On April 25, the U.S. Supreme Court will hear oral arguments over the constitutionality of Arizona's controversial immigration law. But jurisprudence aside, the economic verdict is already in: The law has damaged Arizona's economy.
Arizona's immigration law burdens businesses with regulation and penalizes workers. It has driven tens of thousands of laborers, consumers and entrepreneurs from the state, turning its bad economy even worse.
At its heart, Arizona's immigration policy is an unfunded mandate that raises the cost of hiring workers and expanding production. Neither is good policy in even the best of economies, which we are far from experiencing currently.
The worst example: E-Verify. It's an electronic verification system that employers are supposed to use to check the legal work status of all new employees. Besides failing to detect unauthorized immigrants 54 percent of the time -- thus flunking its core function -- E-Verify falsely identifies legal workers as illegal about one percent of the time.
Arizona's immigration law also expands the so-called "business death penalty," where second-time offenders who knowingly or intentionally hire unauthorized workers lose their business licenses. This penalty deters businesses from moving to Arizona, expanding within in the state, or even starting up in the first place.
Businesses hire fewer new workers when confronted by expensive and complicated regulations such as Arizona's. Richard Melman, described as the "Steven Spielberg of the restaurant industry," halted plans to open an Asian-themed restaurant in Scottsdale after E-Verify became mandatory. He said, "You put in $3 million or $4 million, and you can be shut down for a mistake. Why take a chance? I want to see how it plays out."
E-Verify and the business death penalty didn't open up jobs for Americans; it drove entrepreneurs from the state.
All of this is reflected in Arizona's unemployment rate, which has been at or above the national average since mid-2008. Contrary to rhetoric, unauthorized migrants don't just sit around breaking immigration laws all day (and they are also far less likely than naturalized citizens to commit violent and property crimes in general, by the way). Immigrants fill low-wage jobs, start businesses, buy products from Americans, and grow the economy. But tens of thousands of these productive workers have either gone deeper into the informal economy or left the state completely. Their economic contributions have left along with them.
Unauthorized immigrants rarely compete for the same jobs as natives because they have poor language skills that put them at the bottom of the labor market. Communication in English is more important than brawn for better-paid professions; a productive immigrant labor force, therefore, tends to push more Americans up the wage ladder.
In Arizona they are concentrated in agriculture, construction, manufacturing, leisure and hospitality, food preparation, and the retail trade. Without an available supply of low-skilled workers, many of those businesses fail and prices for the goods they produce would rise.
Agriculture is a prime example. Farmer Tim Dunn grows black-eyed peas and garbanzo beans near Yuma, but he is having trouble finding enough labor to pick them. "We just don't see people walking up, looking for jobs like they used to," he says. Other farmers across the state tell similar stories.
Dunn's choice is not between paying low or high wages -- it is between paying low wages, stopping production, or shifting to more expensive crops that don't require pickers. As a result, Arizona farmers are shifting from growing profitable crops like alfalfa and tomatoes to less profitable crops like cotton and wheat because they can be harvested with machines. This amounts to government-created labor scarcity -- and it does not produce prosperity or greater wealth for Americans at large.
The Supreme Court will ignore the mighty contribution of unauthorized immigrants to Arizona's economy. Getting rid of immigration laws that restrict the movement of peaceful and healthy migrants would allow them to contribute even more. Arizona should be making it legal for them to work instead of increasing penalties on Americans for hiring the employees they want. Whether or not Arizona's immigration law is constitutional, it is bad economic policy, and the last thing an economy struggling to create jobs needs.
Alex Nowrasteh is the immigration policy analyst at the Cato Institute's Center for Global Liberty and Prosperity.
Follow Alex Nowrasteh on Twitter: www.twitter.com/AlexNowrasteh
It sure is - but not the way you depict.
AZ unemployment rate April 2010 = 9.6% US unemployment rate = 9.0%. The difference is 0.8 %
AZ unemployment rate March 2012 = 8.6%, US unemployment rate = 8.2%. The difference is 0.4%
The gap has halved since SB1070 in contrast to California - the bastion of sanctuary policies where their unemployment rate gap has widened by 0.5% in the same period.
Also relevant is Alabama's HB56 which has seen a dramatic 2% drop in unemployment in the 9 months since its inception, with their unemployment rate going from being 0.2% above the national average to 0.9% below it!
It seems that Arizona workers have developed a reputation for bringing their bigotry with them and believing that what is acceptable in Arizona is also acceptable in other states. Texas for instance has thriving construction and oil field industries. With the high numbers of Hispanic workers racist comments are not tolerated and are a disruption to teamwork. Most employers are choosing to avoid this situation by simply not hiring Arizona workers and the discord they tend to cause.
Are you a construction worker or an employee of a construction company?
Or are you someone who just enjoyed making up stories?
1) Forcing the states to defend bad legislation
2) Reducing business customers by forcing undocumented to leave the state
3) Reducing state and city tax revenues, sales, tax, and more because of a lower demand for products and people leaving the state
4) Increase the cost for businesses to do business in the state
The GOP never passes up a good opportunity to increase the role of GOV and the need for highly paid lawyers to defend their ideologically driven legislature.
We can measure the impact of "loose" immigration laws (status quo) in two ways. The first measure, as advocated by Alex, measures the economy as perceived by the ownership class. If a policy increases the value of enterprise, then the policy is good.
But "loose" immigration laws can be measured in a second manner, that is, the effect on the average person. If a policy reduces the quality of life, then that policy is bad.
And, so it is true for our immigration laws. If you operate a business which can benefit from cheap labor, illegal immigration is a good thing. However, if you work for wages, then illegal immigration is bad.
We now have examples of a more restricted immigration policy in both Arizona and Alabama. The results are following expectation. Alabama's December unemployment rate fell to 8.1%, down from 8.7% in November and 9.8% in September.
“In the last three months alone, we’ve seen an unprecedented drop of 1.7 percentage points,” noted Alabama Republican Gov. Robert Bentley
You cannot have it both ways - free trade and subsidized industries. By your example, if it is unprofitable then the way it should be is to import beans from Mexico not Mexicans to grow beans here!
Doesn't seem to have affected the businesses in AZ - most are doing quite well. Housing prices are going up, too - more people are buying homes in AZ now, even though prices are higher. Unemployment is also down, even for - gasp - citizens and legal immigrants.
A good example of where such rights exist is Somalia.
But they are really not a sovereign nation anymore.
Any business anywhere in the world has to abide by the laws of the nation they operate in. Only in the most corrupt can they "buy" the right to do as they please. Only the most corrupt businessmen would do that.
A good example is Walmart presently buying their way out of an investigation in Mexico.
If the author feels that businesses need foreign nationals that badly, they should disavow their US charter and move their business to the country that supplies their workers. They will have all they need without burdensome American regulations. There would be the detail of different regulations in their new country that might not be as friendly as the US.
If they don't hire US citizens, what does America need with them?
I happen to run a small business. I ran ten people through the system after about a five minute sign-up time. It took entering just a little information. An ID number, a social security number and a name. Enter a fake name, it bounces. It came back every time almost instantly.
Lately, we got to try it on a true illegal alien. We entered his foreign data and sure enough it came back that he was an illegal alien and we should contact the federal authorities.
His visa had expired two days before because of a Navy show he stayed for. We had a good laugh and he took Qantas back to Australia the next day.
No E-Verify is not a burden. If you have thousands of employees, have your HR department do it. But it is simple, effective and accurate.
Biometric technology is already used for passports. E-verify is 99% correct today, so it is good to go.
Romney's plan to make more than ten million consumers and workers flee would be very disruptive and would severely hamper the economic recovery.
Individuals Who Are Not Authorized to Work in the United States Were Paid $4.2 Billion in Refundable Credits
http://www.treasury.gov/tigta/auditreports/2011reports/201141061fr.html#detailedobj
http://www.hbs.edu/research/pdf/09-013.pdf
As far as the cost of educating the children of illegals , whether illegal or not , someone has to pay and it clearly isn't their parents. The 14th amendment was never meant to confer citizenship on the children of ilegals and it was never (mis)interpreted to do so until recently.