Arizona’s Experience and the Tale It Tells

As always, my response to the WSJ story on Arizona’s economy post-illegal-alien crackdown, as it plunged from fifth to ninth of the states with the largest illegal population is delayed. I’ve been sick, there’s this whole election thing, and I write slow. But the whole article is perfect blog bait, touching on most of my favorite issues.

In brief, the article lays out a surprisingly even-handed examination of the impact. Arizona’s economy took a hit due to the law, legal unskilled employment declined slightly, and businesses catering to immigrants took a big hit. On the other hand…and there were a lot of other hands. The article hit big when it came out, but then mostly disappeared.

While the article was good at broad outlines, I found it frustrating in parts, as the reporters accepted a number of conditions at face value.

Government data on cost of non-citizens is, er, discouraged.

pinning down exactly how much [illegal immigration] costs the state, and how much is collected from illegal immigrants through taxation, is surprisingly hard to do…. and…government spending on immigrants fell. State and local officials don’t track total spending on undocumented migrants or how many of their children attend public schools.

So, for example, when Alabama tries to figure out how many illegal immigrants are attending public schools, a federal appeals court ruled the effort unconstitutional and the state was forced to abandon the effort in a settlement, because fear of registration “significantly deters undocumented children from enrolling in and attending school”. The citizenry can’t be allowed to know the impact of federal failure because the lawbreakers might be scared. (These same parents usually sign up for the migratory education act, of course, without fear.) About 1 in 20 K-12 students isn’t a native, but we only guess based on a census every ten years.

The government refuses to collect data on immigration costs, the better to fail to provide it. The government thinks it knows better than the people–not unlike certain political parties I could name. The courts give cover, pretending that immigrants might be afraid to demand services if we collect data on the services they demand.

I would like to see a reporter push on this point. Why can’t the citizenry get a clear number of certain expenses? How many children of illegal immigrants are receiving services? What level of proof is required to prove eligibility?

Instead, the reporters tend to shrug and talk about how hard it is to get data.

The easy hiring days of yore

This comment is incredibly revealing:

[Before the Arizona law, an employer said,] “I could pull out phonebooks where I had 300 or 400 guys’ numbers” to create working crew….[Now] “you have to put out feelers, buy ads, go on Craigslist, tap job agencies, just to get a few men….Growth is based on the ability to hire.”

The contractor is annoyed because he doesn’t have a ready labor supply. Yeah, dude, welcome to normal circumstances. ‘Twas ever thus. That’s why we have HR departments. That’s why in corporate America as well as the teaching world, bosses are often reluctant to fire. Finding workers is expensive and time-consuming. Employers that have to invest time and energy in finding employees tend to be reluctant to easily fire them.

But the flood of unskilled immigration has blinded the contractor to normal hiring conditions. He’s completely unmoored by the need to put even a slight effort into finding good employees.

The constant stream of cheap labor has atrophied some employers’ hustle and distorted their understanding of real world employment conditions. They’re so spoiled that they whine about having to use ads and Craigslist. Then they complain that they can’t get natives to do the same work, not even for slightly higher pay.

How is this bad news? Employers who can’t pay enough to make the jobs they offer worthwhile should have to work to find employees. They should not to get special visas for cheaper workers eager for life in easier America—much less hire illegal workers who politicians will then refuse to deport.

Employers don’t have a right to employees any more than employees have a right to jobs. Illegal immigration has utterly wrecked the mindset of entire industries: construction, agriculture, landscaping, hotels, restaurants. No one has the right to easy, cheap labor.

And yes, in many cases it may turn out that ending illegal immigration will end a lot of jobs , as Adam Ozimek once wrote. Many employers will automate, just as Rob Knorr the jalapeno farmer chose to do.

But the story does no comparison of these employer complaints to other industries, or ask if they’d invested in efforts to build up an employee pipeline. At no point do the reporters consider whether the employers’ expectations might be unreasonable.

Nor do the reporters follow up on the fact that illegal workers are still getting jobs.

“E-Verify is a problem for us,” Mr. Castillo [an illegal alien] said. “We can work for a week. It takes that long for the paperwork. Then we’re out.”

E-Verify needs to be more of a problem.

Bye bye immigration surplus

Economic activity produced by immigrants–what economists call the “immigration surplus”–shrank because there were fewer immigrants around to buy clothing and groceries, to work and to start businesses. ….In Latino neighborhoods, sales declined at grocery stores and other businesses catering to migrants.

Other stories document the hit taken by businesses catering to Hispanics. I wonder how much of the unskilled labor employment hit was connected to jobs lost due to the “immigration surplus”? If so, wouldn’t that be inevitable? Fewer immigrant grocery stores, fewer grocery store clerks. Population decreases mean fewer jobs.

I’m sorry, but ending illegal immigration will inevitably lead to a population decline, at least at first. “My business strategy is immigrant-dependent” is not a compelling reason to give up restriction. The nifty little Mexican market that makes awesome burritos will have to rely on gringo purchases. I’ll do my part, I promise. If Western Union has to close down 90% of its offices when remittances dry up, some people are going to lose their jobs, and the stock’s going to take a hit. I understand it’s hard on the stockholders and the job holders. But they can investigate business opportunities that don’t rely on criminal disregard for employment law.

I thought the article did a good job revealing this information, but shouldn’t the article have observed that any population drop will result in lost business?

An earlier study by Sarah Bohn et. al (the researchers quoted in the piece), Lessons from the 2007 Legal Arizona Workers Act, offers up another interesting impact caused by “immigration surplus”:

Many people assume that the lower skill workers who are affected by immigration are all white, or maybe black. But of course, many of them are Hispanic with a “skill” that white and black low skill workers lack: the ability to speak Spanish.

If employers can easily communicate with workers without translators, then job opportunities for translators are “immigration surplus”. I’m good with that, and the fact that some workers are hurt because Spanish-speaking is no longer a bonus is great news. Low-skilled Hispanics, blacks, and whites can compete on an equal basis.

Hispanic legal workers are hit not only because their legal status and bilingual abilities, but because of the restrictions themselves, something the LAWA research confirmed:

Translated, this seems to be saying that many Hispanics are here legally, but have trouble proving it, or decide to leave because they’d rather not prove it. This argument isn’t new, but it’s also not a reason to stop enforcing employment laws.

Real-estate agent Patti Gorski says her sales records show that prices of homes owned by Spanish-speaking customers fell by 63% between 2007 and 2010….At the Maryvale Market, in an immigrant community of ranch homes, Ashok Patel says his business is down by half since 2008.

Notice the name Ashok Patel? There’s also a Vietnamese owner quoted in the 2010 article, owner of a 99 cent story, too. Arizona’s Asian immigrant population is booming–and so Asian immigrants are complaining that Arizona’s enforcement is interfering with business.

If restricting illegal immigrants makes America less attractive to potential immigrants eager to come here and exploit lawbreakers, how is that a bad thing? I would have liked to see the story mention that legal immigration growth in Arizona has continued, and what industries or areas of business they dominate.

Fewer people, cheaper rent?

Wait, did someone mention occupancy rates?

If rental vacancies increase, don’t rents decrease?

Well, hey now. And take a look here, too: Phoenix Arizona Residential Rent and Rental Statistics . Graphs and tables, even.

Rents declined significantly during this period, probably because of the rental vacancies caused by Arizona’s law. There’s a significant point the WSJ article didn’t exactly play up.

So while low-skilled natives might not have all improved their employement prospects, many of them were able to live cheaper until they did find a job. Affordable housing for natives. What a concept.

Education. Remember education? This is a blog about education

State and local officials don’t track total spending on undocumented migrants or how many of their children attend public schools.[see what I mean about not reporting immigrant expenses?]…But the number of students enrolled in intensive English courses in Arizona public schools fell from 150,000 in 2008 to 70,000 in 2012 and has remained constant since. Schooling 80,000 fewer students would save the state roughly $350 million a year, by one measure. During that same period, annual emergency-room spending on noncitizens fell 37% to $106 million, from $167 million. And between 2010 and 2014, the annual cost to state prisons of incarcerating noncitizens convicted of felonies fell 11% to $180 million, from $202 million.

“The economic factor is huge in terms of what it saves Arizona taxpayers,” primarily on reduced education costs, says Russell Pearce [the law’s sponsor].

(emphasis mine)

Look at that. Reducing immigration saves money on education. The Arizona experiment proves that reducing immigration cuts immediate education costs–and that’s without factoring in the reduced pension burden.

Despite the usual GOP rhetoric about greedy teacher unions, merit pay, and ending tenure (blissfully absent this election, did you notice?), the Republicans have signed on whole hog for all the educational extras. High standards for all, despite remedial level students. Legally mandated special education and English Language Learner services.

All services are guaranteed to all students, citizen and immigrant, legal and illegal, courtesy of the let’s-keep-it-tied-up Supreme Court and Congress. All services are costly, and have very little evidence demonstrating effectiveness. And most of all, all those services require teachers.

Few folks outside the teaching “business” really grasp that hiring teachers is the pain point, not firing them. While the teacher shortage talk may be overblown, it nonetheless exists.

Teachers require higher than average IQs (particularly for high school academics), college degrees, clean records, verbal facility and a tolerance for young folk. Teaching offers inflexible schedule, limited potential for career growth, and work that’s utterly resistant to productivity improvement. On the other hand, it offers generous (read expensive) benefits, and really great pensions. Not as good as cops, but still. It’s a huge occupation; the largest in America. Yet despite the regular pay increases and job security, feeding the great maw of K-12 education requires constant replenishment. Schools are constantly in search of teachers in most states.

States could spend a lot more on our neediest citizens if they weren’t footing the bill for remediation, English language, tutoring, free lunches, and all manner of special education services for non-citizens.

Wouldn’t it be nice if unskilled labors were a little harder to hire, and skilled teachers a little easier to find?

Here’s hoping more states undertake Arizona’s experiment.