Asking Paul Craig Roberts: Does illegal immigration drive down wages?

The noted economist also shares his views about the DREAM Act and mass immigration's financial impact on our nation. Photo: Immigration reform march

FLORIDA, May 27, 2013 — Some believe that America needs mass immigration now more than ever. They say that such a thing will reinvigorate our economy’s service sector. What can be said about this view?

The DREAM Act has become a highly contentious issue, especially due to its benefits for college-enrolled illegal aliens. If passed, how might it ultimately impact the United States’s white collar economy?

Is there any evidence to suggest that illegal immigration has a negative impact on wage rates?Paul Craig Roberts doesn’t engage in groupthink. As an assistant Treasury Secretary under President Ronald Reagan, he played a key role in formulating the Gipper’s now-legendary fiscal policy. As a journalist, he made no bones about reporting the facts as he saw them. Now, as a columnist, he shares his opinions about America’s turbulent sociopolitical climate.

Most pundits talk a good game about economics and politics. Few, however, are prepared to deliver anything beyond a superficial analysis of our time’s most controversial issues. Agree or disagree with Roberts, his ideas are genuine, and they are his own.

In this first part of our discussion, he answers the questions mentioned above.

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Joseph F. Cotto: Some believe that America needs mass immigration now more than ever. They say that such a thing will reinvigorate our economy’s service sector. Do you have an opinion on this view?

Dr. Paul Craig Roberts: This argument is absurd. At a time when Americans cannot find employment and are dropping out of the labor force discouraged, immigration can only worsen the situation.

Cotto: The DREAM Act has become a highly contentious issue, especially due to its benefits for college-enrolled illegal aliens. If passed, how do you think that it would ultimately impact the United States’s white collar economy? 

Dr. Roberts: The US white-collar economy has been shrinking for some years due to jobs offshoring and H-1B visas. 

The various versions of the immigration bill are trying to normalize a fait accompli. Illegal immigration has been tolerated for so long that illegals now have squatters’ rights in U.S. citizenship. Evicting them is no longer an option. Illegals are a consequence of the failure of previous policy. All of the Western countries face the situation in which immigrants, both legal and illegal, are a rising percentage of the population, 

Cotto: Have you found any evidence to suggest that illegal immigration has a negative impact on wage rates? 

Dr. Roberts: I have not looked for evidence, but a number of people have and have found it. For most economists, it is self-evident. Economists believe in supply and demand. If the supply increases, the price falls. Illegal immigration is an obvious reason why the real value of the minimum wage continues to fall. Ron Unz has made a compelling argument that the low value of the US minimum wage is a main cause of illegal immigration.

Americans cannot get by on a minimum wage income, but illegals from much poorer countries who can get by on more spartan diets and live many to a room can. Unz suggests that raising the U.S. minimum wage to $12 an hour could halt illegal immigration, because the low level jobs would be taken by Americans. Without illegal immigration, the minimum wage would have been raised in order to provide a labor supply. So, the low minimum wage stimulates illegal immigration and illegal immigration keeps the minimum wage low.

Libertarians oppose any increase in the minimum wage with the argument that it causes unemployment. However, the minimum wage, which in nominal terms, has been eroded by inflation, and we have the situation where a wage too low to live on causes unemployment for U.S. citizens.


Far-left? Far-right? Get realRead more from “The Conscience of a Realist” by Joseph F. Cotto 


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Joseph Cotto

Joseph F. Cotto is a social journalist by trade and student of history by lifestyle choice. He hails from central Florida, writing about political, economic, and social issues of the day. In the past, he was a contributor to Blogcritics Magazine, among other publications. He is currently at work on a book about American society.

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