Economists points out that the strong inflow of undocumented workers to some extent reflects the increasing scarcity of domestic unskilled labor in the United States.
12% of the native born U.S workforce has less than a high school diploma today compared to about 50% in 1960.
That scarcity has created significant employment opportunities for unskilled illegal immigrants.
Illegal workers make up roughly 24% of all agricultural workers, 17% of all cleaning workers, 14% of construction workers and 12% of food preparers.
Many americans fear that illegal immigrants and their families depress wage rates in these and other already low-wage U.S occupations and also burden American citizens through their use of public services such as emergency medical care and public schools.
There are two extremely different views on immigration.
Some suggest that the employment of illegal workers decreases the employment of legal workers on a one for one basis
Supposedly, every job taken by an illegal worker deprives a legal resident of that job. That’s when the economy has only a fixed number of jobs at any time.
At the other extreme is the claim that illegal workers accept only work that legal residents will not perform.
Both views are misleading
( there’s a chart on page 412 that needs to be viewed for powerpoint presentation)
Chart illustrates a market for unskilled field workers in agriculture. The downsloping curve D is the labor demand curve for field workers. The unsloping supply curve Sd is the labor supply of domestic-born workers, while curve St reflects the combined total supply of domestic born workers and illegal immigrants. The horizontal distances between St and Sd at the various wage rates measure the number of illegal immigrants offering their labor services at those wage rates.
With illegal workers present, the equilibrium wage and level of unemployment in this labor market are Wt and Qt.
The low employment of domestic-born workers presumably is caused by their better wage opportunities and working conditions in alternative occupations or by the availability of government transfer payments.
The critical point is that the willingness of americans to work at any particular job depends significantly on the wage rate being paid.
Compensating wage differences : differences in the wages received by workers in different jobs to compensate for nonmonetary difference in the jobs.
A sufficiently high compensating wage differential will attract U.S workers even to otherwise undesirable work.
The opposite argument, that illegal workers reduce the employment of americans by an amount equal to the employment of illegal workers, is also misleading.
Generally, illegal immigration causes some substitution of illegal workers for domestic workers for domestic workers, but the amount of displacement is less than the total employment of the illegal workers.
Large flows of illegal workers into specific low-wage labor markets reduce wage rates in those markets.
Some U.S wages including those of field laborers, food preparers, and house cleaners are lower than otherwise because of illegal immigration.
The overall effect of illegal immigration on the average wage rate in the economy is either a smaller decline or even positive.
Some illegal workers are complimentary inputs to domestic-born workers, not substitutes.
A perfect example of this complementarity would be illegal fruit pickers and the domestic born drivers who deliver the fruit to grocery stores. The lower price of the fruit increases the amount of fruit demanded and thus the amount of it that needs to be delivered. That increases the labor demand for the complimentary truck drivers, whose wage rate rise.
Only where illegal workers and legal workers are substitute resources will the increase in labor supply reduce the wages of other workers.
Ironically, studies show that the largest negative impact of illegal immigrants is on