Immigrants and the Recession

August 26, 2011

“In times of economic downturn, like our country now faces, we begin to fear that which we do not know. And many choose to point the blame for our economic problems on immigrants,” said David Roefaro, mayor of Utica, NY, at last month’s hearing, “The Economic Imperative for Enacting Immigration Reform.” before the Senate Subcommittee on Immigration, Refugees, and Border Security.

The United States in the 21st century is clearly not the first, and is unlikely to be the last, society to blame outsiders for its economic problems. What’s important is that we identify the facts of the situation and ensure that they are considered when it comes time to establish policies.

 Despite the controversy surrounding nearly every aspect of U.S. immigration policy, the three witnesses at the hearing—mayors from New York, Georgia, and Maine—identified at least one area of consensus: every day, immigrants are making economic, social, and cultural contributions to the United States.

 Farm workers’ contributions, for example, begin with the work that they do to supply food for our tables. The rest of the economy benefits as crops are harvested by “skilled migrant farm laborers who have harvesting down to a fine art,” as Mayor Paul Bridges of Uvalda, GA, put it. Bridges said the direct contribution of agricultural workers to Georgia’s economy is $6.85 billion.

The direct contribution, though, is augmented by the taxes immigrants pay in their role as consumers. In Georgia and in every other state, immigrants pay the same amount of sales tax on every purchase as other customers, thus helping to pay for schools, transportation, and other public services. Other contributions to the state economy come from rent, mortgage payments, and property taxes.

Immigrants make a net contribution to the national economy as well, since they pay federal taxes and support Social Security, contributing up to $7 billion a year. Unauthorized as well as authorized immigrants pay into Social Security, even though the former will never receive a single monthly check.

In North Carolina, immigrants contribute more than $9 billion to the economy. Communities with a declining tax base that are having trouble surviving can get a badly-needed influx of vitality when immigrants arrive and start new businesses, buy homes, pay local taxes, and purchase consumer goods from local and regional markets. Immigrants also can enhance a city’s culture since they diversify activities and organize events that promote civic engagement.

Although these contributions should be evident, the position of immigrants is increasingly threatened by the enactment of anti-immigrant legislation at both state and federal levels. Some states have passed harsh anti-immigrant laws with far-reaching repercussions. Bridges, who has been an educator and farmer in his part of Georgia, spoke up at the hearing about the problems caused in more than one area of the economy and community by laws such as H.B. 87 (which, among other provisions, allows the police to check the immigration status of anyone suspected of a crime and requires businesses to use an electronic verification system before hiring workers).

One problem is that local law enforcement agencies are forced to use their scarce resources to implement the new laws. Often, police officers are not trained for these duties, which in any case take them away from their chief responsibility of protecting the community from crime. The new laws also contribute to a climate of fear for immigrants, both authorized and unauthorized.

The repercussions of anti-immigrant legislation such as that passed in Georgia are felt throughout the state as well as at the community level.  Immigrants have been driven out to more welcoming states; reportedly, this created labor shortages in Georgia of as many as 11,000 workers.

Shortages of farm workers can also lead to a domino effect:  crops worth millions of dollars are left to rot in the fields. Not being able to harvest and sell all their crops creates hardships for farm operators and their families and puts them at greater risk of defaulting on business and personal loans. Consumers, in turn, have to pay more for produce since it’s in shorter supply; for low-income families in particular, this often means less nutritious meals (since grocery budgets generally don’t increase just because food prices have). This carries consequences for productivity, both for individuals and the economy as a whole.

Georgia is just an example of what is happening as states try to fix the immigration system. Lifting up the economic and other contributions of immigrants, which are often left out of the immigration debate altogether, will be key to finding humane, fair, and practical solutions for the broken U.S. immigration system.

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