Why Arizona’s anti-immigration law will hurt the state's economy

If SB1070 passes, the support immigrants provide to the local economy will be lost, causing falling productivity. The cost to ensure correct identification for every search or arrest will be also huge.

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    Julio Fierro Jr. of Tucson, protests Thursday, July 29 in Phoenix to rally against Arizona's new immigration law, SB1070. A federal judge delayed the controversial anti-immigration law Thursday, saying it violated the supremacy clause that reserves immigration to federal law. If law does end up going through, it could prove disastrous to Arizona's economy.
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US District Court Judge Susan Bolton has torn apart Arizona’s controversial anti-immigration law, due to take effect today, giving the power of stop and search without a warrant on suspicion of a person being in the country illegally. She said it violates the supremacy clause reserving immigration to Washington. It may also violate the fourth amendment, against unreasonable searches without a warrant. Naturally, Arizona disagrees.

Besides issues of law and liberty, there’s an economic elephant in the room. Up to 150,000 illegal immigrants in Arizona are involved in an underground economy, being paid cash-in-hand and untaxed. They do the odd-jobs no one else wants. Like California, the Arizonan economy relies on illegal immigrants for jobs Americans hate, whilst being paid next to nothing.

SB1070 creates two problems for our elephant. The black economy will disappear as illegal immigrants flee (numbers dropped by 100,000 since 2008). A myriad of unwanted jobs will appear that Americans will refuse to work. Only 8% of Americans don’t finish High School, rising to half of illegal immigrants. Let’s face it, what High School graduate wants to clean toilets? The support immigrants provide will be lost causing falling productivity.

Moreover, there’s the cost. If every Arizona policeman ascertains a person’s immigration status at every search or arrest, it will divert taxes to an issue which isn’t even a state matter. The cost to ensure correct identification will be huge, let alone the lawsuits by legal immigrants or citizens claiming these detentions are unreasonable.

Perhaps an amnesty on working illegal immigrants should be declared, or a fast-track to legality. The benefits of offering this to productive immigrants would extend from the provision of labour to enforcing taxation. Illegal immigrants contribute 55% of Arizona’s sales tax, and 500,000 more income taxes would be welcomed. Arizona even gains when spending is pitched against taxes from immigrants.

If the state persists with the measure it’ll have consequences to state funds, supply of unskilled labourers and public opinion. A Senate and Gubernatorial election are looming; Republicans have swung right on this issue, but activists won’t be happy with the costs.

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