The True Facts on Illegal Immigrants
Body: This article shows how ridiculously bad for the economy it would be if all illegals were shipped home.

THE KAHUNA'S RANT O' THE WEEK: Be Careful What You Wish For -- By Tobin Smith

Well, WaveWatchers, I have a foolproof way to slow our economy immediately that most Americans appear to approve of: Just herd up and ship home all undocumented workers and fill those job openings with 11 million to 12 million legal citizens who are NOT currently working because these illegals have "taken their jobs."

I'm told that our Fox News audience is about 10-to-1 against illegals (America overall is only 8-to-1 against illegals). Apparently a FoxNews.com poll last week that asked if America's economy would be hurt if we cracked down on illegals reported 93% said NO (the economy would be fine).

Now, I do not want to confuse anyone with the facts, but here goes.

If you define "cracking down" as sending any and all illegal immigrants currently working in the U.S. back to where they came from, AND you define "cracking down" as an assumption that there are the same number of LEGAL citizens ready and willing to replace them, your grasp of the economics of employment in this country is shaky at best.

FACING THE FACTS

Let's go to the irrefutable (that's unarguable, for you and me) facts of the current U.S. economy.

The government estimates we have more than 142 million people employed in the U.S. who are 16 years of age and older.

Presently the GDP of U.S. economy is about 75% services. Let's imagine what would happen if 10% of the people employed in the services and construction industries -- 11 million to 12 million people -- contracted the plague and died.

If you define "crash" as a 2%-3% GDP annual growth rate turned into a 1%-2% GDP contraction, we would most definitely crash the economy with such a calamity.

Now, those who tell us that if we crackdown on illegal workers it won't crash the economy MUST assume that there are 11 million to 12 million LEGAL American citizens ready and willing to take jobs currently performed by the illegal immigrant labor force, AND that employers are willing to hire them (more on that in a second).

This pool of labor also must include the hidden pool of 3 million-plus unemployed legal Americans in skilled tile, roof, carpet, carpentry, brick, wallboard and other construction trades.

Now let us not dither on about the economic facts -- like, for instance, that there is skilled/unskilled citizen labor out there, but just not being hired.

Again, according to the latest labor statistics, there are 7.2 million unemployed in the U.S. For people with some college education, the unemployment rate is about 3%. For college graduates over 30, unemployment is less than 2% of the available workforce.

(Please, check the statistics for yourself at www.bls.gov

We only have 7.2 million unemployed people in the entire country. A majority of these unemployed are unskilled.

Now we have to replace 11 million to 12 million illegal workers if we "crackdown" on illegal undocumented workers. Where are we hiding the 5 million phantom workers?

But the really wrong assumption in this scenario is that there are 150,000 to 250,000 small businesses -- and thousands of large businesses -- that would rather hire this hidden pool of legal citizen talent who comprise this vast army of unskilled labor sitting idle and unused in America.

MY SURVEY SAYS ...

I recently polled more than 100 small-business owners in the construction trades on the following question:

"Assume you had a project or job where you made the same amount of profit hiring illegal Hispanic workers or unskilled legal workers for your projects -- who would you prefer to hire?"

More than 76% replied "Hispanic workers" -- legal or illegal -- and the reasons were because Hispanic laborers:

1) Show up on time
2) Work harder
3) Work longer -- more days and more hours
4) Deliver higher-quality outcomes than other workers

This is not my opinion -- this is the opinion of real, small-business people who do not have the luxury of living in the parallel universe that exists in Congress or the halls of the American labor movement.

The biggest weakness in the argument of the "let's crack down on illegals in this country and it won't harm our economy" crowd is this:

They assume that employers would rather hire from the 7.2 million native unemployed pool rather than the Hispanic labor pool REGARDLESS of pay rates.

One of the main reasons the 7.2 million unemployed ARE unemployed is that they simply are often outworked and outperformed by the illegal labor -- and often at lower wages.

That's a hard pill to swallow, but my research supports this premise.

REALITY CHECK

So, even if it were possible to remove almost 15% of our service workers and replace them with lazier, less-skilled labor, our economy would suffer from the hit of losing 10 million consumers -- at LEAST a 3%-4% hit to the GDP.

That would take our economy from 3% growth to 0% or -1% growth. In economic terms, that's a crash.

What the economically illiterate do not understand is that in an economy that is 75% service based -- i.e., more than 100 million of the 143 million jobs in the U.S. -- and you remove 11 million -12 million of the 100 million most-productive workers:

* Labor prices go up, creating real systemic inflation
* Service prices go up, which creates real cost-push inflation
* Interest rates go up because of inflation, and that kills the housing market

Which, in turn, kills the economy. This would bring a great recession that:

* Destroys good jobs and takes us to 7%-8% unemployment
* Kills home valuations, a la the 1989-1991 recession
* Does nothing to improve homeland defense

So be very, very careful what you wish for, America -- your prosperity lies in the balance.

It is an inescapable economic fact that, at the margin, there is a pool of 12 million or so hard-working laborers who fill the gap in our labor base for unskilled labor or skilled construction labor. We owe much of our growth to this incredibly valuable labor pool that 8-out-of-10 Americans wants to eliminate.

Remove that pool and watch prices explode when the reserve supply gets extremely low -- just like oil prices did.

Remove that labor pool and our economy loses one of its keys to our incredible prosperity.

PLEASE REPOST