David R. Henderson  

Employers and Immigrants: Response to Bryan Caplan

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The Perks of Being Illegal... David Is Right, If I Understan...

In responding to my criticism of his post, Bryan quoted two sentences but left out the sentences that followed in the same paragraph. That omission matters. Bryan also subtly changed the subject.

First, the omission. Bryan writes:

David is right to point out heterogeneity:
"Bryan's evidence is that 'amnesty raises wages of formerly illegal workers.' That could be true on average but it's unlikely to be true in every case."
But "true in every case" is an awfully demanding standard. How about "true for a significant number of illegal workers in the U.S. workers over the course of a year"? If David can point to any sizable group of illegal workers who have spurned free green cards because it hurts their prospects in the labor market, I'll happily change my mind.

Bryan would be right to fault me for applying the demanding standard of his statement being true in every case. But here are the next sentences I wrote that he left out:
Specifically, if you're an illegal worker already earning above the minimum, as the majority of illegal workers probably do, then your wage can increase when you become legal. But notice that because you were already earning above the minimum, the employer's ability to pay you less than the minimum when you were illegal is irrelevant: your productivity caused him to pay more than the minimum. So illegality was not an advantage to you when you were illegal.

In other words, I had in mind a specific group of illegal workers who I think would have a reasonable probability of losing their jobs if there were amnesty. If they were just a little below the minimum wage, they could well be in good shape. But that small group who are well below the minimum wage could lose their jobs.

Second, Bryan has changed the subject. He writes:

If David can point to any sizable group of illegal workers who have spurned free green cards because it hurts their prospects in the labor market, I'll happily change my mind.

Of course I can't. Recall that the original discussion was about how employers would view illegal immigrants, not how immigrants would think or feel. Like Bryan, I can't imagine many people spurning green cards. But because his original claim was about employers, that's not the test. The test would be this: "Is it plausible that employers of illegal workers who are earning well below the minimum wage would be upset if those same workers got green cards?" I think it is.


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COMMENTS (5 to date)
Ken B writes:

I think we have seen examples of employers who chose to hire illegals in preference to legal workers. Kimba Wood comes to mind, and I recall news reports about some politicians and nannies. The rationale given was less hassle and paperwork. There was also the matter of not paying certain taxes.

David R. Henderson writes:

@Ken B,
I think we have seen examples of employers who chose to hire illegals in preference to legal workers.
Exactly. Moreover, Bryan knows this. His father was an example of such an employer.

Ken B writes:

@DRH: Interesting detail about Bryan's father! This reminds me of my curmudgeon test. I am at an age -- somehwere betwixt you and Bryan -- where I start noticing some of my friends forgetting their own life. One of my friends, talking about some policy or other, suggested it would lead to young people having less sex, "not a bad thing in my opinion" he added piously, proving he had quite forgotten being 20. I was even more dumbfounded by another friend supporting the Ontario government quasi-monopoly on beer sales.
(Where does this creeping puritanism come from?)

Bill S writes:

IMO, I still think there is something missing from this discussion. Due to the paperwork and record keeping involved, From an employer standpoint, I think the break even point in the illegal/legal divide is somewhere well north of the mandated minimum wage.

When I think of the undocumented workers that I see around here in the interior west (I think they are undocumented, but can't obviously be sure), many are day laborers in construction or landscaping. I think the market price for that labor may be well above the minimum, but at the same time well below the actual full compliance cost. Significantly enough below to risk hiring them.

Tom West writes:

Where does this creeping puritanism come from?

Rational self-interest?

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