Research

Dispatch from a border state: The immigration issue in Arizona

Harsh employer sanctions are scheduled to become law in Arizona on January 1, focusing a national spotlight on the state that the New York Times called a "striking laboratory" for immigration reform. Immigrants are an important part of the work force in this border state, particularly in construction, agriculture and manufacturing and low-skill service jobs. A forum on immigration co-sponsored by The Communications Institute and Arizona State University brought together spokespeople for the many interest groups in the debate over immigration for a morning of civil discussion and brainstorming. Despite disparate points of view, participants did find some common ground.

2007-12-19

The New York Times calls Arizona "a striking laboratory" on questions dealing with illegal immigration. After watching Washington dither over comprehensive immigration reform this year, Arizona leaders decided the issue couldn't wait. Last summer, Gov. Janet Napolitano signed a bill into law that would punish employers who hire illegal immigrants, levying civil fines and revoking business licenses.

The law was scheduled to take effect Jan. 1, 2008, although business interests and civil liberties advocates are challenging it in court. More recently, Phoenix Mayor Phil Gordon appointed a panel to alter police procedures that would give officers more latitude to ask people about their immigration status. Napolitano and Gordon are considered moderate Democrats. Both had maintained that immigration was a federal issue but now said they were forced to act.

Many see Napolitano and Gordon's stances as evidence that the issue has become red hot in the state. Against this background, lawmakers, political activists, state officials, academics and business people participated in a forum called "Immigration: Confronting the Challenges in Arizona" on Dec. 11. Attendees were asked to come up with options for the future through a civil discussion.

Although participants expressed a wide cross-section of opinions on issues related to the topic, they found three areas of consensus: A more realistic guest-worker program that relies on market forces and not government-mandated caps. Better education for the public because discussions on the topic are often driven by racial prejudice.

The urgent need to press the federal government for costs that local government bears due to illegal immigration. "This is of the few times we see people from all around the state coming and having a civilized, reasonable and rational discussion about what is a very real crisis in our state," said state Rep. Kyrsten Sinema, D-Phoenix.

Immigrants' economic footprint

Arizona has an estimated immigrant population of 500,000. Using United States Census data, the University of Arizona's Udall Center reports immigrants make up about 14 percent the state's work force. The census does not ask immigrants about their legal status. Just what percentage of those workers are in the country illegally is unknown, although the proportion of the state's workforce that are illegal is usually estimated between 9 percent and 12 percent.

Most of the immigrant workforce is engaged in construction, agriculture and manufacturing and low-skill service jobs. The Udall Center estimates that the total economic contributions from immigrants to the Arizona economy is about $44 billion. If the courts allow the Legal Arizona Workers Act to go into effect, it would almost certainly impact immigrant workers' output for the state's economy.

"Let's say all 10 percent, 12 percent of the workforce goes home or goes to another state," said Dan Griswold of the Cato Institute. "And say three, four, five percent of currently licensed business lose their licenses because they were found have employed these workers. Did the Legislature commission any kind of study on the impact on the state's economy if the law worked as intended?"

Tim Bee, president of the Arizona Senate who was serving as moderator, said he knew of no study that came out before the bill was passed. But Bee said the Legislature needed to act because a pending ballot initiative would have imposed its own set of controls. "This issue was polling at 68 percent with the public," Bee said. "They wanted something done about it," he said. Arizona is one of 14 states that permits voters to pass statutes via the ballot initiative route.

By passing a bill, the legislature preserved its ability to amend it — which lawmakers couldn't do if the voters had enacted a law. William Beach of the Heritage Foundation, a free-trade think tank, said he'd done a study on the impact nationally of losing all the workers who are in the country illegally (without replacing the workers with appropriate visas). Gross Domestic Product would drop by $171 billion annually, he reported, and total employment would drop by 2.5 million jobs.

Household buying would drop by $66 billion annually. "These numbers are some of the largest I've seen," Beach said, and "I've been doing tax bills all my life." Beach said the drops are almost equal to the amount the Bush tax cuts have added to the economy. Wages of workers still in the country would increase, he said, and unemployment, which was at 4.7 percent in November, would fall. But those gains would be temporary.

"As wages go up, what happens next?" Beach said. "Price of milk goes up. Price of butter goes up. Everything goes up." Beach added that the appropriate policy approach would be to make sure a program was in place to replace the workers, "But Arizona can't really go back and do that," he said.

Out in the Fields

Florence Mayor Tom Rankin recalled that in the 1960s, farmers from Yuma, in the state's southwest corner, recruited his brother and other rural high school students to pick watermelons. "Can you imagine coming to Phoenix or Tucson and trying to get high school kids to go work?" he said.

"Seriously. You're not going to do it." For farmers, any labor shortage brought about by the Legal Arizona Workers Act will be felt immediately. "The fact is farmers have crops in the field right now," said Nan Walden, vice president and counsel of Farmers Investment Company and a pecan rancher in the southern part of the state.

"And they can't wait for a secure border. They can't wait for these things to take place." Losing a full crop would put farmers out of business. "You cannot jump back in the next year," she said. "There's too much overhead cost." Walden said she believes the state could lose a significant portion of its agriculture sector. "That's food production. What is important?"

A phase-in

State Rep. John Kavanagh, a Republican who co-sponsored the bill, said the dire predictions reminded him of the reaction years ago when certain Arizona cities banned smoking in restaurants and bars before the statewide ban went into effect. "We heard the same litany of complaints," he said. "'If you pass this law, we will be out of business. Nobody will come here. We will be bankrupt. Revenues will down.'"

The scenario did not play out that way, however. A year into the ban, restaurant closures remained approximately level in those cities, and "sales tax revenue was pretty much the same," he added. Kavanagh said he is certain that the Legal Arizona Workers Act will reduce the labor supply, but he thinks the potential impact has been over estimated. "I don't think there will be a sudden vacuum created as all these illegal immigrants leave," he said, "because it's going to be a phase in."

That's because almost every county attorney in the state has "erected barriers" to enforcement, Kavanagh stated. County attorneys have said they will not investigate anonymous complaints and that anyone knowingly makes false statements will be prosecuted. "There's not going to be aggressive enforcement outside of Maricopa County," Kavanagh said. (Maricopa County is where Phoenix is located and is home to more than half the state's population.)

As well, he anticipates help from Congress. "I believe Congress will have no problem getting the guest-worker program that we all seem to agree that we need," he said. Kavanagh believes some of the labor shortfall will be made up by automation. "You lose your dishwasher, buy a machine," he said. Other jobs will be filled with people are legally in this country, he said.

"Where I live I know of high school students who used to bus tables at night or during the summer who can't get those jobs anymore because they've been taken," he said. "I know high school students who'd love to make 10, 15 dollars an hour cleaning up construction sites. But they don't want to stand on the corner with day laborers to compete for those jobs."

Alberto Olivas, director of voter education and outreach for Maricopa Community Colleges, said one area for a common ground would be to associate some cost for a business to hire illegal immigrants to fill needs. "Then it would still prioritize jobs for citizens," he said.

The Nudge

Kavanagh said he thinks the Legal Arizona Workers Act may be "just the nudge" to force Congress to act on guest-worker program. Sean Noble, chief for staff for Rep. John Shadegg, R-Ariz., said Congress needs more than a nudge to budge. Much of the opposition in Congress comes from members who represent areas where Latinos and immigrants are new phenomenon. "Those of us who are native Arizonans have grown up with immigrants all of our lives and for generations," Noble said.

"For us, having an influx of immigrants from Mexico is not a challenge." Shadegg's office asks people who call in about immigration issues if they are Arizona natives or moved to the state from elsewhere, Noble said. He said 95 percent of the people most vocal about the immigration moved to Arizona from somewhere else.

Noble said he thought it would take more than the collapse of the Arizona economy to change the mind of opponents. The main sticking point is amnesty for 12 million immigrants believed to be in the country illegally. "One of the things we've kicked around is a guest-worker only program," Noble said. "You put a guest-worker program in place, that takes most of the population that is going across the border out of desert."

Culture wars

Much of rhetoric surrounding immigration revolves around racial prejudice. "After 9-11 people lost all sense all sense of what immigration reform should really be," said Rose Mary Garrido Wilcox, Maricopa County supervisor. "We need to get back to pre 9-11 and talk about our economy and talk about our sister nation and talk about the ebb and flow of workers and get away from the hatred. The hatred is going to ruin this country."

Rep. Pete Rios, D-Hayden, said social conservatives need to better understand the background of values of immigrants. "Let's focus on who these people really are," he said. "They're very traditional. They're God-fearing people. They're very conservative people. They have a very strong work ethic. Strong family values. They're religious.

Where do these mores and values fit if not with the conservatives in the state of Arizona and, I think, in the majority of the nation?" "Immigration: Confronting the Challenges in Arizona" was cosponsored by the Thomas R. Brown Foundations, The Communications Institute, Arizona State University and the University of Arizona.

Bottom line:

• With a harsh employer sanctions law set to take place Jan. 1, Arizona finds itself in a national spotlight on immigration reform.
• Immigrants are an important part of the work force, particularly in construction, agriculture and manufacturing and low-skill service jobs. The state unemployment rate was 3.5 percent in November.
• Participants in the immigration forum felt the country needs a more realistic guest-worker program, driven by market needs and not inflexible government quotas.
• Much of the debate over immigration is driven by racial prejudice. Many of the people who seem most upset by the influx of immigrants are from areas of the nation unfamiliar with Latinos.

Economics