There often are employers who would be willing to pay more to hire legit workers, but they can’t - because all of their competitors in that industry are hiring illegals for sub-min-wage, and so they can’t remain competitive without stooping to the same practice.
Prices for goods and services will go up, but in most cases, not by much, since the cost of the unskilled labor is often only a portion of the overall cost of a product.
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Impact of Increased Wages on Food Cost
Dr. Philip Martin, a leading academic authority on agricultural labor, notes that American consumers now spend more on alcoholic beverages on average than they spend on fresh fruits and vegetables.
An average household currently spends about $370 per year on fruits and vegetables. If curtailing illegal alien agricultural labor caused tighter labor conditions and a 40 percent increase in wages, the increased cost to the American family would be $9 a year, or about 2.4 cents per day. Yet for the farm laborer, the change would mean an increase in earnings from $8,800 to $12,350 for each 1,000 hours of work (25 weeks if the worker worked 40-hour weeks). That increase would move the worker from beneath the federal poverty line to above it.
According to Dr. Martin, “…consumers who pay $1 for a pound of apples, or $1 for a head of lettuce, are giving 16 to 19 cents to the farmer and 5 to 6 cents to the farm worker.” 3 Therefore, a 40 percent increase in the 5 to 6 cents a pound that the farm worker receives would amount to an increase of about 2 cents per pound that would probably be passed on to the consumer.
(Martin, Philip, PhD., Professor of Agricultural and Resource Economics, University of California-Davis, “How we Eat: 2004,” Rural Migration News Vol. 13 No. 4, January 2006.)
Impact of Increased Hotel Wages
Let’s use Los Angeles as an example. A new “living wage” law just took effect there, setting housekeeping wages at $10.64 per hour if there are no benefits. That comes out to $85.12 per shift before taxes. At the LAX Hilton a housekeeper is expected to clean sixteen rooms per eight hour shift (2007 figure). That means the hotel pays her $5.32 per room.
If Hilton increased housekeeping wages by 50%, to $15.96 per hour ($127.68 per shift) it would cost $7.98 to clean each room, or $2.66 more. That cost can be passed on to the hotel guest.
The cheapest unrestricted room rate (as of March, 2008) is $239 a day. The extra cost of the wage increase to the guest is 1.1%.