Thursday, February 28, 2008

Arizona's Economic Nightmare

If you want to see the effects of an illegal immigrant free United States, look no further than Arizona. While its close proximity to Mexico, booming construction industry, and agricultural projects have made it a nice microcosm of the US in general. It might amplify the effects of what we do to a degree because of the sheer numbers of illegals (at least 10% of illegals in the US are likely in Arizona), but it's still a good case study.
At any rate, since the start of the year they've implemented a new law: businesses who hire illegals and get caught get their business license suspended for 10 days. A second violation and that license is pulled forever. It's a very tough policy, and also very short sighted. The New York Times mentions that:
The Arizona economy, heavily dependent on growth and a Latino work force, has been slowing for months. Meanwhile, the state has enacted one of the country’s toughest laws to punish employers who hire illegal immigrants, and the county sheriff here in Phoenix has been enforcing federal immigration laws by rounding up people living here illegally.
“It is very difficult to separate the economic reality in Arizona from the effects of the laws because the economy is tanking and construction is drying up,” said Frank Pierson, lead organizer of the Arizona Interfaith Network, which advocates for immigrants’ rights and other causes. But the combination of factors creates “ a disincentive to stay in the state.”
That's all fine and good, and if you were to read that you might say that it's good riddance. What it doesn't mention is the correlation between immigrants leaving and the state economy tanking. The Sierra Vista Herald points to a University of Arizona study that shows that
Estimates found that immigrants make up about 14 percent of the state’s workforce, according to the UA study. The Pew study, based on 2006 statistics, says 11 percent of the state’s workforce is illegal.
A UA study done last year found that according to 2004 data, immigrants generate about $2.4 billion in tax revenues, $860 million from naturalized citizens and $1.5 billion from non-citizens. The tax costs for things such as health care, education and law enforcement adds up to $1.4 billion leaving a positive fiscal impact of about $1 billion annually.
What does this mean? For starters, illegals aren't the drain on society that immigration opponents say they are. Even though they aren't taxpayers and have to subsist on substandard wages and live underground, they still leave a positive impact on the nation. Imagine if we allowed them to obtain legal status. They would really start contributing then, far beyond the $1 billion (in Arizona) that they're already giving us. Secondly, if that's what's causing a good part (let's say 50%) of Arizona's economic problems, it's realistic that getting rid of the illegals living elsewhere in the US would cost us at least 1 point of our GDP the year it happened. It would also increase inflation because those jobs they left would either be given to people who are paid more or (far more likely) go undone. That would create shortages that would in turn drive up prices. It's ultimately too hot a topic for this to work, but why in the world don't we let them come in, get their status, and live their lives? Big Brother should stop trying to police it and accept the reality of the situation and do something about it.

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