Arizona’s Immigration Bill and its State Economic Effects

It goes without being said that our nation’s economy is still not in the best condition, even if it has been nearly 4 years since the financial crisis. Nowhere is the recession being felt more than in Arizona, largely due to the fact that during their hardest economic times they decided to pass a state immigration law that drove thousands of workers, consumers and taxpayers out of the state. When the recession was at one of its highest points back in 2010, Arizona lawmakers pointed their fingers to their undocumented immigrant population, affirming that it was partly due to their being in the state and taking jobs away from native-borns that the economy was not recovering. Arizona’s policymakers claimed their undocumented population was costing the state too much in undeserved support, and quickly set in motion a domino effect that resulted in draconian immigration laws being written and signed by the state’s governor. Now, over two years later, with their undocumented population decimated, it is evident that economic conditions have not gotten better, in fact they have gotten terribly worse. It is also clear that native-borns have not taken up the opportunities for job openings that were left vacant by undocumented workers (mainly because native-borns do not want those jobs), and so it could now be stated as a fact that this group of people were made scapegoats and victims of a malicious scheme that has only shrunk the Arizona economy and destabilized the state as a whole.

The CATO Institute conducted a study where it found that Arizona’s two punitive immigration laws “have inflicted serious damage on the state’s economy.” The 2007 Legal Arizona Workers Act (LAWA) mandated that E-Verify, which is a federal electronic employee verification system, be used by businesses who would be forced to comply with those standards or else risk losing their business licenses, particularly if they were found to be hiring employees who had illegal status in the country. The idea behind this was that businesses would cease their illegal practices, cleanse themselves of their illegal workforce, and begin hiring employees who were authorized to work in this country (preferably, of course, native-borns). Yet this did not pan out; instead, employers scaled back legal hiring, and in many cases moved their business away from Arizona altogether. Apart from this, the other harsh immigration law known as the “Support our Law Enforcement and Safe Neighborhoods Act” or SB 1070, was so aggressive in its method and practice that it drove out thousands of immigrants from the state, thus lowering the state’s population stymieing the labor market, accelerating residential property price declines, and aggravating the already bad economic recession in the state.

According to the CATO report, “Arizona-style laws are economically destructive and inimical to growth…because the unauthorized immigrants who left the state took their business, money, and spending power with them, which reduced demand for the goods and services that unauthorized immigrants purchase in the state.” Moreover, the report stated “Arizona’s immigration laws drove thousands of renters of homeowners from the state, putting downward pressure on residential real-estate prices in the midst of a housing price collapse.” This study is not the first of its kind, however, so lawmakers were well aware of the economic consequences their laws were likely to bring about. In 2011 a study from the Center for American Progress (CAP) estimated that even if only half of SB 1070’s objective in removing unauthorized immigrants were achieved, the state of Arizona would lose $29.5 billion in labor income, $4.2 billion in tax revenues, and 581,000 jobs. The reason that CAP put forth in its study was very clear and simple: “when undocumented workers are taken out of the economy, the jobs they support through their labor, consumption, and tax payments disappear as well.” So simple is this reasoning, in fact, that it would be insulting to think that lawmakers—people of notable regard and a certain degree of intellect—had not thought about it before setting in motion the conniving plans they had for their immigrant population. There is absolutely no doubt that SB 1070 has dislocated and arguably wrecked the economy of Arizona, just as there is no question about the fact that these types of policies run directly counter to the interests of our nation, particularly now as we continue to endure this “Great Recession.” The instigators and lawmakers in Arizona wanted their “aliens” out, well that is exactly what they achieved, but it would be a mistake to frame this as a victory since all it did was leave the state with costly legal bills, a moribund economy that needs yet lacks the necessary means for resuscitation, all the while showcasing their acute xenophobia.

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