Thread: Arizona economy bracing for immigration crackdown

Arizona economy bracing for immigration crackdown

PHOENIX, Arizona (AFP) — New laws targeting employers who hire illegal immigrants take effect here on January 1, with experts predicting the move may cost the state's economy billions of dollars in lost income and taxes.

The new laws are described as the toughest local anti-illegal immigration legislation in the United States, and will sanction businesses who knowingly hire undocumented workers.

Any employer who falls foul of the law will see their business license suspended for 10 days for a first offense; a second infraction will see the license permanently revoked.

Judith Gans, a University of Arizona immigration policy expert who has studied the economic impact of illegal immigrants, said the new law will have a dramatic effect on the local economy.

"Industries will shrink and prices will go up," Gans told AFP.

The price of a hamburger, a head of lettuce, and a week's worth of gardening services will all increase as workforces shrink, Gans said.

Illegal immigrants "are filling gaps in the labor force, and as those gaps widen, prices will go up," she said. "That theory is not contested."

According to an October study released by Gans, Arizona's foreign-born population has tripled in less than two decades, from about 269,000 in 1990 to 831,000 in 2004.

Experts peg the state's illegal immigrant population at about half a million. Workers, mainly from Mexico, flock to pick lettuce in Yuma, make sushi in Phoenix, and clean hotel rooms in Flagstaff.

According to Gans' study, they make up 59 percent of the workforce in farming; 27 percent in construction; 51 percent in landscaping; 26 percent in hotel work; 23 percent in restaurants; 33 percent in private homes; and 46 percent in textile manufacturing.

Out of every six non-citizens in Arizona, five are illegal, according to Gans. Her study indicates the net 2004 fiscal impact of Arizona illegals was positive by about 940 million dollars, when balanced against costs of 1.4 billion dollars for education, health care, and law enforcement.

A public outcry and inaction by lawmakers in Washington to pass immigration reform laws, led state officials to pass the employer sanctions law.

Local businesses are bracing for the effect of the crackdown.

"Oh yeah, it'll affect us," said Jeremiah, the owner of Around Town Landscaping in Phoenix who estimated that the cost of having a garden mowed will go up 15 to 20 percent in 2008 as a result.

"We're going to lose some qualified guys, for sure. I'll keep my product the same, but it'll affect efficiency. It's a lack of foresight to think it wouldn't affect those things," added Jeremiah, who would not give his last name.

"It's not the right way to go. I don't think people did their homework on it, and no one consulted small companies on how they feel about it," he added.

Construction costs won't noticeably rise, said Julie Fenner, office manager of Hidden Valley Roofing in Phoenix. The company has always screened for proof of citizenship.

"To spread that over the cost of a roof, it's not going to happen," she said. "I can't see costs going up based on that."

Agriculture is expected to be among the industries hardest hit by the new law. Yuma needs about 50,000 pickers during lettuce harvest. Only half that number lives on the American side of the border. Pickers now earn 12 to 14 dollars per hour, said Dawn McLaren, an Arizona State University research economist.

Their wages could rise to 20 dollars per hour.

As more and more farms move south of the border to avoid high production costs, food may have to be imported on a weak dollar, making groceries more expensive.

"If we can't find labor here at a reasonable cost to business, businesses can simply move their business elsewhere," McLaren said. "We may see the cost of having to import stuff."

One Arizona grower recently decided to buy a farm in Iowa instead of investing in his Arizona operations, said Joe Sigg, director of government relations for the Arizona Farm Bureau.

"Banks will start looking at credit risks," Sigg said. "It's going to be more of an economic cloud on Arizona than the cost of a head of lettuce will be. Any prospectus for investors will have to have a flashing sign around it saying, This business may lose its LLC.' I think the investment community will chill on Arizona as well."

Uncertainty about what will happen is as big an issue as anything, Gans said. "We'll see," she said. "Arizona has certainly put itself on the line."


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Illegal immigrants "are filling gaps in the labor force, and as those gaps widen, prices will go up," she said. "That theory is not contested."

But, this is not all bad. The side benefit, is that legal American workers gain both by greater earning and bargaining power, and also, can reclaim jobs formerly given to IAs (that, have no legal basis to have anyway).

When asked about modest price increases to basic commodities produced by industries having large penetration of illegal workers, most Americans have shown consistently that they are willing to endure some price inflation to remedy the situation. At the same time, this policy greatly increases pressure on employers - which is both intended and justified - to 're-balance' ownership vs. worker interests in the economy. In short, the side effects are not necessarily all bad.

PS - Edit after the fact - oh, and I neglected even the most basic point:
After the implementation of the policy, the relative advantages go to businesses operating legally. Illegal employers are the ones which will be impacted the most. Legal employers probably don't have to change very much if at all in the way they do business already.

where are all of these people going to run when more and more states implement laws. There might be tax revenues lost. but there won't be all of those illegals to support. So I don't see the problem. Why would prices go up? they will have all of that savings from programs that the illegals will not be receiving.

I think they will INFLATE prices unnecessarily to try and 'prove' they can't get by without illegal immigrants and continue their huge profits.

Fences make good neighbors.

Originally Posted by MyAmerica

I think they will INFLATE prices unnecessarily to try and 'prove' they can't get by without illegal immigrants and continue their huge profits.

Fences make good neighbors.

The will try this we/alipac can and need to show they are doing this and stop it

The price of a hamburger, a head of lettuce, and a week's worth of gardening services will all increase as workforces shrink, Gans said.

Well, Jimmy crack corn and I don't care. Get em out of here. Higher prices will be well worth it.

The price of a hamburger, a head of lettuce, and a week's worth of gardening services will all increase as workforces shrink, Gans said.

Illegal immigrants "are filling gaps in the labor force, and as those gaps widen, prices will go up," she said. "That theory is not contested."

Haven't bought hamburger meat since the ecoli scares.
Lettuce is already expensive and has no nutritional value, don't need it.
Gardening services? HAHAHAHA too many gardeners and not enough people needing those services anyway, trim the deadwood.

Out of every six non-citizens in Arizona, five are illegal, according to Gans. Her study indicates the net 2004 fiscal impact of Arizona illegals was positive by about 940 million dollars, when balanced against costs of 1.4 billion dollars for education, health care, and law enforcement.

Why don't we put that to the test? Let's see what the impact will be once illegals stop freeloading on free medical, education, and all the other goodies they get for popping out anchor babies. Oh and let's not forget the money sent back "home".

How about we go back to basic's, fry your own hambuger, eat it without lettuce, mow your own lawn, how about your kids do it( might help keep them off drugs) How about you clean your own house get a friend or family member to watch your kids etc., There will be more jobs for teens to help keep them out of trouble and teach them some work ethic's.

In the long run we will win all the way around, the schools won't be over crowded, and we will gain the cost of health and welfare thats being doled out!

Ha! what a concept, America goes Independant

Originally Posted by SOSADFORUS

How about we go back to basic's, fry your own hambuger, eat it without lettuce, mow your own lawn, how about your kids do it( might help keep them off drugs) How about you clean your own house get a friend or family member to watch your kids etc., There will be more jobs for teens to help keep them out of trouble and teach them some work ethic's.

In the long run we will win all the way around, the schools won't be over crowded, and we will gain the cost of health and welfare thats being doled out!

Ha! what a concept, America goes Independant

AMEN to all of that!!!!!!!

How can "the economy" brace for something, it is not a person. Talk about stupid headlines. The economy is made up of people working and buying. Yes, the ones breaking the immigration laws are "bracing" since those laws are finally being enforced. The ones not breaking the law are jumping with joy since they will make more money and pay less taxes!