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Chipotle, Immigration Reform, and the Future of Your Burrito

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In 2009, US Immigration and Customs Enforcement changed direction, going after employers who hire illegal immigrants rather than illegal immigrants themselves.

This "hooker/john" model, so to speak, snared 500 Chipotle employees in Minnesota, Virginia and Washington, D.C., and Chipotle CFO Jack Hartung said yesterday that the additional legal costs brought on by ICE will cause administrative expenses to go up in the current quarter.

When costs rise temporarily -- in Chipotle's case, due the current immigration kerfuffle -- companies can generally adjust fairly easily. However, if viable immigration reform does not happen soon, Chipotle's labor problem will be the least of its worries.

A few years ago, the American Farm Bureau Federation reported that the lack of a viable guest worker program could cut annual farm revenues by approximately $9 billion.

Bob Stallman, president of the federation, wrote, “Of all major sectors of the US economy, agriculture is the most dependent on a migrant labor force.”

He added, “Agriculture would face dire consequences if we were to lose our guest labor workforce. Would you prefer to eat food produced on American soil by migrant workers, or would you rather eat food produced on foreign soil by the same workers?”

Farmers are dependent on the migrant workforce. "We need them to milk cows or we'd barely be in business," Cochrane, Wisconsin dairy farmer Loren Wolfe told the Wisconsin Center for Investigative Journalism.

Guest workers who enter the United States on H2 visas are allowed to remain in the country for up to 10 months and pick the tomatoes that are made into the Heinz ketchup we buy at Walmart, process the milk used in McDonald’s shakes, pick the lettuce with which Burger King tops its Whoppers, and sort the strawberries the J.M. Smucker Co.  turns into jam.

“The H2 program achieves the goal of providing a sufficient workforce for growers,” Mike Gempler, executive director of the Washington Growers League, told me last year. “It helps the industry as a whole, stabilizing the workforce, and removes the risk of having your workforce disrupted at a critical period in the growing season. You may have only a few days to work with, and a farmer can’t risk having half his workforce being taken away by Immigration just like that.”

The bureaucracy standing between growers and much-needed labor can be daunting. To help navigate the red tape, companies have sprouted up to act as employment agents that have satellite offices in Mexico, where they help people obtain H2 visas, then help match employers with legal, H2-holding workers who are bused up to the States for a maximum period of ten months.

Bob Wingfield, who is president of one such agency, Dallas-based Amigos Labor Solutions, tells me that Americans don’t want the jobs these guest workers have. “It’s a fallacy that guest workers are sucking the system dry,” he says.

Far from sucking the system dry, there actually aren’t enough of them. In 2006, hundreds of millions of dollars worth of crops in Texas, Michigan, and California rotted in the fields because there were simply too few hands available.

Even contracted prison labor doesn’t make up for the shortfall. Arizona watermelon farmer Jack Dixon told the Christian Science Monitor he lost 400 acres of fruit -- $640,000 worth -- because he couldn’t get enough foreign guest workers approved for visas in time and only 3,300 prisoners (out of 37,000) under the supervision of the Arizona Department of Corrections are cleared to work outside.

Guest workers also contribute to the overall economy in farming communities, but those benefits are just one piece of the overall picture.

“Americans want a solution to our immigration dilemma, as do law enforcement officials across this nation. But the solution isn't turning every local police department into an arm of Immigration and Customs Enforcement,” read an opinion piece in the Los Angeles Times last year.

The author?

Not Rachel Maddow.

Not the head of the Socialist Party of America.

It was William J. Bratton, former Los Angeles Chief of Police.

Put that in your pipe and smoke it -- right after you get done smoking the rich, flavorful Virginia tobacco that happened to be picked by a Mexican guest worker here on an H2 visa.
POSITION:  No positions in stocks mentioned.