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The lawsuit alleged that Defendants Thomas and Fisher conspired with human resources personnel at the poultry processing plant where they were employed, and at other facilities across the country, to lower wages and reduce labor costs by knowingly hiring and harboring illegal immigrants. Judge C. Lynwood Smith Jr., of the U.S. District Court for the Northern District of Alabama, granted Defendants Motion for Summary Judgment and their Motion to Exclude the Testimony of the Plaintiffs’ Economics Expert.
Dr. Welch stated in his report that the poultry processing company did not have the market power to manipulate the wages of unskilled workers at their plants, and that no reliable studies have estimated the impact of hiring illegal rather than legal immigrants on wages at an individual firm or plant. Dr. Welch also cited the Plaintiffs’ expert’s own academic research, as a Harvard professor, to undermine his assertion that (1) the hiring of illegal immigrants would lower wages locally, and (2) this local wage effect could be measured using the proposed methodology and external data. The plaintiff’s expert also asserted that the employment data provided by the poultry processing plant was flawed and inaccurate because employment fell while poultry production increased over the past several years at the plant. Judge Smith’s opinion cited Dr. Welch’s report which showed that this pattern was consistent with industry trends. Between 2003 and 2006 employment per plant fell in the poultry industry, overall, while poultry production per employee increased dramatically due to technological change and capital investment.   Dr. Welch’s report exposed fundamental weaknesses in the opposing expert’s methodology. Dr. Welch’s report stated that no damages were calculated and no evidence was presented that the defendant’s alleged employment of illegal immigrants caused wages to decline relative to what would have happened had no illegal immigrants been hired. Judge Smith’s opinion emphasized that, in deposition, the opposing expert had to agree with Dr. Welch’s conclusions. Over the past several years Welch Consulting has been involved in several other similar RICO cases in the carpet manufacturing, agriculture, and meat packing industries. In each of these cases, the opposing expert outlined his methodology in the event that the defendant was compelled to provide detailed wage and employment data. Welch Consulting was retained to challenge the opposing expert’s economic arguments and empirical methodology. The primary economic argument made by the opposing expert is that an employer of unskilled labor can influence local wages by hiring undocumented workers rather than other unskilled workers, such as legal immigrants or native born workers. There is, of course, no empirical evidence that companies have such market power. Even if one believed that employers had market power the proposed damage calculations are fundamentally flawed because they use the standard textbook elasticity of labor supply for calculating the market power and wage depressing opportunities for the employer. Because the elasticity of supply to a single firm is much higher than to the market as a whole, these proposed calculations are meaningless. In each case, Welch Consulting also cited the opposing expert’s academic research to explain why it is impossible to accurately measure the impact of immigration on wages by examining differences in the influx of immigrants across local labor markets. Welch Consulting cited the opposing expert’s published work which states that adjustments of capital investment and the internal migration of native workers means that the only way to gauge the impact of immigration on wages is at the national level. |
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Wednesday, 19 January 2011
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