http://www.charlotte.com/mld/charlotte/ ... 437249.htm

Posted on Sun, Aug. 21, 2005

Positives, negatives affect economy

Immigrants are key to labor force, but unpaid taxes cost U.S., states

STELLA M. HOPKINS

Staff Writer


U.S. Rep. Sue Myrick's push to penalize employers for hiring undocumented immigrant workers raises the question of how the economy would fare without what may be millions of people toiling illegally in manual and low-paid jobs.

The question is important in North Carolina, home to an estimated 300,000 illegal immigrants, eighth in the nation. Answers are hard to come by.

Workers are unlikely to admit they're here illegally, and employers typically deny knowingly hiring illegal immigrants.

But there's no question the illegal work force is growing as people flee poverty in other countries. The undocumented often find jobs in construction, landscaping, agriculture and hospitality. They may work for below-market pay or cash, without benefits. They are consumers, helping drive economic growth.

"The United States is simply hooked on cheap, illegal workers...," said a January report by Bear Stearns Asset Management Inc. in New York. "Illegal immigration has been America's way of competing with the low-wage forces of Asia and Latin America, and deserves more credit for the steroid-enhanced effect it has had on productivity, low inflation, housing starts, and retail sales."

Myrick, a Charlotte Republican, wants to raise the civil fine on employers to $10,000 from $250 for each illegal immigrant employed.

"An abrupt increase in employer enforcement could have a negative impact" on the economy, the Bear Stearns report said. The loss of a huge, low-cost work force could hurt profits, especially for small businesses, and increase national budget woes by reducing tax revenues.

However, the U.S. might be losing as much as $35 billion a year in tax dollars because of undocumented workers paid cash, with no taxes withheld, Bear Stearns said. The report also pointed to social costs, such as health care and law enforcement.

Researchers at UNC Chapel Hill's Kenan Institute are trying to get a handle on the economic impact of North Carolina's growing Hispanic population. The report is due in January.

The state is a heavy user of federal programs to legally hire temporary, foreign workers for agriculture and other jobs, such as landscaping. But even in North Carolina, relatively few employers use the programs, saying they're expensive and cumbersome.

Armando Ortiz-Rocha, consul of Mexico in Raleigh, said the state and nation are dependent on immigrant workers, including the undocumented.

"There are not many people in the American community that are willing to take those jobs," he said. "That's why millions of undocumented workers are still able to find jobs in the economy."