Monday, May 01, 2006

Immigration, part 2

There is much discussion amongs those who are "pro-immigration" (note the lack of a qualifier), or as critics call them, "pro-amnesty", about our economy's reliance upon the cheap labor illegal immigrants provide. You constantly hear about how "illegal immigrants do jobs that Americans won't." This argument is simply idiotic. If, of a sudden, illegal immigrants vanished, American employers would replace labor with capital where possible and raise wages where necessary. This is not to say there would be zero impact in the dissapearance of cheap labor. People would have to pay more for their meals and mow their own lawns, etc. The economy would hit a snag. But life would go on. There are good arguments for amnesty, this is not one of them.

2 comments:

Mandingo said...

I heard a statistic today, on NPR, that 40% of all construction workers in the state of Texas are illegal immigrants. How does one "replace labor with capitol (sic)" in labor intensive occupations/industries--which most illegal immigrants work in anyways? They necessarily are long on labor and short on capital because the nature of the industry requires it. As another example, how does one replace line cooks, with "capitol (sic)"? Pray tell.

And don't you just love the (sic)? To me that's the biggest backhand anyone can give.

xtrachromosomeconservative said...

"replace labor with capitol (sic) where possible and raise wages where necessary". Cheap labor is cheap because it is unskilled. To the extent that you pay more for skilled labor you will be able to mitigate productivity losses. Ultimately, the reason employers don't do this is because the gains in productivity from higher wages are not sufficient to cover the difference in cost between skilled and unskilled labor. This would result in a lower profit margin for a period. But in terms of substituting capital, in construction you see lots of areas where this occurs, think of pouring concrete, you get a mixer and molds. Developers would figure out housing designs that are more capital intensive than labor intensive. But if your basic argument is that there are industry segments that are not profitable in the absence of cheap labor than that would indicate that the minimum wage is too high.