Illegal Immigration, Minimum Wage Law, and Morality

Illegal immigration shows “how bad laws make socially advantageous acts illegal, and therefore, leads to an undermining of morality in general,” says Milton Friedman at the end of this video:

Friedman makes a good point. I’m not fully convinced of everything he’s advocating in this video, but he’s certainly right about how immigration is a good thing: Immigrants come to America to find jobs that would benefit their own situation and employers give jobs to people who are willing to work for their business at an agreed upon wage (be it above or below minimum wage). What makes us gasp at the idea of paying someone below minimum wage is because the evil being done is not an intrinsic evil. It’s a functional evil: not following the arbitrary law of the land that you live in.

I use the term “arbitrary” because politicians decide what is considered a “living wage” necessary to help poor people. Despite the fact that this leads to larger unemployment numbers, especially among young, unskilled workers and minorities, there still is no way to know what any given person’s living wage is. The standard and cost of living in New York City is much different than the standard and cost of living in the American Heartland.

For a great explanation of minimum wage law, its adverse effects, and how it relates to how the free market determines wages, watch this:

So we can come to understand that minimum wage law affects how the illegal immigration market works. If the natural market wage for an illegal immigration is $6/hr, and the minimum wage law is $7.25, then the moment that the minimum wage law is reduced to $5.50, employers will lose the incentive to hire illegal immigrants over legal immigrations. If this were to happen, then we would see a type of natural deportation. Illegal immigrants would realize that if they can’t work for less than $5.50, because it doesn’t better their situation, they might try to work elsewhere (like in countries that have artificially higher minimum wage rates).

As Freidman points out, prior to 1914, the U.S. had no restrictions on immigration. If you showed up on U.S. soil, you were in immigrant! No paperwork, no long lines, no invisible government to put up with, and no fees to pay that go to growing the government system. This is what Friedman and pro-capitalists would like to see. After all, immigration to America was always seen as a good thing for the economy prior to 1914.

So why has it changed? Why have pro-capitalists soured to the idea of immigration? There are a number of possible reasons why: We’re trying to rationalize and cope with the fact that we do have a big welfare state; some pro-capitalists are fooled into thinking the big welfare state is a good thing; perhaps we’re concerned with assimilation issues. Whatever the options may be, we should keep in mind that immigration is not intrinsically wrong. We’re all trying to better our economic situation for ourselves and our family.

  • Anonymous
    Not quite true. In California, before 1892, and in the rest of the U.S. thereafter, it was illegal for Chinese to immigrate to the U.S. Immigration has both racist and protectionist roots, though the protectionist impulse is strongest. Use of the state to award protection from competition, or to award privilege, is to make the law a farce, as Bastiat taught long ago.
  • Сергей

    Strange logic about immigrants leaving because the law reduces minimum wage to $5,50 per hour! Will the author be able to find Americans to replace the immigrants in their jobs at that wage rate? Minimum wage law is just a marking stone or whatever you call it. And just a minimum mark at that! It has nothing to do with illegal immigrants! It’s about what should be paid to Americans! When there are no Americans found to replace immigrants at $5,50 employers will start offering $6,50 or more to them!

  • Caleb .

    Nice argumentum ad absurdum at the end of the second vid, there. Problem is, worldwide, we have situations where employers engage in wage fixing, forcing everyone around to accept a pitiful wage that they can only survive on if their children go to work instead of school, making it impossible to climb that economic ladder you’re so fond of.

    If the minimum wage were eliminated, yes, you’d find Americans willing to work for $2.50 an hour…why? Because if they don’t take it, they’ll die. Or they can just fall on social programs like welfare, but then we’ve made a problem into a bigger problem. Lower national wage means less taxes, so those social programs won’t be able to hold up the vast influx of poverty-stricken Americans.

    Good read, though.

  • ChristieHansen

    Ok if you are an Illegal Immigrant worker who works for 5.50 and hour, is it tax free for them? Well yes, yes it is. So they actually work dollar for dollar. However even if you make minimum wage as a citizen at 6.50, with the 22% tax rate, you are actually bringing home less then what the Illegal worker is bringing home. So how do you determine who is actually getting screwed over here?

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