David Is Right, If I Understand Him Correctly

@Bryan,
"David, do we have a meeting of the minds?"
On point #2, completely.
On point #1, almost. If you change your statement, "A narrow segment of illegal workers would lose in the short-run from legalization," by adding the words "their jobs" after "lose," then I agree. There is more to life than jobs. I think almost any worker would accept amnesty even if meant he would lose his job in the short run. Overall he would gain.

But would a low-wage illegal immigrant accept "guest worker" legalization if it meant he would lose his job but not be eligible for tax-funded subsidies ("social spending," "unemployment," "SSI," etc.)?

Earlier in this exchange between Caplan and Henderson I posted links to sober studies showing that the 1986 amnesty recipients raised their wages on average but reduced their labor force participation, arguably because they became eligible for tax-funded subsidies, and that the subsidies amnesty recipients actually did collect were very costly to other taxpayers because the amnesty recipients collected (and likely continue to collect) more in welfare payments than they paid (and likely continue to pay) in taxes!

There's more to life than jobs, yes, especially if you anticipate some other source of support.

But that small group who are well below the minimum wage could lose their jobs

@Eli,
I answered your question.