Sunday, January 27, 2008

Arizona starts to see nativist fallout

Barron's magazine predicted that Arizona's move to impose tough sanctions on employers who hire illegal immigrants would result in an "Arizona apocalypse," and while it's too early to know if that dire forecast will come to pass, something is certainly in the works. Facing a ten-day suspension of their business licenses after a first offense, and a permanent revocation of licenses after a second transgression, companies are laying workers off, reassessing their ability to do business and even moving out of state.

Reports Agence France-Presse:
A crew leader who worked for Rick Robinson's Phoenix landscaping company left the state because his wife is an illegal worker. The worker was scared his wife would be deported.

"I've talked to other companies who have said they can't find anybody," Robinson said. "I've heard they're going to Utah or Texas or New Mexico because they don't have a law like this. We and other landscape companies are uncertain as to how far-reaching it will be. People don't know what they can and can't do. The whole thing is confusing, gross, and unfair."

David Jones, head of the Arizona Contractors Association, said he knows of three construction companies which have laid off 30, 40, and 70 employees respectively since the beginning of the year.

Unable to find jobs, or fearful that their loved ones will be caught and deported, illegal immigrants and their legal friends and relatives are fleeing the state in what the press has dubbed "Hispanic panic." In a state where illegals make up better than 10% of the workforce, the exodus promises to have a major impact. The vacancy rate in Tucson-area apartment complexes favored by illegal immigrants has jumped dramatically since the law went into effect. According to the Arizona Daily Star:
The vacancy rate on Tucson's South Side jumped to 11.9 percent in the fourth quarter of 2007, up from 7.1 percent a year earlier, according to Phoenix-based RealData Inc., a real estate research and consulting firm.

That area of the city has more than twice the rate of foreign-born residents than the city as a whole, according to the U.S. Census Bureau.

On the Southeast Side, 10.7 percent of apartments were empty, up from 5.9 percent a year before. That part of the city has a lower percentage of foreign-born residents.

As a whole, the metro area vacancy rate grew 1 percentage point to 8.3 percent, according to RealData.
Of course, advocates of the sanctions law will say that this is exactly the result they were hoping for; they want Hispanics to flee the state (usually, they'll claim that they just want the illegal ones to leave). But with workers leaving Arizona, taking their rent money, mortgage payments and shopping dollars with them, and with state employers facing rising labor costs -- if they can even find workers -- the economy is likely to take a major hit. In fact, the University of Arizona predicts a $29 billion economic loss if illegal workers are successfully purged from the state (full report here in PDF).

Of course, the law won't be universally successful. Faced with a damned-if-you-do, damned-if-you-don't choice, many businesses will just take their chances with illegal workers, and many will slip under the radar. At least one immigration expert -- Marc Rosenblum of the University of New Orleans -- predicts major growth in the underground economy, with more workers than ever before getting paid off the books.

Black markets have dulled the economic effects of stupid policies in the past, and will likely do so this time around too. But off-the-books workers will have less security and less money than they would if allowed to function in the official economy, and they'll contribute less than they would otherwise. That's especially true since workers have the option of going where they're welcome -- already there are reports that Mexicans intent on seeking work in the U.S. are bypassing the increasingly unfriendly border states. Why take an uncertain cash job in unwelcoming Arizona when you can get a job with benefits in Oregon or Virginia?

The real losers will be the people of Arizona -- the nativists tightening the screws, the workers and employers getting the shaft and the disinterested rest who find making a living increasingly treated as a privilege to be withdrawn at the whim of government officials.



Anonymous Anonymous said...

I think your conclusion is absolutely wrong, but only the future can show us the truth. American citizens have a tremendous ability to respond to a changing environment and a level playing field. The decrease in crime and social woes will surely increase the happiness of the common, hardworking Arizona citizen. Many of the capitalist businesses that have been exploiting cheap labor will need to invest in their loyal and legal workers. Our diverse American society will see a great improvement of the middle class--even if the rich and unhappy capitalists have less money and power.

February 1, 2008 9:29 PM  
Blogger J.D. Tuccille said...

Oh lovely. Anti-immigrant bigotry tied together with hostility toward private enterprise. Can Father Coughlin be far behind?

February 3, 2008 11:54 AM  
Blogger Mike said...

I agree that this situation must play itself out to see what the ramifications really are. One thing that I don't see talked about much is the possibility of legal workers moving to AZ to fill the jobs.

I find it hard to believe that all of those jobs now left vacant by departing illegals will go unfilled. The media reports from around the country show that after ICE raids, job applicants are lined up wanting those jobs.

I guess only time will tell who turns out to be right.

February 3, 2008 12:44 PM  
Anonymous Anonymous said...

My mom works in an elementary school in Phoenix. According to her enrollments have fallen at many of the Phoenix area schools as families move out of AZ.

This causes a big funding problem as the schools receive money based upon the number of children enrolled.

February 19, 2008 11:27 AM  
Anonymous Anonymous said...

Regarding your mother and the school situation of receiving funding per child. That is a true scenario which is based on the school funding coming from property taxes of homeowners. The figures show that Arizona (and almost all other states) illegal aliens are not property owners but a renter populous given their lack of SSN or credit records and desire to remain below the radar. One of the problems was that too many illegals were receiving government services without supporting the tax base as they were :
1) not property owners therefore not contributing to the system
2) Sending the majority of their wages to family in Mexico keeping only enough to survive, thereby not supporting the tax base and diverting local dollars out of the system.
3) Overwhelming governments systems and programs including law enforcement, health, educational and welfare systems.

Given these arguments, some of these underfunded and bloated systems should come back to a normal state of operation with the loss of demand. Yes, there will be some personal hardship in these systems as they shrink and adjust but it will only make these systems stronger, more efficient and more useful to those citizens whose right it is, by their tax dollar support, to use these systems.

February 19, 2008 9:36 PM  

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