> 2. not jobs that these people actually want anyway, so at worse you will see a lot of inflation, or a lot of open job positions. It doesn't make sense, but it won't really make sense.
Is it your intuition that the labor market would not adjust to a lower supply by becoming more desirable? If not, why?
The average salary of an undocumented immigrant is $36,000[1], which is far below that of the average trump voter, a median American above $50K although he did OK with people in the $40K bracket. The only group likely to see wage increases from mass deportation are high school dropouts [2]. From Wikipedia:
Research by George Borjas found that the influx of immigrants (both legal and illegal) from Mexico and Central America from 1980 to 2000 accounted for a 3.7% wage loss for American workers (4.5% for black Americans and 5% for Hispanic Americans). Borjas found that wage depression was greatest for workers without a high school diploma (a 7.4% reduction) because these workers face the most direct competition with immigrants, legal and illegal. [3]
Assuming ALL recent-ish immigrants are all mass deported and the economy adjusts immediately, you will see a ~7.4% shift of real wages for high school dropouts making the low end of <$36K, most of which voted for Clinton anyway. You'll see almost no issue with those above this rate because they are not competing with illegal immigrants. (This makes it more likely capitalists who see wage increases for non-service positions (eg manufacturing) will automate faster to reduce costs, but I think this is a side point considering that most jobs in the US today are in the service sector and not as easily automated away.)
Of course, you could also give the suppressed income bracket a 7% tax cut and end up in roughly the same spot without mass deportation; the undocumented immigrants aren't paying income tax anyway, and this would be HIGHER than necessary because the above study takes into account legal immigration as well.
In equilibrium, people get paid according to their productivity. (That's why eg China saw such huge wage raises over the last decades.)
So, just excluding or including some more people won't change the level of pay, as a first order effect.
There's no constant demand for labour. It expands and shrinks with supply. (And even then, the federal reserve can make arbitrary large amouts of demand. They can literally print money.)
>In equilibrium, people get paid according to their productivity
But where and when has there ever been this magical equilibrium?
In the real world people get paid whatever they can get away with, and some people can get away with more than others. Telecommunications execs can price gouge you and get a bonus for it.
>For the economy as a whole, abstracting away imports and exports, we can only eat what we sow.
Exactly. And "we" after all is another abstraction. And "I" can eat what "you" sowed.
If corporations have record-high profits, while workers get stagnating salaries while housing prices raise, someone is going to realize what "we" entices after all.
Is it your intuition that the labor market would not adjust to a lower supply by becoming more desirable? If not, why?