After writing my previous post on the power of consumers to affect political events, as well as sharing my perspective in casual conversations, I have received a great deal of pushback to my last point: specifically, my beliefs that the American economy is dependent on an exploitative form of labor (i.e. the tragically underpaid and under-regulated labor of undocumented immigrants), and that Americans with the privilege of federal status are both benefitting from and willingly perpetuating an unjust economic system.
One counter-argument I hear frequently is that ‘illegal immigrants are taking American jobs’ and that, rather than being the beneficiaries of exploitation, Americans are somehow quite generously tolerating immigrants who harm our economy, and that we’d all be better off if undocumented workers were suddenly and completely removed from the labor force.
The second rebuttal I hear frequently is from people who agree that undocumented workers DO play a vital and ‘helpful’ role in our economy, and in fact that they ARE being exploited, but who somehow fail to take the leap from this position to the reality that if every undocumented worker were to receive the same legal protections as American citizens, that this sudden shift would cause turbulence to the economy.
In other words, they simultaneously acknowledge and then minimize the level of contribution undocumented workers are making, in what I believe to be a cognitive dissociation designed (however subconsciously) to protect themselves from feeling guilt / taking responsibility for just how much exploitation we’ve all been perpetuating and benefitting from for decades.
Given these two arguments, I decided to do a bit of research and then more fully articulate my position. It does seem on the surface of things that countering one of these arguments would necessarily lead me to concede defeat on the other argument. So which is it? Are illegal immigrants taking American jobs? Or do illegal immigrants play a minimal role in the economy?
Let’s first look at this chart compiled by the Pew Research Center in 2017, which describes the industries and occupations most highly comprised of immigrants (both undocumented and lawful):
I do have several questions about these statistics, including:
- How accurately was the Pew Center able to count the number of ‘unauthorized’ immigrants, given that few people readily admit to employing (or being!) undocumented laborers?
- How many of the ‘lawful immigrants’ are actually unauthorized people using fake social security numbers, a notoriously common practice that employers frequently turn a blind eye towards?
- How many of the ‘lawful immigrants’ are employed via the notoriously problematic / exploitative ‘Seasonal Guest Worker’ program?
(Don’t believe me that this ‘legal’ program is exploitative? Check out this article by the Southern Poverty Law Center calling the program ‘close to slavery’.)
In spite of the impact the answers to my questions could have on the data, Pew Research is probably the most accurate and non-partisan data I can reasonably hope to find, so let’s just take these numbers at face value.
After getting a sense of the industries most likely to employ immigrants, I looked up unemployment rates according to the Bureau of Labor Statistics. In case it’s not clear, these unemployment numbers are calculated based on the population of fully documented American workers.
Unemployment numbers as of November 2017:
Overall unemployment across all sectors = 3.9%
Less likely to employ undocumented workers:
Professional & Business Services = 4.0%
Information = 5.2%
Wholesale & Retail Trade = 4.2%
Vs.
More likely to employ undocumented workers:
Construction = 5.0%
Manufacturing = 2.6%
Family Workers* = 3.2%
*I’m assuming this corresponds to Pew’s “Private Household Workers”
This is obviously just a small sample of all possible industries, but I think it demonstrates the overall trend, which is that unemployment rates among the industries most likely to employ undocumented workers is comparable, and occasionally slightly BETTER, than sectors unlikely to employ undocumented labor. In other words, ‘illegal immigrants’ are NOT ‘taking American jobs’ en masse.
Does that, then, lead to the conclusion that undocumented labor has a minimal impact on the economy, and by extension that losing access to this labor would cause little or no turbulance?
Let’s pull this apart in three sections:
- Essential spending (food, clothing, shelter)
- Discretionary spending (restaurants, hospitality)
- Domestic assistance
Anyone who has ever run a business larger than a solopreneurship knows that payroll is inevitably the largest expense your business is likely to incur.
According to the Economic Policy Institute, “the average annual earnings of the almost 300,000 FLC [farm labor contractor] employees [in California] were less than $10,000, suggesting just under $10 an hour for 1,000 hours of work.”
Keep in mind that this is just under $10 an hour for physically demanding labor performed in the hot sun and often exposed to dust, pesticides and other health hazards – only paid seasonally to people who do not have access to unemployment benefits.
You might be tempted to believe that, should undocumented workers suddenly receive legal status, this would result in farms simply having to give their newly documented employees a $1/hour raise to meet California’s current $11/hour minimum wage, but consider that these same employees would now be eligible for any and all mainstream jobs which often pay more than minimum wage, and which offer year-round employment.
If someone had the choice to, say, make $12 an hour as a cashier at Target, and to keep that job year round, what would you have to pay them to perform physically demanding labor in a job that lasted less than half the year, and to spend the rest of the year unemployed? $20 an hour? $30?
Something tells me that even among the so-called ‘unskilled’ labor force (a term I strongly dislike, but let’s roll with it to make a point here), the price for filling the most challenging agricultural jobs would be steep – not only in terms of an increase in hourly wages, but also in terms of meeting safe labor practices, paying unemployment insurance, and so on.
Apply these same principles to all industries related to essential spending: food, housing, clothing. Let’s over-optimistically assume that business owners in these sectors on average incur 20% higher payroll expenses, and that they pass these higher expenses on to consumers (as they always do).
Examine your budget – are you personally prepared to pay 20% higher prices for everything you can’t live without? Even if 20% higher costs for life’s essentials don’t completely sink you, I imagine they’re going to take a significant bite out of your discretionary budget (say, eating in restaurants, or taking a long weekend out of town)…
And that’s a shame, because costs in those sectors are going to rise significantly, too, when restaurants can no longer employ undocumented dishwashers and hotels can no longer employ undocumented cleaning staff. Just at the time when these businesses would need to raise prices to accommodate higher operating costs, they will also face a general population with less money to spend on the luxuries they offer – the likely result being that many businesses will simply be unable to stay open.
And more likely than not, it will be the smaller, locally owned businesses with a narrower profit margin which will close faster than larger chains – meaning less money recirculating through the local economy, creating a compounding effect.
Consider also that the Pew data is averaged across the United States. The number of undocumented workers in any business in, say, San Diego is going to be significantly higher than the number of undocumented workers employed by a similar business in Lincoln, Nebraska – meaning industries in cities where the cost of living is already statistically higher will also face a greater impact both in terms of rising costs and collapsing businesses.
