Minnesota businesses lament loss of cheap foreign labor
Pat Lunemann struggles to find employees to milk the 775 cows on his dairy farm near Clarissa, Minn. It is labor that legal immigrants from poor countries will take to gain a financial foothold in the U.S., but that many American-born workers in a vibrant Minnesota economy with low unemployment don’t want.
An existing labor shortage has the 58-year-old Lunemann worried that his third-generation family business will not survive to a fourth generation. If a Senate bill backed by President Donald Trump cuts legal immigration 50 percent in 10 years, Lunemann said, “the pool of labor will disintegrate.”
The recent anti-immigration fervor has obscured that fact to some Minnesotans, according to owners of immigrant-dependent businesses.
“It’s very difficult to move the bar” on people’s opinions about immigration, said Lunemann, whose farm is in central Minnesota’s Todd County, where 70 percent of voters supported Trump.
Yet Minnesota’s economic and industry leaders say halving legal immigration over 10 years would hurt critical state industries, raising prices, closing businesses and costing Americans jobs instead of producing them.
Multiple analyses by state and private groups show that Minnesota will need a major influx of immigrants — not cuts — just to maintain its current economic growth rate and many more immigrants to increase it. Demographic analyses show that the state’s aging population and low birthrate will soon leave native-born Minnesotans struggling to fill the state’s labor pool.
“The future of Minnesota’s economy and immigration are inextricably intertwined,” said University of Minnesota Prof. Ryan Allen, author of a January 2017 report, “Immigrants and Minnesota’s Workforce.”
“In order to maintain the current average annual 0.5 percent growth rate of the labor force …,” Allen wrote, “the state will need to attract about four and a half times the current number of people who move to the state.
The labor pool also is likely to be affected by Trump’s apparent plan to announce Tuesday that his administration will stop renewing work permits for undocumented immigrants who fall under the Deferred Action for Childhood Arrivals program in about six months.
Minnesota’s unemployment rate is lower than the national average, and in rural areas, farmers say, the people who can work are working already. Cutting off a supply of others willing to do demanding farm labor “just does not make a lot of sense,” said David Preisler, executive director of the Minnesota Pork Producers Association. “We need the people, and if we don’t get them, it costs the state money.” Those costs, he added, could be passed along to consumers.
Seeking the highly educated
Trump, meanwhile, has touted a Senate bill — the RAISE Act — that would cut legal immigration for many less-educated foreigners who traditionally have worked in low-end jobs. He sees this as a way to increase wages for native-born Americans who, theoretically, would get raises to do those jobs once legal immigration slows down.
Trump has endorsed a point system with a preference for highly educated immigrants, saying this “competitive application process will favor applicants who can speak English, financially support themselves and their families, and demonstrate skills that will contribute to our economy.”
RAISE Act cosponsor Sen. Tom Cotton, R-Ark., appeared with Trump at the White House in August. Cotton believes that less-educated immigrants in low-end jobs depress U.S. wages and that their families weigh heavily on social-service and educational systems.
“It puts great downward pressure on people who work with their hands and work on their feet,” Cotton said then. “Now, for some people, they may think that that’s a symbol of America’s virtue and generosity. I think it’s a symbol that we’re not committed to working-class Americans. And we need to change that.”
Democratic U.S. Sens. Amy Klobuchar and Al Franken of Minnesota oppose the RAISE Act. Minnesota Republican House members Tom Emmer and Jason Lewis did not take a position on cutting legal immigration. Republican U.S. Rep. Erik Paulsen did not respond to a request for comment.
Doctors, scientists and other highly skilled immigrants, who already wait years for their green cards, also could lose their place in line if the legislation the president favors becomes law.
“Those people, those doctors, researchers, engineers … we are pushing those people outside of America … and we will compete with … people whom we could have easily kept here,” said Debjyoti Dwivedy, a St. Paul data engineer and member of the advocacy group Immigration Voice.
As a percentage, Minnesota does not have as large a proportion of immigrants as many states. Still, the foreign-born population has tripled since 1990, fueled by a global influx led by people from Mexico, India, Laos, Somalia and Canada, reported researchers at Minnesota Compass.
Economists say this leaves the fate of the state’s gross domestic product (GDP) resting largely on attracting immigrants, not shutting them out.
In 2012, immigrants contributed an estimated $22.5 billion to Minnesota’s GDP, and in 2013 they paid more than $1.2 billion in state and local taxes, a report commissioned by the Minnesota Business Immigration Council showed.
‘From field to fork’
U economist Marin Bozic specializes in the dairy industry. He believes cutting legal immigration would lead to more-expensive dairy products as farmers pay more for labor, invest in job-killing automation or simply go out of business because of increased expenses. That alone could reduce the state’s GDP by “hundreds of millions of dollars” per year.
“It is debatable whether people vote in their financial interests or for ideology,” Bozic said of the resonance of Trump’s anti-immigrant message in the state. “But they need to know that the process from field to fork relies on immigrant labor.”
The same applies to industries such as health services, construction, tourism and retail.
More than half of Minnesota’s labor force growth since 2010 has been driven by foreign-born workers, said Steve Hine, of the Minnesota Department of Employment and Economic Development.
“Our immigrant population is the source of any [workforce] increase you’re going to see in the next 15 years,” he said. Cut the number of immigrants in half, he said, and “you’re essentially wiping out any labor force growth.”
That, in turn, “would really cut into the development and growth of the state’s economy,” said Bill Blazar, the Minnesota Chamber of Commerce vice president of business development. “Immigrants are part of the solution, not just for staffing, but for starting new businesses.”
In Worthington, Latino immigrants make up a big part of the population and the workforce at the southwestern Minnesota city’s major industry, the JBS meatpacking plant. But immigrant startup businesses also dot the main street.
In Warroad, a Laotian community in the far northern Minnesota city of 1,700 provides a labor pool for Marvin Windows, said Prof. Kent Olson of University of Minnesota Extension.
While gutting the low-end labor force, cutting legal immigration also would break up families by restricting foreigners from joining family members working legally in the U.S., said John Keller of the Immigrant Law Center of Minnesota.
Minneapolis immigration lawyer Sandra Feist said the RAISE Act would no longer let legal immigrants sponsor parents, adult children or siblings for U.S. legal status. The current sponsorship process already takes years, Feist said. “The idea that there are too many of these people” is “based on lies and bigotry,” she maintained.
How restricting legal immigration would benefit native-born Minnesotans is not clear to some business people who depend on immigrant labor.
Before retiring in 2016, Brian Thuringer spent years as president of the Madden’s on Gull Lake resort near Brainerd. Madden’s has in recent years relied on immigrants with temporary work visas to anchor its seasonal labor force. Thuringer opposes illegal immigration. Yet taking aim at legal immigrants does not really compute.
“I believe people should come [to the U.S.] under visas or green cards,” he said.
He also does not believe his or other industries that use legal foreign labor are hurting Americans.
“You won’t find any [of those businesses] who say we’re displacing anybody,” he said.
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