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Farm bureau and Oregon officials blast 'heavy handed' federal labor investigations
The Oregonian ^ | Thursday, August 30, 2012, 9:23 AM | Eric Mortenson

Posted on 09/03/2012 6:30:02 AM PDT by DeaconBenjamin

In late July, investigators with the U.S. Department of Labor visited three blueberry farms in Marion County and announced finding "widespread" record-keeping and minimum wage violations at each.

Farm labor law investigations are often contentious, especially involving fruit pickers working on a "piece rate" basis rather than an hourly wage. But these cases took an unusual turn as the labor department's Wage and Hour Division staff in Portland dropped the hammer.

In a move Oregon's congressional delegation and the Oregon Farm Bureau say was unprecedented and deeply unfair, the department invoked a "hot goods" provision of labor law that prohibited shipment of the berries. Labor officials also notified wholesalers that berries from the farms would be subject to the order and should not be processed or shipped.

Suddenly, the growers were stuck holding perishable berries worth hundreds of thousands of dollars. The labor department offered a way out: Pay a fine and back wages and sign a consent judgment admitting wrong and agreeing not to contest the order even if subsequent information exonerated the farms.

Greg Ditchen, a third-generation Silverton farmer whose B&G Ditchen Farm paid the $169,816 in back wages and penalties, called the department's action "extortion." Half his crop was at risk and there was no time to offer a defense or pursue other legal options.

"They put a hot goods order on our fruit, and after they had the money they said we had to sign a paper saying we were wrong," Ditchen said. "We had to make a business decision and sign the paper."

A second farm, E&S Farms Inc. of Woodburn, paid $11,301 in back wages and a $10,500 penalty. Earlier this month, the Department of Labor said Pan-American Berry Growers of Salem signed a consent order to pay $41,778 in back wages and a $7,040 civil penalty.

A retired federal Wage and Hour Division investigator who reviewed two of the cases for an attorney representing the farmers said the agency's action was hasty and alarmingly incomplete.

"They put a noose around the neck of these farmers right off. That is not what Wage and Hour is about," said Manuel Lopez of Eugene, who was a labor investigator for 27 years.

Oregon officials are furious. The state's labor commissioner, agriculture director and most of the state's congressional delegation asked the labor department to explain its action.

Labor Commissioner Brad Avakian was the most direct. In an Aug. 15 letter to the federal agency, he said seizing perishable crops probably violates the constitutional search and seizure and due process rights of farmers "who have yet to be found guilty of anything."

Avakian asked the department to immediately cease using the "hot goods" provision, which refers to a clause in the 1938 Fair Labor Standards Act originally intended to halt abuses in the garment industry.

Avakian said the department should use an enforcement tool that "does not result in irreparable harm prior to full investigation and a fair process of adjudication."

In an Aug. 17 letter, the congressional delegation said the federal Department of Labor "may have abandoned normal due process mechanisms." Use of a "hot goods" order is reserved for cases in which farm labor violations are "willful, egregious and/or repeated," the letter said.

Senators Ron Wyden and Jeff Merkley signed the letter, as did representatives Kurt Schrader, Peter DeFazio, Greg Walden and Suzanne Bonamici.

Oregon Agriculture Department Director Katy Coba also complained, saying hot goods orders are "being issued as a first step in the compliance process instead of the last resort."

"This appears to be a very heavy handed approach," she said in an Aug. 15 letter to U.S. Labor Secretary Hilda L. Solis.

U.S. Labor spokeswoman Deanne Amaden said the department is "not in a position to discuss cases in greater detail right now," but may have a more detailed response within two weeks.

Enforcement action involving the Fair Labor Standards Act are intended to protect workers and level the playing field for employers, she said.

Tim Bernasek, a Portland attorney representing B&G Ditchen Farm and E&S Farms, said the signed consent judgments may limit his clients' appeal options. Along with the Farm Bureau, he hopes to continue discussions with the Labor Department and halt the use of hot goods orders in future investigations.

Dave Dillon, the Farm Bureau's executive vice president, said labor investigations can be sorted out over time.

"Farmers are not in a business that's going to pack it up in a truck tonight and head to another state," he said. "What's the urgency of saying stop your whole business until you admit guilt, pay a fee and have no due process?"

Farm labor law is complicated. Fruit and berry pickers often are hired and supervised by contractors, but Oregon farmers nonetheless bear responsibility in a system that requires them to carefully track employees, hours worked and wages paid. If an investigation shows they messed up, through carelessness or otherwise, they can expect to pay back wages and fines.

Most harvest workers prefer to work on a "piece rate," or per-pound basis, because they can make more money than settling for the fixed, minimum wage. It is a farmer's obligation, however, to track hours and picking totals to ensure workers earn at least the federal minimum wage of $7.25 an hour. The law has exceptions and exemptions that further complicate matters.

In some cases, two or more workers -- often family members -- will pick on the same ticket. Attorneys and the Farm Bureau discourage that practice, because it complicates record-keeping.

In the Ditchen Farm case, documents indicate blueberry pickers earned 33 cents per pound. A worker picking two buckets an hour, for example, approximately 28 pounds, would earn the equivalent of $9.24 an hour. Farmers and others say the best pickers can earn $30 an hour or more.

Bernasek, the attorney, said labor investigators concluded anyone picking more than 60 pounds an hour at the Ditchen farm must have had someone else picking with them, and docked the farm for back wages due those workers. But Bernasek suggested such "ghost workers" are unidentified and may not exist, and said back wages collected on their behalf will never be distributed.

Lopez, the former labor investigator, said he did a one-hour time study at the farm involving 17 pickers. The workers picked from 112 to 196 pounds in an hour, well over the department's 60-pound standard.

"They didn't do a complete investigation," he said.

Lopez said the Ditchen farm may have committed some "record keeping" violations, but said the hot goods order wasn't necessary.

Greg Ditchen, the farm owner, said he's never been in trouble before and may use only mechanized harvesters in the future.

"It's not the labor," he said, "it's the people who come out and tell us we're doing wrong."


TOPICS: Business/Economy; Government; US: Oregon
KEYWORDS:

1 posted on 09/03/2012 6:30:08 AM PDT by DeaconBenjamin
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To: DeaconBenjamin

Sorry no sympathy from me.. Farmers looking for the cheapest immigrant labor that taxpayers always end up subsidizing (cotton picking ring a bell?) need to use mechanized pickers or pay a wage that Americans will accept. I don’t accept that farmers should bring in poverty that the rest of us must subsidize.


2 posted on 09/03/2012 6:40:10 AM PDT by apoliticalone (Honest govt. that operates in the interest of US sovereignty and the people, not global $$$)
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To: DeaconBenjamin
Hmm, so the farmer's position is 'So, sue us" (instead).

Interesting way to do business when all you have to do is keep track of the hours worked and how much was paid.

3 posted on 09/03/2012 6:43:07 AM PDT by muawiyah
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To: DeaconBenjamin

If the Politicians and Elected leaders in Oregon were truly “Outraged” at these heavy handed gestapo tactics, they would have had the State Police Arrest and Jail every last one of these folks from the various Federal Agencies taking part in this shakedown, for their ADMITTED FELONY EXTORTION.


4 posted on 09/03/2012 6:44:40 AM PDT by eyeamok
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To: DeaconBenjamin
Farmers need to set up shell corperationts saying they are illegal aliens so as to get out of paying taxes and getting subsidies. The big corporate “farms’ should not be the only ones to get the subsidies. Either all farms should be subsided or none should. The government war on family framers and small business must be overcome.
5 posted on 09/03/2012 6:49:10 AM PDT by mountainlion (Live well for those that did not make it back.)
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To: apoliticalone

Why are today’s kids so spoiled they won’t accept this as a stepping stone job? It surely is not ignoble.


6 posted on 09/03/2012 6:51:33 AM PDT by HiTech RedNeck (let me ABOs run loose, lew (or is that lou?))
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To: DeaconBenjamin

I don’t think you folks are reading this completely prior to posting your comments. For the most part, they did have wage and hour documents. The government challenged the validity of them based upon their stupid unbased assumptions.

The farmers were paying correctly.

I’ve run into this in wage and hour audits with L&I on piece rate work. They assume everyone is lazy and can’t make rate!


7 posted on 09/03/2012 6:54:56 AM PDT by tired&retired
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To: tired&retired

If you follow the calculations, Labor & Industry was stating that the piece rates or pounds picked were too high for one person and thus were dividing them in half based upon their assumption that two workers were on one ticket. If half of the production X the rate per pound did not make minimum wage the employer was hit with an assessment.

60 lbs per hour X .28 = $16.80 per hour.

If you divided that in half 30 X .28 = $8.40 and thus the employer must pay a pickup amount on the original and imaginary employee.

$16.80 is not a bad hourly rate for unskilled farm labor.


8 posted on 09/03/2012 7:02:18 AM PDT by tired&retired
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To: muawiyah

Better than that. Just pay flat hourly rate and make them earn less.

Problem solved.


9 posted on 09/03/2012 7:02:23 AM PDT by Usagi_yo
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To: DeaconBenjamin
...said the signed consent judgments may limit his clients' appeal options.

Is an agreement signed under duress enforceable?

10 posted on 09/03/2012 7:02:28 AM PDT by sima_yi ( Reporting live from the far North)
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To: tired&retired

Sorry, I remembered the rate at .28 when it was .33 per pound.

60 x .33 = $19.80 per hour


11 posted on 09/03/2012 7:04:32 AM PDT by tired&retired
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To: sima_yi

It’s dodgy whenever dealing with the FEDS because whether it is or not is entirely up to the agency, until it reaches the federal circuit.

My thoughts are: How did it get this far? It would have taken all but a day to get relief.


12 posted on 09/03/2012 7:09:02 AM PDT by Usagi_yo
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To: tired&retired

The IRS agents make similar assumptions in their audits and hold people at financial gunpoint.

I had an IRS agent press for criminal fraud for unrecorded gross receipts against several clients years ago by taking the pounds of flour purchased and multiplying by his recipe of pounds of flour per pizza based upon menu price to find unrecorded gross receipts.

I took seven cases to Federal Tax Count and walked in with two pizza boxes taped shut to show why they were wrong. They used a thin crust pizza recipe and my client made Sicilian pizzas. Their assumption cost my clients over $50,000 just to prove they were right.


13 posted on 09/03/2012 7:11:20 AM PDT by tired&retired
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To: apoliticalone
...need to use mechanized pickers or pay a wage that Americans will accept.

From the article:

A worker picking two buckets an hour, for example, approximately 28 pounds, would earn the equivalent of $9.24 an hour. Farmers and others say the best pickers can earn $30 an hour or more.

14 posted on 09/03/2012 7:20:58 AM PDT by SunTzuWu
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To: tired&retired

By getting too greedy the Feeb ended up with nothing. Had only one pizza maker been targeted the cost of defending would have been prohibitive, but when several could combine their cases, they could afford to prevail.

Why the stupid matter wasn’t solved with a letter to the IRS about pizza recipes (and copies of menus) is another issue. The IRS ought to have been charged with frivolous prosecution.


15 posted on 09/03/2012 7:29:56 AM PDT by HiTech RedNeck (let me ABOs run loose, lew (or is that lou?))
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To: SunTzuWu

If a farmer can’t get a legal worker (a high school kid or an adult) to work in their fields, then they need to either raise the wages, or start using mechanized pickers. That’s the way a real free market should work.

But in no way should the cost of their savings in labor by using cheap labor performed by immigrants (illegal and other) be passed onto taxpayers, which is what happens. I’ll pay more for blueberries if they are picked in a way that doesn’t cost me in taxes. Actually I won’t because I have 9 blueberry bushes that I pick myself.

In today’s corrupt crony political environment the USA labor market is distorted whereby politicians turn a blind eye to illegals, or bring in a steady stream of other immigrants that give profits for a few, but cost society billions in costs of welfare etc by usurping the free market.


16 posted on 09/03/2012 7:38:19 AM PDT by apoliticalone (Honest govt. that operates in the interest of US sovereignty and the people, not global $$$)
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To: DeaconBenjamin; bray

Bray - FYI in case you haven’t seen this.


17 posted on 09/03/2012 7:40:32 AM PDT by Seattle Conservative (God Bless and protect our troops)
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To: apoliticalone

We’re assuming it’s mostly illegales there.

In a competent Federal oversight they wouldn’t be quibbling about star berry pickers. They’d want to know if the workers were legals or not.


18 posted on 09/03/2012 7:41:28 AM PDT by HiTech RedNeck (let me ABOs run loose, lew (or is that lou?))
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To: apoliticalone

Distortion of the free market happens because of subsidies to some and the costs passed on to others. Politicians taking care of constituencies bends free market rules. We need to end all the giveaways to business, corporations and individuals that gives us distortions and redistribution of wealth.


19 posted on 09/03/2012 7:44:40 AM PDT by apoliticalone (Honest govt. that operates in the interest of US sovereignty and the people, not global $$$)
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To: apoliticalone

The point here is the government used extortion to force a private company to pay a fee and sign an admission of guilt with their only other option being to let their crop spoil and go out of business.

I am sure if the workers were dues paying union members there would be no problem. All of the workers would then make the same amount and there would be no incentive for any to work faster to make more money than the slower pickers. The cost increases would either be passes on as the market allowed or your blue berries will be from China or South America. Another bit of our job base forced overseas by fascism and unions.


20 posted on 09/03/2012 8:08:03 AM PDT by resistance (abandon all hope and rational thought, become a democrat)
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To: HiTech RedNeck

“The IRS ought to have been charged with frivolous prosecution.”

This is the norm. They take unreasonable positions and the punishment is that you must defend against them. The system is the punishment.

I have another IRS audit underway right now. I showed the agent all of the errors in her work and agreed to disagree on the unbased assumptions creating assessments. It is very much a system where they make accusations and you must prove them wrong. You are NOT innocent until proven guilty. My client is between a rock and a hard place!

I’ll admit, I do end up with the nightmare cases after other CPAs have screwed them up. These are not returns I have prepared. I’ve even filed amended returns after the audit case was closed and paid, just to have the audit reopened and get my clients their money back. As long as the statute of limitations has not expired they are still open game.

I’m trying desperately to retire and get out of this work, but feel sorry for these people and keep getting sucked back into it.


21 posted on 09/03/2012 8:14:54 AM PDT by tired&retired
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To: apoliticalone

“But in no way should the cost of their savings in labor by using cheap labor performed by immigrants (illegal and other) be passed onto taxpayers, which is what happens. I’ll pay more for blueberries if they are picked in a way that doesn’t cost me in taxes. “

Do you shop at Walmart?


22 posted on 09/03/2012 8:16:59 AM PDT by tired&retired
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To: DeaconBenjamin

Even though they are expensive, buy the mechanical pickers. They are cheaper than being extorted by the Labor Dept. goons who can put you out of business.

Of course, that means the human pickers will be going on welfare, but this government wants as many people dependent on Big Government as possible.


23 posted on 09/03/2012 8:16:59 AM PDT by txrefugee
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To: resistance; apoliticalone; DeaconBenjamin
The point here is the government used extortion to force a private company to pay a fee and sign an admission of guilt with their only other option being to let their crop spoil and go out of business.

At least somebody gets it, here. It's just one step down from government employees torturing a confession from a citizen for the benefit of their fellow Marxists.

24 posted on 09/03/2012 8:29:23 AM PDT by Navy Patriot (Join the Democrats, it's not Fascism when WE do it, and the Constitution and law mean what WE say.)
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To: resistance

“The point here is the government used extortion to force a private company to pay a fee and sign an admission of guilt with their only other option being to let their crop spoil and go out of business.”
.....................................

I understand what you are saying about this case, but I believe the core of this issue is bigger than this case. It is about businesses and farmers that have historically used immigrants (that we all end up subsidizing) so they can get artificially cheap labor instead of using mechanization.

Both Parties have never seen an immigrant (sometimes illegal too)that saved business interests money that they didn’t support. They don’t care that the associated costs end up being paid by society.

Cheap labor always ends up with other costs to society. As an example go back to the days when farmers in the south imported slaves so they could save money. They saved money but it ended up costing Americans with a civil war etc..

The policy continues today but has expanded beyond farmers.

https://www.numbersusa.com/content/issues/taxpayer-burden.html


25 posted on 09/03/2012 8:43:03 AM PDT by apoliticalone (Honest govt. that operates in the interest of US sovereignty and the people, not global $$$)
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To: DeaconBenjamin

Greg Ditchen, the farm owner, said he’s never been in trouble before and may use only mechanized harvesters in the future.

“It’s not the labor,” he said, “it’s the people who come out and tell us we’re doing wrong.”


So in the future to avoid these heavy-handed tactics Farmers will be employing no “migrant labor”.

Where I currently live, the only “short-term labor I see farmers hiring is for the tobacco crops, which are by their nature very labor intensive.

On the other hand most of the other farmers which are predominantly Amish only use Family labor and machinery. And by family I don’t mean just their own children I mean Brothers and Cousins etc. If an “English” is hired it’s because they are well known to the farmer and are very trustworthy.


26 posted on 09/03/2012 8:59:31 AM PDT by The Working Man
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To: tired&retired
I had an IRS agent press for criminal fraud for unrecorded gross receipts against several clients years ago by taking the pounds of flour purchased and multiplying by his recipe of pounds of flour per pizza based upon menu price to find unrecorded gross receipts.

I took seven cases to Federal Tax Count and walked in with two pizza boxes taped shut to show why they were wrong. They used a thin crust pizza recipe and my client made Sicilian pizzas. Their assumption cost my clients over $50,000 just to prove they were right. Your logic does not follow. The agent calculated the amount of flour on the (client's) recipe. You claim the pizza is thin crust. So what? And what's with taping the pizza box shut? Showmanship. Where is the argument?

27 posted on 09/03/2012 9:05:01 AM PDT by LoneRangerMassachusetts (The meek shall not inherit the Earth)
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To: HiTech RedNeck

“Why are today’s kids so spoiled they won’t accept this as a stepping stone job? It surely is not ignoble.”

Here in NJ illegals are stealing jobs the employers don’t want to pay Americans (kids or adults) to do. Americans require such things as workers compensation insurance, overtime pay, and lunch breaks that just get in the way...


28 posted on 09/03/2012 9:52:51 AM PDT by kearnyirish2 (Affirmative action is economic war against white males (and therefore white families).)
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To: apoliticalone

“If a farmer can’t get a legal worker (a high school kid or an adult) to work in their fields, then they need to either raise the wages, or start using mechanized pickers.”

That’s right; instead, companies do an end-run around “the market”. Any American earning over $30K has forces at work either sending their job overseas or importing immigrants (legal or otherwise) to do it. That is the stark reality facing the American middle class today, and it won’t be improving any time soon. The best hope for the American worker is a nuclear war between India and China and a conventional war between Mexico and the Philippines; nothing against those people, but that’s the truth.


29 posted on 09/03/2012 9:58:53 AM PDT by kearnyirish2 (Affirmative action is economic war against white males (and therefore white families).)
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To: LoneRangerMassachusetts

My case was similar to the one in the article sourcing this post. The government used an assumed formula and based upon that formula they calculated an expected production per hour and used that to determine a rate per hour per employee worked. They compared that to the recorded figures to assess deficiency.

In my case, the government used an assumed formula (recipe) and utilizing quantity of one ingredient in the recipe, they multiplied it through to calculate projected gross receipts and then compared it to recorded receipts to determine a deficiency. Problem is, they used a thin crust recipe which yields a higher revenue per pound of flour used than a Sicilian pizza. While the price of the Sicilian pie is slightly higher, it is not proportionately higher based upon flour differential. I handed the four U S Treasury attorneys the two boxes taped shut so they would notice the weight differential and ask why. The experience spoke for itself and is better than just logically explaining it. Such graphic illustrations speak volumes when you are trying to convince other people, especially juries that you are correct and the opposition is wrong.

I’ve been doing this for over thirty years, quite successfully even where others have failed.

The problem is that the judicial system protects itself and its underlings. I have a tax case in state court right now that is absolutely absurd and it has already been rejected by two inter department revenue hearing boards who just rubber stamped their revenue officers despite the evidence presented. The last hearing board voted against me 3:2 and the hearing board had no idea what they were doing. They didn’t even know their own laws. I will easily win in appeal but it will cost $$$ to get there. This is the reason many attorneys will wave district court cases to county court and refer to the lower level courts as Mickey Mouse Courts.

It is getting harder to get a fair shake in the bureaucratic process. The system is the punishment. I watch the little guys get stomped on and abused constantly. It’s sad.


30 posted on 09/03/2012 1:06:33 PM PDT by tired&retired
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To: kearnyirish2

A close friend of mine employs students in an academic training agricultural environment. The students are through a program at a major university. Last week I complimented him on the fine work ethic I observed in his student employees, most whom are visiting from the Eastern European Countries.

He said that was true five years ago, but not today. It used to be they would want all the overtime they could get. Today they don’t want to work over forty hrs per week, and often complain that they don’t want to work more than 25 hrs or they will lose their food stamps! The last three years has poisoned a lot of workers.


31 posted on 09/03/2012 1:13:31 PM PDT by tired&retired
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To: tired&retired

Perhaps your most virtuous move would be in lending a hand to raising up a successor to take up the cudgel against IRS weirdness like that. At least tax courts are available now and they usually come to sensible conclusions. But the IRS plays games hoping the target will find it too burdensome to appear in a tax court.


32 posted on 09/03/2012 2:42:41 PM PDT by HiTech RedNeck (let me ABOs run loose, lew (or is that lou?))
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To: tired&retired

The answer will have to include politics. This is federal taxes being discussed, or state taxes? The appropriate legislatures will need to be engaged.


33 posted on 09/03/2012 2:47:43 PM PDT by HiTech RedNeck (let me ABOs run loose, lew (or is that lou?))
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To: HiTech RedNeck

“But the IRS plays games hoping the target will find it too burdensome to appear in a tax court.”

Very True......


34 posted on 09/03/2012 6:00:48 PM PDT by tired&retired
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To: tired&retired

“The last three years has poisoned a lot of workers.”

Particularly young ones; if all of the products hawked on TV (as well as homes and families) are beyond their reach anyway, what is the point? I’m sure this is speeding up the demographic nightmare that has been unfolding in this country for the past decades.

I just hope there are enough voters that miss the whole concept of “discretionary income” enough to toss Obama.


35 posted on 09/03/2012 7:52:38 PM PDT by kearnyirish2 (Affirmative action is economic war against white males (and therefore white families).)
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To: kearnyirish2

Agree completely. It is time to focus on issues that will create a more prosperous USA that has a real economic base that provides jobs where they can send their kids to college and serve as assets to society instead of liabilities. We need much more in our USA economy than bankers, Wall St financiers and Wal-Mart. The expansion of both have been more negative than a positive for our long term mainstream economy.

Massive immigration that can not assimilate (legal and other) has hurt the creation of a stronger economy. It is pushed by elites of both Parties, and is intended to keep American wages depressed, change our culture and overpopulate the country.


36 posted on 09/04/2012 8:49:47 AM PDT by apoliticalone (Honest govt. that operates in the interest of US sovereignty and the people, not global $$$)
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To: apoliticalone

“It is pushed by elites of both Parties, and is intended to keep American wages depressed, change our culture and overpopulate the country.”

I agree with everything except the overpopulate bit; while at this point it is obvious that we don’t need the immigration (due to the high unemployment), the fact is that Social Security and other programs don’t work unless the “contributing” population is growing (either naturally or as we’re seeing with the open borders). Western Europe is watching the socialist utopias collapse because the contributing segment of the population has probably already been eclipsed by the “takers”. They import immigrants, but the costs to businesses of the current batch of “takers” makes hiring them impractical (similar to what is happening here).


37 posted on 09/04/2012 8:31:13 PM PDT by kearnyirish2 (Affirmative action is economic war against white males (and therefore white families).)
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