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Cristina Gaeta

2000 Research

Abstract: The Bracero Program: An Economic Analysis On the Effects Guestworker Programs Have on Wages

Mentor: Dr. Grant D. Forsyth, Economics

The purpose behind this research is to explore the structure and impact of the original Bracero Agreement (1942-1964) and to evaluate the possibility of implementing an extended program into our current economy. The Bracero Program, a contracted labor program that brought Mexican labor into the U.S. to aid with labor shortages, can be viewed from both an international and national view. By examining some of the microeconomics aspects of the program it is easy to recognize potential benefits and costs associated with a migrant labor program. A few issues revealed when imposing a foreign program are the effects it will have on domestic workers, farmers and consumers. An increase in the supply of labor may affect those already working. By increasing the supply of labor, wages may decrease and domestic workers may be displaced by cheaper foreign labor. By having easy access to cheaper labor, farmers will find it easier to increase their profits while maintaining or increasing their input. Not only are farmers benefiting from foreign labor, but so are consumers. The cost savings to farmers are passed on to consumers in the form of stable or falling food prices (in real times).

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