Illegal Immigration and the Labour Market

Thanks to Workplace Prof Blog for pointing out this interesting article from the New York Times discussing the ongoing debates and political battles in the U.S. relating to the use of “illegal immigrant” workers.  It’s a fascinating issue from a policy perspective.  Many employers argue that they need these workers because “American” workers don’t want the hard laboring jobs they perform.  Of course, many employers also like illegal immigrant workers because they do not pay benefits or (often) even minimum wage laws, confident that these workers will not file complaints or complain.  On the other hand, some politicians, employers, and unions argue that the use of illegal immigrants takes away jobs from “Americans”, and puts downward pressure on wages.
These issues lead to calls for both a greater crack-down on the use of illegal workers, and to calls for laws that make it easier for them to obtain work visas and citizenship.  Its interesting that in the European Union, free movement of workers from state to state was an original pillar of the trade law–that’s how “free trade” works, by allowing workers to move to the best job opportunities.  The idea of allowing Mexicans to freely enter the U.S. and Canada, on the other hand, was never a serious consideration in the NAFTA trade talks.
Illegal immigration is an issue in Canada too.  SOme estimates put the number at close to 200,000 such workers, employed mostly in the construction and agricultural industries.  Canada tends towards encouraging immigration by highly skilled and educated workers, although some argue that this is wrong-headed because where workers are most needed is in the lower skilled jobs and having taxi drivers with Ph.D’s is not serving the Canadian economy well.  A good discussion of these issues appears in this article by U of Toronto Professor Jeffrey Reitz.
Put on your policy hat:  How would you deal with the issue of illegal immigration and employment if you were responsible for Canadian laws?