Bryan Caplan  

The Perks of Being Illegal

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Illegality, Minimum Wages, and... Employers and Immigrants: Resp...
David makes a very strong case for the strange-to-me view that employers actually prefer illegal workers.  He's especially compelling when he notes:
[I]f you're an illegal worker earning less than the minimum, then when you become legal, your ability to credibly commit not to turn in the employer disappears. So the employer could well find it less beneficial to employ you.
My point, though, wasn't theoretical but empirical.  All the evidence I've seen tells me that illegal immigrants find it abnormally difficult to get steady jobs.  Yes, they can credibly promise not to narc on their employers.  (So credibly, in fact, that words are superfluous).  But illegal immigrants can't credibly promise that their employers can conveniently hire them without fear.

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.

P.S. David's analysis suggests an especially evil way to make sure the minimum wage hurts illegal workers.  So evil, in fact, that I wouldn't discuss it if I thought policy-makers might listen to me... 

Namely: Hand out green cards to illegal immigrants who turn in their employers for minimum wage violations.  This would obviously inspire many false accusations, but would make employers very reluctant to give illegal workers a chance - especially if there are harsh criminal penalties for minimum wage violations.



COMMENTS (4 to date)
Ghost of Christmas Past writes:

We have empirical data on the effects of amnesty for illegal aliens, because we did that in 1986:

Amnesty pushes legalized immigrants' wages up a bit, but pushes their labor participation rate down some, probably because they substitute welfare for work and they spend more time searching for work at their new higher reservation wages.

The newly legalized immigrants cost (other) taxpayers many billions because newly legalized low-wage immigrants promptly (and persistently) claim welfare payments in excess of the taxes they pay, on average. The availability of such subsidies probably pushes up newly legalized workers' reservation wages, contributing to their somewhat reduced participation, and to employers' recruitment of new illegal alien laborers (after the 1986 amnesty of about three million, some number north of ten million more illegals entered the US).

(Of course, open borders would "solve" the post-amnesty additional-illegal-immigration problem-- the additional immigrants would still come, but they wouldn't be illegal! They would, however, compete down wages for earlier immigrants and natives.)

You may not like the tone of the CIS piece linked above, but note that even a very recent pro-amnesty Cato paper agrees that the 1986 amnesty beneficiaries cost more in transfer payments than they pay in taxes.

Ghost of Christmas Past writes:

Re: green cards for reporting minimum-wage violations...

The US has done something like that a few times. Enslaved illegal-alien garment workers in Los Angeles were given green cards after they were liberated by police and had testified against their former captors.

Robinson writes:
Namely: Hand out green cards to illegal immigrants who turn in their employers for minimum wage violations. This would obviously inspire many false accusations, but would make employers very reluctant to give illegal workers a chance - especially if there are harsh criminal penalties for minimum wage violations.

That's exceptionally evil, but it could go even farther- why focus on minimum wage violations? Couldn't the government simply offer green cards to any illegal immigrants who reported that they were hired at all, and that their employer knew they were illegal or were negligent in checking? Wouldn't that provide an enormous incentive against any employer hiring illegal workers?

Peter writes:

"All the evidence I've seen tells me that illegal immigrants find it abnormally difficult to get steady jobs."

I think this depends on where they are (i.e. numbers) and their field of work. I have found illegal Europeans, often with a college degree, tend to have no problem finding steady work in the Midwest or North-East. Ditto in areas with small to moderate sized close-nit (but not large which encourages competition) ethnic communities; an illegal Serbian will get a job in Milwaukee no problem as will a Russian in Tampa Bay. I also found that it's pretty easy for an illegal female, regardless of age, to find steady employment.

My guess is "abnormally difficult to get steady jobs" means "Spanish speaking illegal males within 800 miles of the Mexican border or areas where Spanish can actually be heard regularly and has at least a 10% Latino population or whom primarily engage in manual or farm labor occupations" [or the like, ditto with lets say Chinese or Filipinos in Hawaii].

This is the REAL problem with the immigration debates, it's really just a euphemism for "North American Spanish speaking males of marginal economic value illegal residing in the USA".

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