Immigration and legalisation (in the USA)

[Uboat509]

I'm trying to get a handle on this immigration issue for my American Foreign Policy class. I don't know if this the right thread to ask this but it seems to me that the worst thing that could happen to the illegal immigrants living in this country for the purpose of working, as opposed to escaping political oppression for instance, would be legalization. The common argument made by proponents of legalization is that, "They do jobs that Americans won't do." This strikes me as an incomplete statement. It should be, "They do jobs that Americans won't do, at the wages and/or working conditions under which illegal immigrants are forced to work." It is also a fundamentally flawed statement in that, if the illegal immigrants were to suddenly be legalized then they would not do those jobs at those wages and under those working conditions any longer either. Employers are then faced with two choices. They must either increase wages to federally mandated levels, pay taxes and improve working conditions or they must move on to the next crop of illegals. Neither option seems particularly good for the current illegal immigrant population. The first option will force many, or even most, employers to hire fewer employees and may even force many out of business altogether. Furthermore, by becoming legal, these newly legal immigrants lose their competitive advantage over other legal immigrants or citizens. If they must be paid the same wages with the same taxes as anyone else then why hire them in preference to anyone else? The second option would simply increase the number of underemployed unskilled laborers in an already tight labor market. Plus, it recreates the same problem we face now, albeit with a new group of illegal immigrants.

Am I way off here or am I reading this close to correctly? It can be hard to filter through all the partisan screed on both sides of the issue to make sense of it.