I'm no economist, but I see a problem with Megan McCardle's supposition:
One particular consideration I think is underdiscussed is the fact that much of the labor illegal immigrants provide substitutes for women's home labor. And I don't just mean nannies for rich women. I mean cleaning services, and food processing, and dry cleaning, and grocery delivery, and all the other things that make it possible for large numbers of women to work outside the home. In an ideal world, of course, women and men would take equal responsibility for the household. But in the less than ideal world that we actually inhabit, an increase in the price of those services would probably mean that fewer women would find it cost-effective to work outside the home.People will pay a certain amount for certain kinds of labor. Period. White, purple or green, legal or illegal, no one will pay above what they think appropriate for a job. Consumers who refuse to pay the price or take the slacker, will just end up with a sloppy house.
I don't see women leaving the job market should the economy make it too expensive to hire someone or the house cleaning worker stinks. With a tighter economy, people will need to keep their job. They'll need it because of other inflationary pressures. Without their job, they might have time to clean the toilet and grocery shop, but they'll be buying Mac-n-Cheese and Ramen noodles to survive.
American families will just end up with a pigsty for a house and two-feet tall grass. Horrors!
Update: Anonymous (that wise and ubiquitous commenter) says: How about down-sizing?