Immigration hard-liners
cheer, but economic fallout begins
PHOENIX (By Daniel Gonzαlez,
Arizona Republic) August 26, 2007 Undocumented immigrants are
starting to leave Arizona because of the new employer-sanctions
law.
The state's strong economy has been a magnet for illegal
immigrants for years. But a growing number are pulling up stakes
out of fear they will be jobless come January 1, when the law
takes effect. The departures are drawing cheers from immigration
hard-liners and alarm from business owners already seeing a drop
in sales.
It's impossible to count how many undocumented immigrants have
fled because of the new law. But based on interviews with
undocumented immigrants, immigrant advocates, community leaders
and real-estate agents, at least several hundred have left since
Democratic Gov. Janet Napolitano signed the bill on July 2.
There are an estimated 500,000 illegal immigrants in Arizona.
Some are moving to other states, where they think they will have
an easier time getting jobs. Others are returning to Mexico,
selling their effects and putting their houses on the market.
The number departing is expected to mushroom as the January 1
deadline draws closer. After that, the law will require
employers to verify the employment eligibility of their workers
through a federal database.
Immigration hard-liners say the exodus is a sign the
employer-sanctions law is working, even before it becomes
official. The law is aimed at shutting off the job magnet by
imposing harsh penalties on employers caught knowingly hiring
unauthorized workers. Violators face a 10-day suspension of
their business license for a first offense and could lose their
license for a second offense.
"This is exactly what it is supposed to do. Illegal immigrants
have no business being here, none," said Rep. Russell Pearce,
R-Mesa, the main architect of the employer-sanctions law. "Shut
off the lights, and the crowd will go home. I hope they will all
self-deport."
The ripple effect
Immigrant advocates, business groups and analysts say the exodus
is having a ripple effect that could add to an already-tight
labor market and dampen the state's economy.
"Nobody is going to be untouched by the ramifications of this
law," said Ann Seiden, spokeswoman for the Arizona Chamber of
Commerce and Industry. The chamber is one of a dozen business
groups that have filed a lawsuit seeking to block the law on the
grounds that it is unconstitutional.
Despite a slowdown in job growth, including the
immigrant-dependent construction industry, Arizona's labor
market remains tight with just a 3.7 percent unemployment rate
in July, according to the state Department of Economic Security.
An unemployment rate below 5 percent is considered full
employment, meaning anyone who wants a job can have one and
employers must compete for workers.
Illegal workers leaving the state could make the labor market
tighter, which could lead to higher wages but also higher costs
for goods and services, said Don Wehbey, the department's senior
economist.
Analysts say it's too early to measure the effect the
employer-sanctions law is having on the economy. But it could be
severe if a large number of undocumented immigrants leave the
state.
"If these workers leave, it's going to hurt the economy and put
the state at an economic disadvantage with other states," said
Judith Gans, program manager for immigration policy at the
University of Arizona's Udall Center for Studies in Public
Policy.
A study released by the center in July concluded that economic
output would drop annually by at least $29 billion, or 8.2
percent, if all non-citizens, which include undocumented
workers, were removed from Arizona's workforce. About 14 percent
of the state's 2.6 million workers are foreign-born, and about
two-thirds to three-fourths of non-citizens are undocumented,
she said.
Several key industries in Arizona, including construction,
manufacturing and agriculture, depend heavily on immigrants,
legal and illegal, to fill gaps in the workforce, especially in
low-skill jobs, she said.
The labor shortages are due to a native-born population that is
aging and more highly educated and therefore doesn't produce
enough low-skilled workers to meet growing demand. As a result,
immigrants are doing jobs that Americans won't do and that
Americans aren't available to do, she said.
"The frustration with illegal immigration is understandable,"
Gans said. But Arizona risks shooting itself in the foot "when
it tries to take matters into its own hands."
Pearce doesn't buy that. He believes the state can easily do
without undocumented workers. Although there may be some
short-term economic disruptions, the free market will adjust in
the long run, he said.
"Whatever adjustment takes place in the market, it will be worth
it," Pearce said.
Sen. Robert Burns, a Peoria Republican who helped craft the
employer-sanctions law, said what's also needed are more
channels for immigrants to enter legally.
But only the federal government can do that, and Congress failed
to pass immigration reform. Meanwhile, the state was forced to
take action because people are "fed up with illegal
immigration," he said.
"I wouldn't wish hardship on anybody and I don't want the
economy to go south, but maybe we need a jolt to show people
what's going on," Burns said.
Looking to leave
Abel Ledezma, a 31-year-old
telephone technician from Chihuahua state in Mexico, has a work
permit, but his fiancee, Cecy, a waitress, is undocumented.
Ledezma put his house on the market in July after the governor
signed the law. The two plan to move to Albuquerque, which
Ledezma thinks is more welcoming of immigrants, legal and
illegal.
"I feel like the people's attitudes towards not only immigrants
but also Hispanics has become very rude" in Arizona, Ledezma
said.
For example, Ledezma said, a man recently slammed the door in
his face when Ledezma arrived to fix his phone.
"He said to me, 'Speak to me in English,' " Ledezma said.
Ledezma speaks fluent English, though with an accent.
Adrian, a 34-year-old undocumented immigrant from Sonora, plans
to move back to Mexico as soon as he can sell a 2-acre tract he
owns in Tonopah.
"Yes, we are desperate to leave the moment I sell my property,"
said Adrian, who rents a house in Goodyear. He asked that his
last name not be used because of his immigration status.
Adrian said his sister also is selling her house with plans to
return to Mexico. He knows other undocumented immigrants who are
refinancing their houses and getting cash out so they can return
right away rather than waiting for their houses to sell.
Adrian said he plans to use the profits from the sale of his
property to open some sort of business in Rocky Point, a booming
beach resort in Sonora. He also is considering moving to Canada,
where he heard jobs are plentiful and getting a work visa is
easier than in the U.S., where Adrian has been unable to
legalize his status in 13 years.
Adrian, a foreman for a major Valley homebuilder, was planning
to construct a house for his wife and three U.S.-born children
in Tonopah. But with the employer-sanctions law about to take
effect, he is afraid he could lose his job any day: He works
with fake documents, something Adrian said his employer
suspects. Finding another job will be that much harder once the
law's verification requirements kick in.
"There is a lot of uncertainty," Adrian said. "I supervise five
workers, and the boss told us they are going to be checking the
documents of each worker. If the papers are no good, they are
going to get rid of those workers."
Impact on housing
Adrian has been calling his
real-estate agent every day to see if there are any potential
buyers for his property.
But Guadalupe Sosa, the agent, said this is a bad time to be
selling. Undocumented immigrants are putting their homes up for
sale when there is already an abundance of houses on the market,
adding to a glut. Mortgage defaults and foreclosure also are
rising.
In July, the Arizona Regional Multiple Listing Service listed
52,336 homes for sale in the Valley, up 17 percent from a year
earlier. The average time on the market for houses sold in July
was 95 days, compared with 65 days a year earlier.
What's more, Sosa said, many immigrants are not buying homes
because they are worried about losing their jobs under the law.
That has made it even harder to sell homes in immigrant
neighborhoods.
She pointed to three of her West Valley listings that are owned
by illegal immigrants who want to leave Arizona.
One was a brick four-bedroom selling for $167,000 in the
historic district of Avondale. Another was a beige stucco house
selling for $210,000 in a new subdivision in southwest Phoenix.
One was a blue townhouse selling for $95,000 in west Phoenix.
"A lot of people are selling because of the uncertainty," she
said. "They have one or more family members who are
undocumented, and without that extra money, they can't make the
mortgage."
Other areas of the economy also are taking a hit because of the
employer-sanctions law.
Rosa Macias, vice president of Muebleria Del Sol, said projected
sales are down 30 percent since the governor signed the law. The
Phoenix-based furniture business has five Valley stores, and 85
percent of its customers are Hispanic immigrants. She said
immigrants aren't buying because they are worried about losing
their jobs or already have been let go.
"We have been noticing sales are really, really low," she said.
The drop in sales forced the company to lay off 10 of its 75
employees, Macias said. Macias is also telling suppliers not to
deliver more inventory until sales pick up.
"I am very worried," she said.
