Immigration and wages

A core immigration restrictionist argument, made by both academics (George Borjas being a major example) and politicians alike, is that undocumented immigrants drive down the wages of low wage legal workers in the United States.  By extension, then, policies like auditing companies should have the effect of driving out illegal workers and thereby increasing wages.

As this Wall Street Journal story notes, such policies are having the exact opposite effect.  The Obama administration has been raiding companies like crazy (2,393 companies in the past fiscal year, the highest ever) and this is depressing wages further.

Shortly after, Alba and Eugenio, who declined to have their surname published, landed at a small janitorial concern, scrubbing car dealerships for about half the pay, without benefits. Earlier this year that employer, too, was hit by an immigration audit. In late February, Alba and Eugenio were let go.

The purpose is to encourage those companies to start hiring legal workers, but that has not been the result:

Many employers say the administration is depriving them of foreign workers who do jobs Americans refuse, even during an economic downturn, without proposing immigration reform that would supply a stable, legal labor force.

"All the audits do is keep employers in certain industries awake at night, while driving immigrants into work environments and arrangements that are indefensible," said Bill Blazar, a senior vice president of the Minnesota Chamber of Commerce.

Instead, everyone at the low wage level is getting less.