New Law Reduces Demand for Illegal Immigrant Labor

by Sean Hackbarth

There’s a lesson to be learned from Arizona’s new illegal immigration law: incentives matter. Increase the costs to employers who hire illegal aliens and you will reduce the demand for them. That will force them to go somewhere else:

Undocumented immigrants are starting to leave Arizona because of the new employer-sanctions law.

The state’s strong economy has been a magnet for illegal immigrants for years. But a growing number are pulling up stakes out of fear they will be jobless come Jan. 1, when the law takes effect. The departures are drawing cheers from immigration hard-liners and alarm from business owners already seeing a drop in sales.

It’s impossible to count how many undocumented immigrants have fled because of the new law. But based on interviews with undocumented immigrants, immigrant advocates, community leaders and real-estate agents, at least several hundred have left since Democratic Gov. Janet Napolitano signed the bill on July 2. There are an estimated 500,000 illegal immigrants in Arizona.

Some are moving to other states, where they think they will have an easier time getting jobs. Others are returning to Mexico, selling their effects and putting their houses on the market.

The number departing is expected to mushroom as the Jan. 1 deadline draws closer. After that, the law will require employers to verify the employment eligibility of their workers through a federal database.

Arizona’s economy will adjust, and that could be a painful process. It’s not easy or cheap for businesses to find new sources of labor or to reorganize their business processes to include labor-replacement technology. However, that state has endured great stress from illegal immigration.

Arizona’s example gives us some anecdotal evidence that a “security first” policy can reduce illegal immigration in a state.

Migrants Fleeing as Hiring Law Nears” [via Captain's Quarters]

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