For decades, the US has benefited from a flexible, low-cost undocumented labor force that performs essential jobs domestic workers avoid. Both political parties have implicitly allowed this system to thrive because it is economically advantageous, creating a class of workers that is documented for profit but not for legal status.
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When ICE raids removed hundreds of undocumented workers from Swift & Co. meatpacking plants, the company faced a crippling labor crisis. Its solution was to aggressively recruit a new, legally authorized, but equally vulnerable workforce: refugees fleeing war and persecution.
Beyond its long-term growth benefits, rational immigration policy can be a powerful short-term tool against inflation. By addressing labor shortages in critical sectors like construction, agriculture, and elder care, an increased and targeted immigrant workforce can directly reduce cost pressures on essential goods and services.
Contrary to common political narratives, undocumented immigrants are often a net positive for government finances. They are heavily documented for tax purposes (e.g., Social Security) and pay into these systems but are less likely to draw benefits, effectively subsidizing programs for citizens and creating a highly profitable workforce.
Wage stagnation is not accidental but a result of two concurrent policies. By sending manufacturing jobs overseas and simultaneously bringing in low-wage labor, corporations create a market where domestic workers lose nearly all leverage to demand higher pay for remaining jobs.
America intentionally avoided solving illegal immigration because it serves a crucial economic purpose: providing a flexible, cheap labor force that doesn't draw on social safety nets. This benefits industries and consumers while placing little burden on the state.
In a true market economy, labor shortages are impossible; wages would simply rise to attract workers. The argument that a country needs low-skilled immigrants to fill jobs is often a way to artificially suppress wages for the domestic working class, preventing market forces from correcting the balance.
Restricting immigration halts a key source of labor for essential sectors like agriculture and construction. This drives up consumer costs and could cut GDP by 4-7%, creating a direct path to higher inflation and slower economic growth.
Immigration policy must account for economic incentives. Unlike in the past, modern welfare states make immigration an economically rational choice for survival, not just opportunity. This shifts the dynamic, attracting individuals based on benefits rather than a desire to contribute without a safety net.
The restaurant industry, historically reliant on undocumented immigrants, faces a severe labor shortage due to tighter immigration. This has shrunk the pool of experienced cooks, causing the value of remaining documented workers to skyrocket. Wages now average nearly double the local minimum wage.
Current ICE raids are expensive ($100k per deportation) and seen as brutal. An alternative is to target the economic incentive by levying escalating fines on businesses hiring undocumented workers. This could disrupt the job market for illegal immigration more effectively, cheaply, and humanely.
