What would you do if your business competitor hired undocumented workers?

A question to the editor of Fortune asks what you would do if your business comptitor was hiring undocumented workers and undercutting your prices.

Dear FSB: I have the same problem you mentioned in "Blowing the Whistle on Illegals." I own a floor-covering store, and a competitor has taken a lot of business from me because he hires illegal immigrants and can do everything cheaper. What can I do to stop this? --Name withheld, Georgia

Dear Georgia: If you don't plan to sue your rival, as the entrepreneur in our story did, you can report him to the feds. The president of Golden State Fence in Riverside, Calif., just got sentenced to probation for knowingly hiring illegal immigrants. Send a letter to the Special Agent in Charge of your regional Immigration and Customs Enforcement (ICE) office (ice.gov).

ICE spokeswoman Pat Reilly says the agency has never heard of any tipster being sued by someone he turned in for hiring illegals. But if you are worried that your identity may become known, call ICE's anonymous toll-free hotline at 866-347-2423.

On one hand, this business owner has to provide for herself and her family. It's justifiable to report her competitor to the authorities or to sue her competitor. Fortune Small Business has blog and is inviting comments. There aren't any as I type this but you can expect heated responses, many along the lines of "file suit" or "report them to the feds."

On the other hand, undocumented immigrants are here so that they can earn money to provide a better life for themselves and their families. If we had computer programmers on H1B visas (skilled worker visas, requiring at least a bachelor's degree) from Central or South America, we would likely say that these folks were pursuing the American dream, just as our ancestors were. If we were more honest with ourselves, we might consider that NAFTA has worked very well for our businesses, but it isn't really providing Mexicans with living-wage jobs (and it's also outsourcing a lot of our jobs to Mexico). If we were more honest with ourselves, we might remember that this country rightfully belongs to the Native Americans (and that some parts were acquired after a war with Mexico), who were dispossessed and made strangers on their own land. In a sense, we are the illegal immigrants.

So, FSB readers can debate this situation all they want. But it is a symptom, not the problem itself. We have a systems issue, not a personal issue of unscrupulous businesspeople hiring undocumented workers. We need a systems-level solution.