We need illegal immigrants Full Employment – Illegal immigrants do not affect Employment

I just finished four hours of Fed Chairman Bernanke‘s testimony before the House banking committee. Obviously the initial remarks were, everything is fine, illegal immigration is the key to our future. Out of the entire discussion I did pick up one point of interest there is a discrepancy regarding unemployment figures, the effects of illegal immigration on employment and wage pressures. The President of the United States, republican politicians and corporate organizations continue to offend the American worker by stating that illegal immigrants do jobs that Americans will not do.

I am an American. I have had many jobs over the years. I cannot really think of many jobs that I would not do to be gainfully employed. I have even heard business organizations stating that they are offering 35$ an hour for landscapers and cannot find employees. That is $72,000 a year, or double the median wage in the US. Obviously, the organization did not offer any way to contact the organization for the “jobs that Americans were unwilling to do”. Recently I have been interested in a career change so I have responded to a few ads. I found the automatic response from the prospective employer quite interesting: “Given the overwhelming volume of responses that we receive we will not be able to respond personally to each applicant.”

It should be noted that these are highly technical jobs requiring both education and experience. Well, I guess that eliminates corporate America’s “concern regarding the unavailability of qualified employees.” This also leads me to believe that the government’s unemployment data are just wrong. It would not be possible to have “overwhelming” volume of applicants if less than 5% of the working population were unemployed. I am also reminded of the recent opening of the Toyota plant in Texas. The company received over 100,000 applications for 1,500 positions. Add to this the widely publicized Valentine’s Day Massacre where Ford announced it will be firing 10,000 workers and it is only natural to ask,

“If jobs are so plentiful, the labor is restricted, and corporate America’s primary concern is sourcing employees to keep America competitive, why would laying off 10,000 people be a problem. Surely these highly qualified workers will be immediately absorbed in a labor market where unemployment is considered non-existent.”

I found interesting two responses by Mr. Bernanke regarding employment and illegal immigration. The first was in response to a question about full employment. Just for the record full employment would indicate wage inflation. Mr. Bernanke stated that the data did not suggest that the economy was at full employment and that while there have been some gains in overall compensation real wages were still under pressure. Translated this means that there are more people willing to work than there are jobs and that wages decrease to arrive at equilibrium. The second response was a leading question to say that illegal immigrants do not affect the labor pool. Mr. Bernanke simply responded that while illegal immigrants are an important part of available labor their effect on total labor is insignificant.

Now this is where I have a problem. Government data indicates that we have 12 million illegal immigrants in the US however extrapolating the data we can assume that there are well over 24 million illegal immigrants. More importantly these individuals have 2 or 3 jobs. This means that in the best case illegal immigrants represent 5% of the available jobs. In the worse case they could represent 8% x 2 jobs or 16% of total employment. Either one of these numbers, or anything in the middle, cannot be considered insignificant.

We have serious problems in the US. We need to understand the depth of the problem to be able to find a clear and successful path to make America better for our children. “Misleading” the American people only pushes the problem out a bit into the future. Reality cannot be denied. As more and more American citizens are unable to meet their financial obligations the discontent will continue to rise. The more the government “misleads” these same people, the greater the frustration they feel and eventually will revert to more drastic forms of protest.