Illegal Immigrants: Harmful or Helpful?

As I read through Rise and Decline I was struck by how an influx of labor in an already densely populated country like the United States grew faster after the increase in labor than before. I was immensely puzzled by this statement so I decided to do some thinking (yes I needed Tylenol) and some research. One argument I could find for letting illegals work in the US is that they help correct for the inflated price of labor by the controlling labor unions. Illegal immigrant labor provides competition to a labor market that normally gets what they want in terms of wages. By competing against labor unions illegal immigrants help bring the market price for labor back towards equilibrium.

As I researched more I found a lot of negative benefits to having illegal immigrants flock across the border. Among them is that each immigrant (not just illegal immigrants) costs tax payers about $9,000 a year. There is no doubt that illegal immigrants put a stress on our economy because they are not subject to the same economic laws that legal citizens are. My interpretation of Olsen's theory is that an influx of legal labor would be a good for an economy. An advantage to having illegal immigrants is that a truer price for labor would emerge.

Right now labor unions and minimum wage have distorted the true value of labor in this country. By having illegal immigrants work in this country they are not subject to any rules or regulations as to how they should be paid. This could help correct for government policies that create inefficiencies in the wages of workers. The costs of illegal immigrants as stated above must also be considered. Overall, I believe that Mancur Olsen was not necessarily speaking to illegal immigrants but towards there being a more competitive market for labor. More competition in the labor market would increase productivity, which is what I think Olsen was getting at.