Post by unlawflcombatnt on Feb 16, 2008 20:36:13 GMT -6
(Originally from 7/10/06)
Illegal Immigration Suppresses Wages in 3 Ways.
1. Illegal immigrants, as a whole, are willing to work for less. As a result, employers pay them less than they would pay American workers for the same jobs. In order for Americans to work at the same job, they must accept lower wages than they would have otherwise, in order to remain "competitive" with the illegal immigrants who've replaced them.
2. Illegal immigrants increase the labor force size, thus increasing the "supply" of labor. Increasing the supply of labor has the same effect as increasing the supply of any consumer good. It reduces the "price" of labor, which means it reduces wages. Illegal immigrants are currently employed in 7 million of America's 143 million jobs. There are a total of 150 million workers considered to be "participating" in our labor force. The subtraction of the 7 million illegal workers would reduce this number to 143 million participating workers. The effect of such a "supply" reduction would be to increase the "price" of labor by basic supply & demand effect. Again, the increase in "price" of labor equates to an increase in wages.
3. As a result of the above 2 wage-suppressing effects, illegal immigration suppresses total aggregate labor income. Labor economist George Borjas puts the annual wage suppression at 4%, or $1700/worker. Multiplying that $1700/worker loss times 143 million workers gives a total loss of $243 billion dollars annually. That reduces potential consumer spending by $243 billion/year. The reduction in consumer spending reduces demand for production, and the demand for workers to provide that production. The result of this reduced demand for labor is a further reduction in wages.
Just 1 of the above 3 would reduce wages by itself. All 3 together suppress wages even further. Again, the Borjas estimate of wage suppression from the immigration that occurred between 1980 and 2000 is $1700/worker/year, or 4% per year.
Borjas's study can be found at Immigration & Wages
Illegal Immigration Suppresses Wages in 3 Ways.
1. Illegal immigrants, as a whole, are willing to work for less. As a result, employers pay them less than they would pay American workers for the same jobs. In order for Americans to work at the same job, they must accept lower wages than they would have otherwise, in order to remain "competitive" with the illegal immigrants who've replaced them.
2. Illegal immigrants increase the labor force size, thus increasing the "supply" of labor. Increasing the supply of labor has the same effect as increasing the supply of any consumer good. It reduces the "price" of labor, which means it reduces wages. Illegal immigrants are currently employed in 7 million of America's 143 million jobs. There are a total of 150 million workers considered to be "participating" in our labor force. The subtraction of the 7 million illegal workers would reduce this number to 143 million participating workers. The effect of such a "supply" reduction would be to increase the "price" of labor by basic supply & demand effect. Again, the increase in "price" of labor equates to an increase in wages.
3. As a result of the above 2 wage-suppressing effects, illegal immigration suppresses total aggregate labor income. Labor economist George Borjas puts the annual wage suppression at 4%, or $1700/worker. Multiplying that $1700/worker loss times 143 million workers gives a total loss of $243 billion dollars annually. That reduces potential consumer spending by $243 billion/year. The reduction in consumer spending reduces demand for production, and the demand for workers to provide that production. The result of this reduced demand for labor is a further reduction in wages.
Just 1 of the above 3 would reduce wages by itself. All 3 together suppress wages even further. Again, the Borjas estimate of wage suppression from the immigration that occurred between 1980 and 2000 is $1700/worker/year, or 4% per year.
Borjas's study can be found at Immigration & Wages