As you know, I am generally a fan of Matt Yglesias. He is a very smart and prolific guy, but sometimes his lack of actual real world experience catches up with him. This post on illegal immigration in which he tries to argue that undocumented workers have little negative effect on the wages of the workers with whom they compete is one such instance. (Ezra is quite wrong about this too.)
How do I know that I am right and Yglesias is wrong?: Well, perhaps because I live in the actual world of people who work with their hands for a living (Matt probably knows a waiter or two) and I have seen the incredible damage that those who employ and exploit illegal immigrants have done to the labor markets in which my clients operate. In those areas of the construction market in which undocumented immigrants from Mexico and Central America form a substantial amount of the available work force -- brick laying, tile setting, drywall installation, cement finishing, pipe insulating, and some aspects of carpentry and iron working -- wages barely increased during the incredible construction boom of the late 1990s through 2007. My clients struggled to obtain even cost of living type increases despite full employment and in some instances, labor shortages. Now that the construction market has gone bust, the massive presence of this easily exploitable work force is just destroying the market for labor in these craft areas. In the past year, I have negotiated wages cuts of $2, $4, and $12 -- yes, $12 -- an hour for various groups with whom I work. And no, none of these guys was getting rich to begin with -- they had wage and benefit packages of between $28 and $32 an hour, enough to put about $21--26 an hour in their pockets and to have decent health coverage and modest pensions.
In these trades, if you could secure 2,000 hours of work a year (not always easy in weather sensitive trades), you would make $40,000 to $52,000 a year -- a bit better if you could secure some decent overtime. (Overtime at time and a half is generally paid for more than eight hours a day or Saturday work, with double time on Sundays and holidays.) So essentially one could have a modestly middle class lifestyle with these wages and benefits, assuming you could find reasonably priced housing, which can be a challenge here.
Employers using undocumented workers in these trades are typically paying them from $10 to $16 an hour and treating them (illegally) as independent contractors. In other words, no benefits, no tax withholding, no Social Security, no workers' compensation, no unemployment insurance, and, of course, no overtime. (And yes, I've brought lawsuits on behalf of such workers and seen this up close and personal as well.)
This is where you find yourself offering employers an $8 an hour wage cut, with an additional $4 cut off of the fringe benefits (leaving a subpar health plan and crappy pension benefits) and the employers telling you it is not enough.
Basically, these labor markets have been destroyed by unscrupulous employers and a work force that is cowed into submission by its illegal status. (A similar thing has happened in the meat packing industry.) As a result, the prospects for a decent standard of living derived from these trades is rapidly receding.
I am somewhat reticent about writing this sort of thing, because I never want to be identified with nativism or any hateful attack on immigrant labor. I understand that these guys (and they are all men) are just trying to better themselves and their families. They are not trying to harm anyone and I will never play the Lou Dobbs role and paint them as the enemy. My clients continue to try to organize them, but they are a difficult group, particularly given the fact that the U.S. Supreme Court has stripped them of any labor law rights. (I am very much in favor of immigration reform to try and ameliorate this problem.)
But please, don't tell me that they are not bringing down wages for other workers. It's just not so.
