Via the National Economics Editorial.
Illegal Immigrants Lower Wages For US Citizens By Distorting The Labor Market
Let’s jump right into it.
How do illegal immigrants lower wages for American workers? Two ways:
I. More Illegal Immigrants Mean A Bigger Labor Supply
You’ve heard of the law of supply and demand? It’s a tool we use to help us understand how prices are determined in a free market.
All you need to know is that when demand goes up, prices go up (more people are bidding up the price); when supply goes up, prices go down (there’s lots to go around, so there’s no urgency); and vice versa.
This holds true when it comes to the prices of apples, oil, or a person’s labor—if there’s lots of workers who can do a job, then employers don’t have to pay as much to get a qualified employee; if there’s a shortage of workers, then employers have to pay more to hire someone. Simple.
America’s labor market has been flooded with illegal immigrants looking for work. This increases the supply of labor, which decreases the price employers must pay for workers (wages).
There’s no way around this logic: if you accept the law of supply and demand, then you must accept that illegal immigration decreases American wages.
End of story.
Of course, the facts bare this out.
You can see in the below graph how real wages (adjusted for inflation) for American workers have stagnated for quite some time. Part of this is due to offshoring (which basically does the same thing as illegal immigration, but on a bigger scale), but part of it’s due to illegal immigration.
II. Migrants Work Off The Books
Undocumented workers not only increase the labor supply, but they’re also off-the-books, meaning that they work for less than minimum wage, they don’t get benefits that citizen’s would get etc.
Basically, illegals undercut the labor market’s mandated floor, pulling the rug out from American workers—there’s no way a minimum wage worker can compete against someone working for $2 a day. It’s not going to happen.
Wages aside, employers like to hire illegals because they have leverage over them: if the illegal misbehaves they can fire them without recourse; they can force the illegal to work long hours or in unsafe conditions using the threat of deportation as their leverage etc.
Aside from the obvious moral problems here (I’ll get to those later), this makes it impossible for American citizens to compete with illegal immigrants for the same jobs.
This is why the black and youth unemployment rate is so high (because black, and young, Americans filled the labor market niche that illegals are now filling)—fast food places used to be operated by teenagers, now they’re stuffed with illegals.
Debunking The Economic “Benefits” Of Illegal Immigration
I’ve heard it all before: every leftist and libertarian (ironic bedfellows) who loves illegal immigration then starts harping on the same 2 points: either they’ll say that (I) illegals do jobs Americans don’t want to do, and therefore don’t impact wages, or (II) that the economic benefits outweigh the costs.
Claim I: “Illegal Immigrants Do Jobs Americans Don’t Want To Do”
This isn’t true. Why?
I. There are 23 million unemployed Americans right now. There are 11 million illegal immigrants—even if you deported every illegal and gave that job to an American, the unemployment rate would still be around 7% (the real unemployment rate, not the nonsense number the government spouts off).
II. Americans are willing to work the jobs illegals do, and they currently work them in states where there aren’t illegal immigrants. If you check out this document published by the Bureau of Labor Statistics, you’ll see that there are literally millions of Americans, white, black, and Hispanic, who are employed as janitors, laborers, store clerks—everything.
It’s simply not true that Americans won’t do these jobs—they can’t, because they’re being undercut by illegal immigrants. Meanwhile, millions of Americans are unemployed.
Believe it or not, but people in states without high levels of illegal immigration (for example, Montana or Ohio) can still afford McDonald’s and Starbucks—they just hire teenagers to do the jobs. The same goes for entire countries like Canada or the UK.
The entire economic argument in favor of illegal immigration is predicated upon the fact that there’s no way to fill the jobs without them—that’s just not true.
Unemployed teenagers, and black and Hispanic Americans would fill the job vacancies in California or Texas (just like they do in Pennsylvania or Indiana)—the reason they don’t right now is because they can’t compete with illegals (whom employers can underpay, overwork, and otherwise abuse with legal impunity).
Even without people to fill the voids, most of the jobs could be done by machines anyways (which, thankfully, don’t require government welfare checks). Funny that.
A final note on this point: there was a time before illegal immigration. How do you think the jobs got done before that? We hired teenagers and invested in better processes and technology to improve our efficiency.
Here’s a damning piece of evidence: the standard of living (in real terms), as measured by disposable income grew much more rapidly before we opened the immigration floodgates. In fact, it’s actually declined for most Americans.
Clearly all these illegal immigrants aren’t making us any richer.
Claim II: “The Benefits Outweigh The Costs”
This just isn’t true. Illegal immigration does more economic harm than good.
As I’ve already discussed, the massive drain on government resources, which leads to higher taxes, itself puts this claim on shaky ground—you can’t have illegal immigrants and low taxes, it just doesn’t work.
Likewise, the drain from remittances, while not massive in the grand scheme of things, is significant when you remember that most illegal immigrants are concentrated in a small number of states (California, Texas, New York, Florida, Arizona etc.).
There’s an opportunity cost associated with spending on illegal immigration.
For example, the American Society of Civil Engineers predicts that America’s infrastructure deficit (the money we need to spend to maintain our roads, ports etc.) will reach $3.6 trillion by 2020.
Given that the illegal population hasn’t changed too much since 2010 (and assuming it won’t change much until 2020), if we spent the money on infrastructure instead, we could’ve cut this deficit by nearly half—not to mention that something as mundane as traffic jams cost America $124 billion a year—good infrastructure is more economically valuable than illegal immigrants, by far.
I’d also like to point out that the USA is the only country in the Western world that imports millions of illegal immigrants to work in its service jobs—Canada, Japan, the UK are all getting by just fine without illegal immigration.
The whole thing is a scam by the elites to better their quality of life at the average American’s expense.
As you can see, Japan’s GDP per person growth actually outpaced America’s during the period of high illegal immigration, despite the fact that Japan didn’t have any of the “advantages” of illegal immigration, nor free trade, as a matter of fact.
The mainstream economic narrative just doesn’t mesh with the facts. It’s wrong.
I’ll tell you what: university professors, senators, news anchors aren’t losing their jobs to illegals. It’s guys who work construction. Gals who work in malls. Ordinary folk.
I can guarantee you that if all illegal immigrants were Pulitzer-winning writers and famous actors that the borders would be shut up tighter than the gated communities where Hollywood’s elites live.
So there you have it folks. Do with this information what you will, but please, stop pretending that illegal immigrants are an economic panacea. They’re not.