Industries Crying About Labor Shortages Keep Getting Busted Suppressing Wages

Stop me if you’ve heard this one before: The United States is suffering through a labor shortage. Our nation’s captains of industry simply cannot find Americans with the grit and determination necessary to complete an honest day’s work. Because of this alleged deficiency in the American workforce, our government must open the floodgates and import vast numbers of foreign workers to fill the gaps.

This is the narrative of the moment, but those darn facts keep popping up to contradict it. The latest is a $10 million settlement with Seaboard Foods, and a separate settlement with Triumph Foods attaining their cooperation in the furtherance of the lawsuit against other processing company defendants. It is part of a larger lawsuit against 11 red meat processing companies alleged to be conspiring to suppress wages in the industry. This covers about 140 processing plants across the country.

This is not the only industry-wide conspiracy to suppress wages that has recently been uncovered. Poultry companies, representing about 90 percent of the poultry workforce, have also been exposed for a decades-long conspiracy to suppress the wages of workers. Both the red meat and poultry industries have also banded together to demand special visa privileges for their respective industries. The cognitive dissonance here is striking. They claim labor shortages in their industries, but there is massive evidence of collusion to suppress the wages of their employees.

Here’s a simple logical fact: No industry with an actual labor shortage would act to suppress the wages of employees. If you are, in fact, desperate for employees, then you increase incentives to attract prospects. In other words, labor shortages increase wages due to the scarcity of labor. This is the fundamental fact about scarcity. It’s the law of supply and demand. However, in both the red meat and poultry processing industries, they are claiming labor shortages while conspiring to suppress wages.

The lawsuit against the red meat processing companies includes: JBS USA Food Company, Cargill Inc., Cargill Meat Solutions Corp., Hormel Foods Corp., American Foods Group LLC, Triumph Foods LLC, Seaboard Foods LLC, National Beef Packing Company, Iowa Premium LLC, Smithfield Foods Inc., Smithfield Packaged Meats Corp., Agri Beef Company, Washington Beef LLC, Perdue Farms Inc., Agri Stats Inc. and Webber, Meng, Sahl and Company Inc. In addition to Seaboard and Triumph, Perdue Farms has also settled with the plaintiffs. As the dominoes start falling, look for more settlements to occur. The question is how to square these actions with all the talk of labor shortages and the demands for more foreign workers?

One thing wage suppression does explain is why these industries have difficulty recruiting Americans to work for them. When you are artificially and illegally suppressing the earning potential of your workforce, those workers will shift to other employment options. That is rational and imperative for American workers trying to earn a living. Herein, we see the entire immigration expansion shell game in full effect. They are creating a false crisis of labor to reinforce their desire to import cheap foreign labor to the United States. With enough cheap foreign labor, they can avoid hiring American workers at all.

This is also happening in the tech sector where mass layoffs are occurring simultaneously with annual record breaking registrations for H-1B visas. Tech recruiting companies are also settling a large number of discrimination claims that they excluded Americans from applying. These industries are suffering from a cheap, exploitable worker shortage, not a real one.
Congress, not surprisingly, agrees with their donors. Here is a quote from Senator Richard Durbin at a Senate hearing in 2019:

“When you go to meat and poultry processing plants in Illinois or anywhere across the United States, you will find a lot of immigrant workers. Many of them are undocumented. They take these jobs because they are hot, dirty, sometimes dangerous and the local folks don’t want them.”

Set aside, for the moment, the fact that the supposedly compassionate Durbin is seemingly endorsing foreign workers being forced into hot, dirty, and dangerous work out of desperation. Does he really think foreign workers want to be exploited? Anyway, we now know many of these processing companies have been actively conspiring to suppress the wages of these employees. “Local folks” understandably do not want to do hot, dirty, dangerous work for artificially low pay.

Instead of trying to increase wages and creating clean and safe working environments, the answer from both the industries and Congress is to simply import as many desperate foreign workers as possible to continue the exploitation that enriches CEOs and allegedly keeps prices of goods and services low (though current inflation calls the latter into question). This is clearly unsustainable as a business model. Our immigration system cannot be contorted to suit the whims of industries actively shutting Americans out of the workforce to keep their profit margins high.

Before we bend the immigration system to the will of industries seeking to exploit desperate foreign workers, these industries should try raising wages and improving working conditions. The United States cannot and should not be a world leader in economic exploitation of labor. Yet, a recent study found that the risk of forced labor is widespread in the U.S. food supply. Between layoffs, forced labor, and wage suppression, the problem is not labor shortages, but labor exploitation. Expanding immigration in this environment is adding gasoline to a raging fire.

JARED CULVER is a Legal Analyst for NumbersUSA