Immigration, Wages, and the Cost of Living: An Inconvenient Economic Truth

By David Waldron Anderson

After my last guest column ran, I received a wide range of feedback, some supportive, some angry, and some accusing me of being a communist. I found that last charge particularly amusing. How many communists do you know who have started a bank?

That reaction, however, underscored why this conversation matters. Too often, we talk past each other on economic issues, substituting slogans for facts. Immigration is one of those issues.

Let me be clear at the outset. Immigration has long been a strength of the American economy. Legal and illegal immigration, in particular, has fueled growth, entrepreneurship, and innovation for generations. But ignoring the real economic effects of unchecked, large scale undocumented labor does a disservice to working Americans, especially those at the lower end of the wage scale.

Labor markets, like all markets, respond to supply and demand. When millions of undocumented workers enter the workforce willing, or forced, to work for less than prevailing wages, the result is predictable. Wages are pressured downward. This impact is felt most acutely by Americans already struggling to get ahead, including construction workers, hotel housekeepers, landscapers, food service employees, and all other hourly laborers.

In construction, where margins are tight and bids are competitive, wages decline when contractors rely on off the books labor. In hospitality, hotel workers making beds and cleaning rooms find themselves competing with a labor pool that has little leverage to demand fair pay or benefits. The result is not just lower wages, but fewer opportunities for advancement and greater job insecurity.

This wage pressure does not exist in a vacuum. When wages are depressed, affordability across an entire community suffers. Housing is the most obvious example. As more people compete for the same limited supply of houses and apartments, prices rise. When wages fail to keep pace, the affordability index is negative to working people. They are squeezed from both sides, earning less while paying more to live in their own communities.

Many people I know personally no longer have a housekeeper or yard worker, not because they do not value the work, but because those workers have either returned to their home countries or moved on in search of better opportunities elsewhere. That reality reflects a labor market in flux, shaped by policy decisions that ripple outward in ways we often fail to acknowledge.

None of this is an argument against immigrants themselves. It is an argument for coherence, enforcement, and fairness. A system that relies on vulnerable labor to keep wages artificially low is neither compassionate nor sustainable. It hurts American workers, exploits immigrants, and distorts local economies.

We can, and should, have an immigration system that is humane, legal, and economically rational. That means enforcing existing laws, expanding legal pathways where labor shortages truly exist, and ensuring that work in America is compensated at wages that allow people to live with dignity.

Pretending that unlimited labor supply has no effect on wages or affordability is not progressive. It is denial. And denial, in economics as in life, always carries a cost.