It’s working! Departure of Arizona illegals affecting businesses

Interesting that they’re not afraid to break federal law by staying in the country illegally, but the new state law has them on the run. As usual, the Phoenix newspaper tries to paint this as a tragedy, ignoring the fact that these people are violating our laws by being here.

by Daniel González – Jun. 29, 2010 12:00 AM
The Arizona Republic

Luis Sanchez and Marlen Ramirez, undocumented immigrants from Mexico, packed up and moved to Pennsylvania this month, taking their three U.S. citizen children with them.

Many will cheer their departure, saying it’s a sign that Arizona’s new immigration law, which hasn’t taken effect yet, is driving out illegal immigrants and potentially saving the state money. But not everyone is pleased over the exodus of Latinos, both legal and illegal, saying their flight from Arizona could hurt businesses, schools and neighborhoods.

“It’s basically running us out of business,” said Rollie Rankin, 62, of Peoria, who owns several apartment buildings in Surprise, including the one where Sanchez and Ramirez lived with their children. Most of his renters are from Mexico, though Rankin does not ask about their immigration status.

Rankin said seven families have moved since Gov. Jan Brewer signed Senate Bill 1070 on April 23. The families told Rankin they were leaving because of the law. Four of the families moved to Pennsylvania, among them Sanchez and Ramirez and their three children. Another family moved to Tennessee. Two other families moved to Mexico, Rankin said.

“People are scared,” said Rankin, who opposes the law. “They have had enough of the crackdown. Back in the old days, it was a wink and a nod; there was tacit approval that they were here. Now, it’s an open attack.”

Arizona’s immigration law makes it a state crime to be in the country illegally. It states that an officer engaged in a lawful stop, detention or arrest shall, when practicable, ask about a person’s legal status when reasonable suspicion exists that the person is in the U.S. illegally.

The law takes effect July 29. But many immigrants aren’t waiting. Scores already have left. Some headed to other states, and some are moving back to Mexico.

Supporters say their departure will save the state money because taxpayers won’t have to cover the cost of education or social services for their children, including those of Sanchez and Ramirez, who were on the Arizona Health Care Cost Containment System, the state’s health-care program for indigents. But the effect of illegal immigrants leaving Arizona is not that clear-cut.

Some school districts that serve large immigrant neighborhoods already have seen sharp drops in enrollment. That could save the state money but hurt individual schools because every student equates to $4,404 in per-pupil state funding. Analysts say the flight of illegal immigrants also could lead to a loss of sales tax and other revenue. And their departure is hurting the apartment complexes and stores where they live and shop.

Latinos represent a huge and fast-growing market. About one in three people in Arizona is Latino, and about 40 percent are 17 or younger. In Arizona, Latinos accounted for 16 percent of all purchases in the state, or $31 billion in spending, according to a report by the Arizona Hispanic Chamber of Commerce.

Business dwindling

Rankin said he is having trouble renting the empty apartments because many families are waiting to see if the law survives legal challenges. If the law takes effect on July 29, he expects more families to move out.

Rankin said the law comes just as the housing market was starting to improve. He bought seven four-unit buildings in 2001. He lost one building to foreclosure in May and another at the beginning of June. He fears he will lose more buildings if he keeps losing renters and can’t pay the mortgage.

“We are probably going to lose the whole thing,” Rankin said.

Throughout the neighborhood, many businesses that cater to Latino immigrants also are taking a hit.

Gloria Mayorja, 65, of Peoria, goes door to door selling homemade churros. She was selling 140 a day before Brewer signed the law. Now, she is selling only 50 or 60.

“People are leaving, so they don’t want to spend any more money,” Mayorja said.

Kim Nuu, manager of a 99-cent store on Dysart Road in Surprise, said most of his customers are Latino immigrants. Sales are way down.

“In December, we are closing,” he said. “We aren’t making enough money to pay rent. I don’t know why, but business is slow.”

‘Efficient economy’

State Rep. John Kavanah, R-Fountain Hills, who sponsored the House version of SB 1070, predicts the departure of illegal immigrants will reduce the cost of government.

Kavanah cited a study by the Federation for American Immigration Reform, an organization in Washington, D.C., that pushes for reductions in immigration, legal and illegal. The organization estimates that the total education, medical and incarceration costs in Arizona because of illegal immigration are more than $2 billion a year.

Illegal immigrants tend to work in low-paying jobs and therefore pay less in taxes than the cost of government services such as public education, AHCCCS and food stamps that they and their families consume, he said.

He also predicts that the state’s unemployment rate will go down as illegal workers are replaced by unemployed Americans. Arizona’s unemployment rate was at 9.6 percent in May, according to the Arizona Department of Commerce.

Kavanah acknowledged, however, that some businesses will suffer. He said those business are “victims of illegal immigration” because they tapped into a market that was artificially inflated by the federal government’s inaction over controlling illegal immigration.

“If there are a few pockets of economic activity that will suffer, that is unfortunate, but I am sure that if their business is worth having because there is a demand for it, then they will survive,” Kavanah said. “If their business isn’t worth having because there is no demand for their services, then their business will go away. But that is the way it is supposed to be in an efficient economy.”

Not a fiscal burden

Judith Gans, manager of the immigration-policy program at the University of Arizona, agreed that some American workers may benefit by illegal immigrants leaving the state. And she agreed that illegal immigrants tend to consume more services than what they pay for in taxes because they work in low-paying jobs. But low-skilled legal workers also consume more in services than they pay for in taxes, she said. If anything, she said, replacing illegal workers may increase government costs because legal workers are entitled to social services that illegal immigrants don’t qualify for.

“If we fill all of those jobs with legal, low-skilled, native-born workers, the fiscal burdens don’t change. It’s inherent in the job itself, not in somebody’s immigration status,” she said. “It’s sort of a myth that if these illegal immigrants weren’t here these fiscal burdens would somehow magically change.”

The state also will lose the sales taxes paid by illegal immigrants, she said.

Sanchez, who moved to Pennsylvania with his family this month, worked in Arizona as a landscaper and gardener. He got his job using fake documents and paid income taxes as well as sales taxes. He also paid property taxes indirectly through his rent.

He said he knows supporters of the law are glad to see undocumented immigrants like him leave. But he doesn’t think he will be easily replaced.

“We work outside under the sun during the really hot weather,” said Sanchez, who made $9.80 an hour. “This work doesn’t pay very well, and it’s very hard work. This is the kind of work that almost all the undocumented do because no one else wants to do it. They say that we are taking away jobs, but it’s a lie. These jobs doing yard work – no one wants to do them.”

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