Questing for Atlantis

One of the common arguments you hear being made by people about why we need stronger enforcement of immigration laws is that illegal immigrants steal jobs from Americans. We see this argument being made even more now, usually with the addition of “when unemployment is this high, there’s no way there aren’t Americans eager to do these jobs.”

Like many anti-immigrant arguments, this one feels good intuitively, but it doesn’t logically hold up.

First, consider the issue. Everyone agrees that the method by which illegal immigrants “steal” jobs is by doing the same or better work for less pay and minimal to no benefits. But is this really theft? I have trouble thinking the people who say it is really believe it, or they’d also be complaining about automated assembly lines stealing jobs from auto workers, modern farm equipment stealing jobs from farm laborers, and SUVs stealing jobs from horse breeders. Beating the competition by offering the same service at lower cost is one of the fundamental methods of capitalist competition.

Second, consider the latter claim, that if illegals weren’t doing these jobs, Americans would be doing them, particularly when unemployment is as high as it is right now. People might think this is true, but simply saying it doesn’t make it so. As Mark Perry notes:

Michigan had the highest unemployment rate in the nation at 14.1 percent in March, and the ranks of the state’s unemployed total more than 682,000. The last time the March jobless rate in Michigan was that high was 27 years ago in 1983, when it reached 16.1 percent.

So you would think it would be easy to hire seasonal workers in Michigan for industries like landscaping, right? Well, you would be wrong this year, because unemployed Michiganders are getting unemployment benefits for up to 99 weeks due to all of the federal jobless benefits extensions, and those benefits are creating disincentives for some of the unemployed to go back to work. Here’s the way the math works:

Landscape workers can earn about $12 per hour in Michigan and would make $480 per week before taxes working full-time, or about $350 per week after taxes. In addition, full-time landscape workers would face transportation costs and other work-related expenses. But collecting unemployment benefits and working zero hours per week, many of those unemployed workers can receive $255 per week tax-free for almost two years, which is only $95 less per week than if they worked full-time. For some workers who are getting the maximum of $387 per week in jobless benefits, they can receive even more from collecting benefits than they would get paid going back to work full-time.

I think this ought to be proof enough that there is no real chance of Americans doing the work currently done by illegal immigrants. As much as people may complain about illegal immigrants supposedly getting welfare, the real leeches are American citizens, who are able to earn enough off of government entitlement programs that it makes no sense for them to work the jobs being done by illegal immigrants.

However, even if the above weren’t true, keeping illegal immigrants from working wouldn’t do anything to fix our employment problems.

As I’ve already noted, everyone agrees illegals get work because they accept less pay and get minimal, if any, benefits. The obvious match to this is that Americans will not work at that level of compensation or they cannot because of minimum wage laws. Now, as anyone who has ever had any money could tell you, if one thing costs $1 and another costs $5, you can buy a lot more of the $1 item than you can of the $5 item. Therefore if businesses hire Americans instead of illegal immigrants fewer people will get hired, which makes this unlikely to fix employment woes.

It gets worse though. It’s also widely agreed upon that illegal immigrants work in low-skill activities like construction and landscaping. This means that the advanced skillset most Americans are presumed to have is not likely to make them any more productive in these environments. So if businesses are hiring Americans to do what illegal immigrants did before, not only will they be hiring fewer employees, those employees are going to be, at best, equally productive (and probably less productive since the job’s returns have less marginal value to a citizen than to an illegal immigrant).

End result of only hiring American citizens? Fewer employees that are no more productive than the old employees. And if you’ve got that then it is necessarily true that the employer is doing less business and the economy is that much weaker for it. In the big picture, that’s likely to increase unemployment far more than hiring illegal immigrants does.

So, to round up, the claim that illegals steal jobs that Americans would do is mistaken. Illegal immigrants are not stealing jobs, they’re just out-competing the competition; even if they weren’t in the picture, Americans still would be unlikely to do the jobs due to entitlement programs; and were all businesses to exclusively hire American citizens it would likely increase unemployment by reducing overall economic productivity.