What underground economy? If you penalize greedy and unethical businesses that hire illegals, sooner than later the source of jobs for the illegals will dry up.
I mean cash under the table stuff, like small landscaping/lawn care, small diner cooks, mom and pop motel work, and drug smuggling. I agree that workers for "big agriculture" might be out of work and have to leave, but there will still be some opportunities for those who stay. I'd rather do everything we can to prevent them from coming here illegally in the first place. Other than this I basically agree with the rest of your post.
Even that can become "hazardous" for some businesses if the law is enforced. But there is much opposition and 12-13 million illegals are quickly becoming an essential part of our economy. The consequences of this will be felt by our children. And we may experience the consequences of potential terrorists slipping inot the country through our porous borders while our leaders keep increaisng airport secuirty.