Why We Should Stop Pretending that We Don’t Want Illegal Immigrants in This Country

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As an innovation manager, I regularly remind my clients that the most important part of the problem-solving process is to correctly define the very problem that they want to solve.

The sad reality is that many organizations—small and large, corporate and non-profit—fail to identify the root cause of their problems. Instead, they immediately focus on finding something—anything!— that may look like a solution.

To me, this is equivalent to taking Tylenol to relieve a headache even before knowing what caused it: hangover, mild cold, chronic migraine, or advanced glioblastoma.  

But if you ask me: “Who are the worst offenders of the ‘problem-first’ rule?”—my answer will be immediate: our politicians. Day in and day out, in multiple venues available to them, our elected representatives demonstrate a remarkable inability (unwillingness?) to define the problems they’re trying to solve in our name and on our money.

One of the glaring examples of this syndrome is the “problem” of illegal immigration. 

I don’t even want to repeat the horror stories you can hear these days about the mortal danger faced by our country from illegal immigrants. The topic has become so hot that it has reached the top of the most important issues of this year’s presidential election. 

Solutions to the problem proposed so far by our politicians don’t strike me as serious, but regardless of which type of solution you prefer—providing illegal immigrants with the path to naturalization or deporting them all—you’re likely to agree that our immigration system is broken.

Is it?

Legal Jobs for “Illegal People”

The truth is that our immigration system works exactly as it was designed—and it was designed to provide a steady flow of people who enter the country illegally.

Let me explain.

But first, let’s agree that most people entering the United States, whether legally or illegally, come here not to enjoy our freedoms, landscapes, historic sites, or food; they come here to work, to earn a living for themselves and their families.

Illegal immigrants, people who enter the country without proper documents, represent an essential—and irreplaceable—part of the US working force. Why? They take on jobs that few Americans would be willing to take due to low pay and poor working conditions. 

Here is a chart that presents the share of undocumented workers by industry:

Illegal immigrants they might be, but they do perfectly legit work here, eh?

But the best part of having these undocumented workers—and the reason why we want them here—is that they cost less than American citizens or legal immigrants. Illegal immigrants work, pay taxes, and spend money here, but they don’t receive benefits, like Social Security or disability pay, to which Americans or legal immigrants are entitled. 

Besides, undocumented workers have no legal rights. As a result, they don’t complain, don’t strike, and don’t ask for more lest they be exposed and potentially deported. Ideal, completely hassle-free employees! 

No other country in the world—I mean, among those that can be called civilized—has access to such a wonderful pool of cheap labor force. I would argue that illegal immigration represents a competitive advantage that the US economy maintains over the economies in Europe, Canada, Australia, and Japan.

Sounds too far-fetched? Here is what experts say.

In a paper published earlier this year, Wendy Edelberg and Tara Watson of Brookings Institution argue that the entry of new migrants into the U.S. in 2022-2023, a large part of them being undocumented, has ensured a healthy growth of the US economy even as the Fed sharply raised interest rates to bring down inflation. 

Indeed, in 2023, the U.S. was the fastest-growing G7 economy, and Edelberg and Watson insist that at least part of this surprising strength can be explained by the steady inflow of new workers from abroad, an economic stimulus largely unavailable to other G7 countries.

Other economists agree. According to the Morgan Stanley Chief US Economist Ellen Zentner, illegal immigration’s impact on the labor market was a “big positive for the economy” and a key factor behind the soft landing narrative. Zentner, too, believes that illegal immigration was the reason why, in 2023, the U.S. had such fast economic growth, while inflation and wage growth decelerated. 

So, far from poisoning the blood of our country and sucking up its limited resources—as some US politicians claim—illegal immigrants may well have saved us from recession.

Slaves, Postdocs, and NCAA Athletes

I’d further argue that using illegal immigrants to boost the growth of the American economy has its historic precedent: slavery.  

As pointed out by David Reynolds in his book “America, Empire of Liberty,” forced black labor was a powerful engine of the American economy, especially in the South, in the 17th and 18th centuries. Cheap and deprived of elementary rights, slaves helped alleviate a chronic labor shortage perennially plaguing the colonies since the very beginning.

Slavery is long gone, but the reliance on cheap labor lives on, with undocumented immigrants from Central and South America playing essentially the same role as their African predecessors centuries ago.

And if you look around, you can see shadows of slavery, understood as using pools of cheap workers as a means of creating economic value, in some quite unexpected corners of American life.

Take, for example, our science, indisputably the world’s best by any standard. True, we spend a lot of money on research, but what sets American science apart from other countries is our unique institute of postdocs.

Postdocs are scientists with freshly acquired PhDs who come to academic labs for what is euphemistically called “postdoctoral training.” But trust someone (me) who used to be a postdoc in his prior life: training is the last thing you get when “doing a postdoc.”

Postdocs work, and work hard; they’re true workhorses of American academic science, spending endless hours in the lab on weekdays, weekends, and holidays. And they deliver: while comprising less than 70% of non-faculty researchers in US universities, postdocs contribute to almost 90% of scientific publications coming out of these institutions. 

And what about postdoctoral pay? The US state that pays postdocs the highest salary, $67,000 per year, is Oregon; the lowest is Florida: $41,000 per year, which is $19.54 per hour (actually less, given the number of hours postdocs spend at work). Not much for someone who often graduated from a top school and then spent 5-7 years as a grad student, to get a PhD, the highest scientific qualification available in the U.S.

And if you wonder…Yes, you’ve guessed it right: international postdocs, who make up 57% of the country’s STEM postdoc population and who are shown to be more productive than US citizens and permanent residents, receive lower pay than the latter. 

What motivates postdocs? A hope for a bright future. They believe that by spending another 5-7 years in “postdoctoral training”—working hard and subsisting on a salary way lower than their real earning potential—they will secure a permanent academic position or a highly paid job in industry.

So let me repeat: it’s the institute of postdocs—highly qualified, motivated, and cheap workers—that provides American science with a competitive advantage that helps it maintain its leading status.

Or, take NCAA athletes. Remember that until 2021, the NCAA athletes were not compensated for their participation in national tournaments, and this is even though in 2021 alone, the NCAA generated $1.15 billion in revenue.

Like their postdoctoral brethren, NCAA athletes were motivated by a hope: that by kicking their asses and risking their health—for free!—they’ll get noticed by recruiters and be drafted by professional leagues, which will secure their financial well-being for the rest of their lives. In the meantime, the NCAA bosses were gobbling up billions. 

Sure, I understand the difference between slaves, illegal immigrants, postdocs, and NCAA athletes. However, I encourage you to see what they all have in common: they are parts of the unique to the United States system of exploiting pools of cheap (or free) labor to create economic value, and to provide the American economy with a competitive advantage.

A Simple Solution That No One Wants

Did you know that the existing immigration laws were written about 60 years ago and haven’t been seriously updated for the past 34 years? Doesn’t it strike you as odd that our elected representatives have spent decades doing nothing to fix the system they call “broken”?

And this is even though a simple solution to the problem has been lying in plain sight all along: to criminalize hiring illegal immigrants, to make it illegal to employ people without proof of work authorization.

(This approach that can be called “demand-side criminalization” is conceptually similar to the one used by some U.S. states (Nevada, for example) to curb prostitution. This is when, instead of going after sex workers, law enforcement was charging clients seeking their services.)

Do you think many employers would risk criminal prosecution for hiring illegal immigrants? Do you think that, facing a threat of such prosecution, they won’t find ways to check the legal status of their workers? You bet.

I also bet that such a simple solution will never be implemented, for our lawmakers perfectly understand that this would kill the golden goose of cheap labor our businesses enjoy.

For the same reason, I’m pretty sure that the idea of massive deportation of illegal immigrants won’t take off, either.

The latest stats show that there are about 11 million undocumented immigrants in the country. The logistics of such a monumental law enforcement operation are completely obscure, and the proponents of the idea don’t rush to explain to us how the illegals would be found, where they’d be sent, and which specific law enforcement agency (or agencies) will be in charge. 

Then, there is the stubborn topic of money. The best estimates suggest that each deportation would cost about $13,000 in current dollars. The total cost of the proposed deportation would thus amount to $143 billion. Who’s going to pay for that, using the favorite rhetorical question of this election season?

But most importantly, the experts are clear about the economic consequences of such a move. According to Adam Posen, the president of the Peterson Institute for International Economics (PIIE), the proposed mass deportation will result in a major depletion of the labor supply. Two things will happen then. First, shrunken labor typically means slower economic growth. Second, it would increase the price companies will have to pay to attract workers, which will cause inflation. (The PIIE experts project that the deportation of around 1.3 million undocumented workers could lead to a cumulative three-year increase of inflation by 1.3%.) A recession is likely to follow.

Are We Ready for a Solution?

Sometimes, the inability—or, to be more precise, the unwillingness—to properly define a problem is rooted in a painful realization that solving it would lead to consequences much worse than the problem itself.

This is how I see the problem of illegal immigration. We want to solve it, but we also want to keep illegal immigrants coming, no matter what we may say to each other in the heat of a political discourse.

That’s why I consider the problem of illegal immigration unsolvable, at least in the short term.

Sure, some palliatives could be implemented. For example, we must realize at last that the majority of people coming to this country are looking for a job rather than for a political asylum, as we tend to believe. We therefore should adjust the quota of immigration visas accordingly, giving more of them to the former and fewer to the latter (essentially following the pattern of Canada and Australia).

We can also lower the educational requirements for the people coming to the country on temporary working visas; not everyone needs a college degree to work in construction or hospitality.

But we should also remember that by giving legal rights, however limited, to people who used to be “illegal,” we’ll inevitably increase the cost of their labor. This will diminish their economic attractiveness to businesses and therefore deprive the American economy of a benefit it has become so addicted to.

Are we ready for that?