Quote:
Originally Posted by FJUNO78
+10000000
this cheap labor does not necessarily translate to passed savings to the consumers... from what I see, it goes into the owners pocket.
the dude who owns the landscaping company my folks use drives a 911. He owns 2 houses. the man who owns the pizzeria buy me wears a $15000 brietling and has a jaguar. He just opened another place in NYC and is in the process of moving there. Both of them use illegals.
both of these owners own businesses that offer products or services that take zero or minimal skill to provide. Yet they are living in the upper 5% because they are beating the system.
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Sorry, but what someone drives or wears on their wrist is absolutely the wrong way to assess the effect of illegal immigration on prices. You cited landscaping, a non-tradeable good, where arbitrage is not feasible. In this case, immigration (both legal and illegal) increases the supply of workers, decreasing the price of unskilled labor, increasing the price of skilled labor. Why do your folks use this landscaping company? Are they cheaper? Or do they do a better job for the same amount as others (in effect, cheaper). Both instances increase both consumer and producer surplus. Your parents are getting the service they want for a price they agree on, and the producer is providing this service at a lower price to his customers and at a lower cost to him.
Edit: a previous post of mine with some emphasis relevant to this:
"The Effect of Low-Skilled Immigration on U.S. Prices: Evidence from CPI Data" by Patricia Cortes, University of Chicago
"
low-skilled immigration benefits the native population by decreasing the nontraded-
goods component of the cost of living. At current U.S. immigration levels,
a 10 percent
increase in the average city’s share of low-skilled immigrants in the labor force decreases the
price of immigrant-intensive services such as housekeeping and gardening by 2.1 percent, and
price of the average non-traded good (in terms of intensity in the use of low-skilled immigrants)
by 0.7 percent."
"The wage effects are sizeable but plausible: a 10 percent increase in the
number of low-skilled immigrants in a city reduces the wages of low-skilled natives by 1 percent
and of low-skilled immigrants by 8 percent (an own-labor demand elasticity of -1.2).
My results
imply that the low-skilled immigration wave of the 1990s increased the purchasing power of
high-skilled workers living in the 25 largest cities by an average of 0.6 percent and decreased the
purchasing power of native high school dropouts by an average of 1.3 percent. I conclude that,
through lower prices,
low-skilled immigration brings positive net benefits to the U.S. economy
as a whole, but generates a redistribution of wealth: it reduces the real income of low-skilled
natives and increases the real income of high-skilled natives."