This is the first article in a two-part series on immigration in Minnesota. The second article, "The Real Immigration Crisis," can be read here.
Editor-in-Chief Dale Kurschner's related column from the August 2017 issue can be read here.
Four years ago this month, Twin Cities Business focused on immigration with a cover story titled: “The Changing Face of Labor.” The story examined how immigrant and refugee populations had grown in Minnesota since the 1990s, and how this trend had benefited the state’s economy.
The prospect seemed real that Congress would overhaul the nation’s outdated and complex immigration laws. This month’s stories examine what’s changed—and could change—since immigration has became a lightning rod in political campaigns and a primary focus of President Donald Trump. And we delve into the sectors that could be most affected by reduced immigration and increased deportations: agriculture and food processing.
Sitting in a minibus-sized office next to his dairy farm’s milking parlor, Pat Lunemann proudly holds up an 8-by-11-inch laminated card. It identifies the longest-tenured of 21 employees at his Twin Eagle Dairy operation, located about 40 miles north of Sauk Centre, Minn. Five have been there for at least 10 years, nine for five years or more. That says a lot, given that 15 years ago he had only a couple employees.
What stands out more, though, is that half the names on this list are Hispanic—and that this has become the norm at medium-sized to large farms and food processing businesses in Minnesota that, 20 years ago, were nearly all white.
The same trend has occurred elsewhere in the nation, but more rapidly in Minnesota since the late 1990s. The state has had among the lowest unemployment rates; combined with a net loss of domestic residents since 2002, that has created a growing labor shortage in nearly every industrial sector. Meanwhile, ag-related jobs have continued to grow like mustard weed, in communities whose populations have been shrinking since the 1970s.
Ag is a big deal in this state, generating $16 billion in economic output and 150,000 direct and indirect jobs. Minnesota ranks fifth in the nation for ag production, including livestock (in turkeys it’s first, hogs third and dairy cows sixth). It ranks first, second and third in production of sugar beets, corn and soybeans, respectively. And on average, an estimated 20 percent or more of the Minnesota workers behind these stats are Mexican or Somali, and mostly recent immigrants.
“One-half of the cows in the United States are now milked by immigrant labor, and it’s primarily by Hispanics,” Lunemann says. “Without that segment of the workforce we’d be in dire straits. It’s more than that if you look at fruit and vegetable production. But if you look just at livestock, across the spectrum and especially with hogs and poultry, there’s a significant part of the labor force that is now immigrants.”
Lunemann grew up on a family farm just outside of Clarissa, Minn., that his German immigrant grandparents started in the 1930s; he and his wife, Jody, took over from his dad in 1985. Since then, they incorporated and have grown the operation from milking 55 cows a day to nearly 800 today. Along the way, he served as president of the Minnesota Milk Producers Association and in January, became chairman of the Minnesota AgriGrowth Council.
Through the 1970s, most Minnesota farm kids grew up to be farmers, as Lunemann did. Since then, the number of farm families has decreased as farms consolidated. The average size of farm families shrunk. Farming’s tough economics, combined with a desire for greater financial rewards (including employer-sponsored health care) in other fields, prompted more kids to find their futures elsewhere. And longtime residents in rural Minnesota are aging. So back on the farm, finding labor has grown more difficult.
Finding workers also has become more challenging for food production and processing companies such as Sparboe Cos. (egg production and processing) and Austin-based Hormel, which works with hog producers all over the country. It also owns Willmar-based Jennie-O, which produces a variety of products from turkeys raised in several Minnesota communities including Melrose, Faribault, Montevideo, Pelican Rapids and Willmar.
Jerry Kjergaard was a school superintendent for 27 years, his last eight (through 2015) in Willmar, where Hispanics and Somalis quickly increased in population to where they accounted for more than 20 percent of the town’s population by 2011. The issue that first attracted immigrants to the area is continuing with the next generation.
“We have a lot of white kids who go to our schools, then to two-year or four-year schools after that; they had that option and could move any place they wanted to find a job. The jobs at places such as Jennie-O are not seen as acceptable to our white middle-class kids,” he says, noting the difference from his youth, when he worked a similar job right out of high school, as did many of his white, middle-class peers back then. “Jennie-O provides a good service, pays people decently and hires a lot of people. We owe it quite a bit as a community. The jobs are still there. But some of them, white people just won’t take.”
Meanwhile, immigrants “are hungry; they’ll take jobs nobody else wants, but hope that people will give them a chance if they will,” Kjergaard says. “It’s like it was with my family three generations ago; my grandfather worked on the railroads.”
Business leaders report a similar lack of homegrown talent to fill growing job demand. Their views fit Minnesota demographers’ reports indicating that from 2002 through 2014, Minnesota’s native population fell each year on average by about 5,000 people. Large inflows of immigrants offset those decreases and led to slight overall gains in the state’s population during those years.
While this may seem like a new development, a century ago, Minnesota depended on immigrants to help grow its towns and economy, although most immigrants then were white. And 21st-century immigration has had a more significant impact in smaller, rural communities than in the Twin Cities.
Kandiyohi County’s population, for example, grew from 2000 to 2010 because of an inflow of immigrants, who are largely people of color, according to a 2012 Wilder Research report. Nearly one in three residents under 5 are now of color. The number of Hispanic residents increased by 53 percent during that time and the group now accounts for more than 11 percent of the county’s population.
The change shows up on the main streets of towns that are home to large ag production or processing businesses. “Melrose, for example, or Pelican Rapids, Granite Falls, Montevideo—all the Hispanic folks now sitting along parade routes really strikes you, the difference from 20 years ago,” says U.S. Rep. Collin Peterson, who has served one of the state’s largest agriculture-rich districts since 1990, and is ranking member of the House Committee on Agriculture. The change has been good for those towns’ economies, he adds.
“In Melrose, for example, [the immigrants] and their families bought houses, fixed them up and it’s been one of the best things to happen to that community. These folks contributed not only by working but in other ways in the community, and they’re good family people and hardworking.”
Some, however, question whether this surge in immigration hasn’t cost Minnesota’s economy more than helped it. Critics say it’s increased how much taxpayers chip in to cover health care for undocumented immigrants, and contend immigrants are taking jobs that native Minnesotans otherwise could have filled (see “How Much Does Immigration Cost,” page 30), a sentiment expressed by President Donald Trump.
“I don’t think people are thinking of ag jobs when they think that way,” Peterson counters “I think it’s manufacturing jobs, and that it gets mixed up with NAFTA, where a lot of jobs went to Mexico. They’re not thinking about ag jobs, and unfortunately a lot of folks don’t know what it takes to milk the cows or pick the strawberries.”
Regardless, he says, anti-immigration sentiment in Washington is leading to near-panic situations for some major farmers he knows, including those in states such as Texas and California.
Immigration arrests rose nearly 33 percent in the first weeks of the Trump administration. In February, U.S. Immigration and Customs Enforcement (ICE) conducted raids across the country rounding up 675 immigrants for deportation. Dubbed Operation Cross Check, it was the most public sign the president was keeping his campaign promise to crack down on illegal immigration. From January through March, more than 21,000 immigrants had been taken into custody for deportation.
In contrast, President Barak Obama’s administration arrested almost 8,000 more immigrants during the same period in 2014. But what has made the recent action more alarming to immigrants and their employers was that they were combined with Trump’s executive order banning immigration from six countries, including Somalia; his efforts to add 10,000 more ICE agents to the force, and his “immigration reform plan” containing language that highlights an alleged burden immigrants place on taxpayers and their “disastrous” effects on job seekers who are U.S. citizens.
Minnesota ag producers and processors approached for this story say they don’t see it this way (though the majority of people living in their communities voted for Trump). Their immigrant employees are usually provided with health care insurance, pay taxes and contribute to the economy and social fabric of their communities, they say. And again, they contend there simply are no other job seekers for these positions, especially with unemployment as low as it is.
Meanwhile, they are concerned that there will soon be more arrests of undocumented individuals, as Trump has empowered federal agents to go after not only those with criminal records (Obama’s approach), but any illegal immigrants, even if they have broken no laws.
“We’ve all received a clear message from the administration that there will be increased focus on enforcement, but how that is going to be played out is unclear,” says Loan Huynh, a shareholder and immigration attorney at Fredrikson & Byron in Minneapolis. “It’s also more difficult for certain individuals to get visas to enter the country to work.”
Ag producers and processors in the state are so apprehensive about the situation that several declined to comment for this story or asked for anonymity. Being named “would be like painting a target on our company for ICE to raid us,” according to the owner of a poultry operation.
The apprehension isn’t because they knowingly employ undocumented immigrants; to the contrary, most follow all rules to verify their workers are legal, including obtaining their Social Security information so that they, just like native-born residents, pay their fair share into the IRS each year.
“They’re confident they’ve done their background checks and all the necessary paperwork is completed. People around here are doing what they can to make sure people are here legally,” says Ken Warner, president of the Willmar Lakes Area Chamber of Commerce. “Every employee counts these days, and you don’t want to lose people because of a technicality or because someone didn’t dot an I or cross a T.”
“Essentially, these employers should not know they have undocumented workers,” says Huynh. But I-9 audits by ICE occasionally find documentation errors or incomplete information. And every so often, there are still instances where an employer did nothing. In one instance, “80 percent of a company’s workforce was laid off because the employer could not come up with proper documentation. No arrests were made, but the employer no longer had a workforce; it had to look to temp agencies for help.”
Having applicants fill out and provide documentation for these I-9 forms is all that’s required by law. There’s even a free electronic verification system provided by the government. The problem is that E-verify is often wrong or doesn’t work, according to Peterson and a hog farmer who asked to remain anonymous.
On top of the fear of increased raids or I-9 audits, Peterson and others say ag production and processing employers worry the Trump administration will dramatically reduce, or even eliminate, the visa programs that allow immigrants to work for them seasonally or for three to five years on dairy and other types of farms.
“In talking with anyone from ag to ag processing to health care, the concern is that everybody’s here on some type of visa, and if they start yanking the visas, what happens then? It’s that uncertainty that’s on everyone’s minds,” Warner says. “There’s a real concern that they may just say we’re doing away with the visa program [for temporary employees].”
He adds that what’s true on farms in rural Minnesota also is evident in hospitals and clinics. “A lot of people are here on H1-B visas to lend us their expertise in the health care industry, and if somebody all of a sudden decides that policy is not strong enough and starts messing with it, we’re not strong enough in this country to lose these health care workers."
Meanwhile, the uncertainty is palpable. “Everyone’s concerned about a clampdown from the current administration,” the hog producer executive says. Aside from what that could mean for her operation and the economy, she says there are other ramifications to consider. “You have a demographic feeling discriminated against – Hispanics include citizens who moved here from states such as Texas. And you have communities such as Sleepy Eye that would really be affected.”
It’s obvious there’s a problem; what’s needed now is to move beyond “just talking about it and do something to make it better,” Warner says.
“I believe we should let the employers figure this out,” Peterson says. “As long as [immigrant employees] are not creating problems and are working, that should be good enough.”
Dale Kurschner is editor in chief of TCB.
Plenty of Minnesotans don’t buy in to the idea that immigrants and refugees are crucial to the state’s economic success. Their concerns have been reflected in a persistent push by Republican legislators and by the Center for the American Experiment, a conservative Twin Cities think tank, to establish the cost to taxpayers of resettling refugees.
GOP lawmakers turned to the Legislative Audit Commission, a bipartisan commission of the Minnesota Legislature, to determine resettlement costs. In April, the Office of the Legislative Auditor (OLA) concluded that a comprehensive evaluation of the costs and benefits would be “technically challenging” due to limited data availability.
In a background paper, the OLA staff explained that because so many public and private resettlement services are available, the office would likely only be able to focus on a sampling of service providers. The staff added that many state and local governments don’t track refugee services separately. Staffers also found that determining future benefits would require more research than could be done during the short time available for an OLA evaluation. But Judy Randall, the deputy legislative auditor, says OLA will do a more limited “data availability assessment,” probably by the end of the year.
The bottom line is that refugee resettlement costs to taxpayers are not tracked, says Kim Crockett, VP and senior policy fellow at the Center of the American Experiment. Crockett says the center plans to go ahead with its own analysis.
Meanwhile, she has been urging the Minnesota Chamber of Commerce, state officials and University of Minnesota researchers to look more closely at the taxpayer costs of supporting refugees and immigrants. They increase the state’s welfare outlays and lead to “huge indirect costs” for school districts, language assistance, the court system, law enforcement and other institutions, she wrote in an essay posted in February on the Center’s website.
She wants government and business leaders to focus more on retaining younger, native-born workers and less on refugees or immigrants. The center contends that these younger native-born workers are moving to the other states for reasons that include Minnesota’s high taxes.
Crockett suggests that President Trump’s executive orders curbing travel to the U.S. from six countries will trigger a harder look at the cost of cultural integration of refugees. She calls for suspension of the state’s resettlement programs until their costs can be assessed. She is particularly concerned about the cultural characteristics that differentiate the Somali community—Minnesota has the nation’s largest—and low workforce participation rates among Somali men. “Minnesotans don’t like to talk about such matters,” she wrote in an essay she posted in March. “It is politically incorrect and makes us uncomfortable.
“I’m willing to be the turd in the punch bowl,” she says.
Backers of the conservative Power Line blog share her concerns. Power Line blog co-founder Scott W. Johnson has stressed the ties of a handful of Twin Cities Somali men to ISIS terrorists. In the end, Crockett concedes that “most Minnesotans enthusiastically welcome skilled and unskilled immigrants who are ready to work, contribute to the tax base and embrace the American experiment.”