Our Dear Illegals and the Economy

I've decided to be brave a post a series of three essays written about illegal immigration, one a day for the next three days. I'll be curious to see people's reactions. =)

What effect does illegal immigration have on the US economy especially in places of high concentration?

Let the invasion begin. Whether or not the citizens of the United States would like to admit it, illegal immigrants from the brother American nation-states are essential to the economy as we know it today, despite their negative effects. Though Mexican and other Latino immigrants comprise only fifty percent of illegal immigrants in the country, they are of the most interest because of their importance and ubiquity. In order to analyze the status quo, California and Florida will represent the overall economic functioning of the “shadow economy.”

Halcyon Southern California is teeming with illegal immigrants. Here the primary function of the shadow economy is to provide a cheap source of easily controllable labor to the agricultural sector. Because of the ability to provide sub-standard wages, agricultural businesses tend to hire the illegal workers as opposed to legal workers which cost a good deal more and also have the ability to unionize after the example of César Chávez. This drives down the cost of produce, shifting the supply curve, and lowering the price of food. In the economy of Southern California, illegal immigrants are the substitute good which drives down the demand for legal labor, while the supply stays constant. This lowers the equilibrium price for legal labor. However, despite allegations that “those Mexicans are taking Americans jobs,” the truth of the matter is that very few “real” Americans would be willing to take those jobs, especially with the alternative of welfare and other “Big Brother” governmental programs which help to strangle the jobs market. Nevertheless, illegal workers do have some access to social services such as health care, which drains these programs, causing a drive towards higher taxes. While some think that taxing the illegal immigrants as well is the solution (though I am totally at a loss as to how they plan to do this), because of the low income they receive from the market, illegal immigrants would not be able to pay the taxes into the system anyways. Furthermore, due to their low wages, illegal immigrant families cannot invest in human capital and the low prices of everything associated with them (wages, food prices, etc…) constantly works to slow the velocity of the economy: both these aspects serve to damage the future of the economy. So while illegal immigrants are crucial to the functioning of the economy as we know it, the effects of the shadow economy are negative upon the economic health of this country.

Very similar observations can be made in Southern Florida. In contrast to Southern California, where the illegal workforce is primarily agricultural, the shadow economy on Gasparilla Island near Fort Myers is concerned with construction. Whenever a hurricane sweeps through, the previously non-existent Hispanic sallies forth from their previously unknown magical forest to get businesses and homes running again quickly and cheaply. They also provide a cheap source of labor for remodeling and landscaping. However, illegal labor is balanced out with “real” American labor by a rather ingenious system of only hiring the illegal workers during the summer when all the tenants have returned to Manhattan. During the winter when the island is heavily populated, only white American citizens do landscaping. While this system does provide a way to protect one’s house cheaply without insurance (since the great probability of damage drive the price of insurance up past the cost of entirely rebuilding the house), again the drain on the economy by the use of various social services and the loss of economic velocity is still present, and if America would like to remedy the situation, a very drastic restructuring of the socioeconomic system must occur.

Positive economics informs us that illegal labor is a drain on the economy, yet it is essential for the system of the status quo to remain the same. So the American public must now look to normative economics to find a way out of this quandary; the answer still eludes our grasp,