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Originally Posted by mcsluggo
You are definitely wrong about the productivity side, productivity would rise: if you take away the lowest-wage workers you are taking away the least productive workers in the economy and the average productivity of workers will rise.
In a market equilibrium (where employers have to compete for workers AND workers have to compete for jobs-- ie no big surpluses or shortages of jobs) wages will equal the value of the marginal productivity of services they provide, so wages are low because the marginal value of the work provided by each individual worker is low. Hence illegals are not just the lowest PAID workers, they are the lowest VALUE workers as well, when considered individually.
However, taken together the TOTAL value of the work accomplished may be very great. So what happens when you take away a large proportion of the menial laborers, who taken as a whole perform many necessary functions in the economy? Do those activities no longer get accomplished (no trash pick-up, no brush clearing, no painting, etc…)? No, of course not. Without a reliable pool of cheap cheap workers, early on firms might pull back on the level of services provided (the doom and gloom scenario --nobody picks up the trash--) but this means that the VALUE of those services increases, which will attract more capital to those industries which will push up the productivity of the workers that are still in those industries, and wages will increase. (AND, that capital is attracted AWAY from those industries where it is having the least impact… ie from industries where it will have the least impact on labor productivity to have a little bit less investment)
Productivity of the economy on the whole (as measured by the average productivity of labor) increases.
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what leads you to believe that the "lowest wage workers" will not be replaced? there remains the demand for these manuel labor jobs, and they will be filled, albeit by workers at a higher per unit cost.
so nothing is going to be "tak[en] away".
these are jobs that have no true job skills other than physical health. with no substantial requirements/barriers to entry of the worker, the pool of workers is incredibly vast.
they are just not motivated.
the factor that suggests a decrease in productivity is simple. the workers who will be employed as laborers lack the work ethic the immigrants have.