl Tannenbaum, chief economist at LaSalle Bank in Chicago, said the boycott underscores that immigration is not only political issue but a big economic one, too.

"The American economy really relies to a large extent on a growing labor force," he said. "There's a certain replenishment to the labor force that immigrants provide, and I think we have to be careful about taking steps that would hinder that process."