Illegal Immigrants and the U.S. Economy

Dennis Prager has written an insightful article explaining why, contrary to popular perception, illegal immigrants have not actually taken jobs away from most Americans. America's economy, Prager demonstrates, has been so strong that regardless of immigration numbers, virtually anyone searching for a job will eventually find one. This essay is not a blanket support of illegal immigration (Prager worries about properly assimilating them and recommends building a fence between the U.S. and Mexico), but it raises some excellent points that should allay certain economic fears.

On a similar note, I'd like to refute another common misperception - the belief that illegals are necessary to perform certain jobs that Americans refuse to do. Quite simply, it's not true. Illegals indeed comprise a large percentage of workers in relatively menial fields such as housecleaning, construction, farmwork, and (NY mayor Michael Bloomberg's favorite) golf course maintenance. But they occupy these jobs not because Americans flat-out refuse such positons, but because Americans refuse such positions at current wage rates.

This is a highly important distinction. The problem with housekeeping is not that we Americans consider the work beneath us; it's that the work generally pays less than $10/hour. If cleaning homes paid, say, $50/hour, we'd be lining up to do it by the thousands.

For many illegals, however, $10/hour is a large sum compared to salaries back home. These people hence certainly don't mind (and are often quite thrilled at the prospect of) working such jobs. The presence of so many illegals in these low-wage positions is not evidence that Americans have lost their work ethic, but rather a function of basic economics.

So what would happen if the illegals weren't here? Americans would, of course, perform these jobs, but the wage rate would rise to meet their higher salary demands. This in turn would drive employers to compensate at first through cost-cutting measures (primarily layoffs and outsourcing), but later through innovation and increased productivity. Reducing illegal immigration, then, will likely hurt our economy in the short run, but greatly help it long term.

Comments

[Matt S]

Hey there Solid, I find much to agree with here. Regarding the last bit, you are right that rising wages do inspire new efficiencies long-term, at least anecdotally. Restricting a free market for labor is a bit too artificial and potentially damaging, though, as a path to achieve that.

I would prefer to see that happen more naturally, which is to say that Mexican incomes rise to the point that they are not so incredibly cheaper that their US counterparts. We can get there by continuing to advance free trade -- and seriously enforcing the border laws we already have.

[Solid Surfer]

Hi Matt,

Totally agree with you. Just today, Jonah Goldberg over at National Review actually wrote a great piece on this exact topic...I think you'd enjoy reading it if you haven't seen it already: http://www.nationalreview.com/goldberg/goldberg200604120721.asp

[verdant]

Hi Surfer,

I really have never subscribed to the, "if we build it they will come" theory. No one has been able to discover how to build a basketball as we know it, except by hand. Same with a football. Same with raking the traps on a golf course. Simply because labor rates rise does not mean we will have more efficient golf courses. Instead, it will mean that we will have less golfers and less golf courses, and be poorer, as a people, because of this result.

Basic economics teaches us that the world is better off with free trade. True, individuals can be hurt if trade barriers are removed, but, on the average, we as human beings will, on the average, be better off. This is the case irrespective of the relative superior or inferior population skills of the respective trading partners.

The free movement of labor is an important ingredient of free trade. Barriers to the free movement of labor reduce the living standards for Americans, on the average, as well the rest of the world.

Therefore, the only reason to place restrictions on the free movement of labor is for security reasons. Other reasons, such as using labor strictures to "prop" up labor rates are tantamount to restricting imports to "prop" up commodity or finished goods prices. Such ideas are antediluvian but are nontheless regurgitated by "experts" who subscribe to the mythical "free lunch" belief.

So, let's do the right thing....lets minimize the restrictions on labor (and goods) to whatever degree is possible so long as such freedoms to not contravene our security needs.

[Solid Surfer]

Hi Verdant,

I agree with you that free trade (in both good and labor) is great, but I'm only talking about restricting illegal immigration, not legal immigration. If people want to come to the U.S. to work, it's fantastic, as long as it's legal and the person isn't a security risk.

That said, I do think immigrating here legally is a much too difficult process, and if the law were changed to make it easier (once again, only for people who aren't a security risk), illegal immigration would go way down.

Back to your main premise, though - higher labor rates can indeed ultimately benefit golf courses. Let's say, as you mentioned, that illegals levae the country and the salary rate goes way up for the people who rake sand traps on golf courses. So what happens? The golf course owner won't want to hire anyone to do it at such a high rate, so he'll look for other ways to do it, say, by purchasing an electronic raking machine. This will save him money in the long run, which he can then use to improve the golf course in other ways and/or hire new workers to do some other jobs at the course. In the long run, the golfers playing at the club will benefit.