The Economic Consequences of Anti-Immigration

Arizona was, depending on your views, the image of vulgar xenophobia if not blatant racism or a model "law and order" state earlier this year when it passed the nation's most harsh immigration law. Usually confined to federal statues, Arizona's state legislature passed SB1070 which gave police officers permission to ask for evidence of legal residency if they have stopped an individual for another purpose, such as traffic violation.

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The measure is intended to root out illegal immigrations and is supported by a majority of Americans and 70% of Arizonians. But there are serious objections, principally concerns over racial profiling. Roughly a third of legal state residents are Hispanics and the obvious question is: why would police ever ask a white man for legal papers? This almost promised indignation and humiliation for Hispanic citizens. Whatever the merits of the debate about illegal or undocumented immigration, Arizona's law was seen by many, especially and naturally Hispanics, as an extreme measure which would lead to undue racial profiling and was based on an ideology of hostility at its core and it usurped federal prerogatives to deal with immigration and not individual states. And it is not a practical solution to illegal immigration. On this premise, the federal government sought and got a judicial injunction against most of the law and it is as likely as not that the law will never be enforced. But the damage for Arizona's reputation and economic well-being has been done.

The people of Arizona may think they'd be better for it but their state will grow poorer, ceteris paribus, without the detested "illegals":

There are fewer concerts in the state because hundreds of singers and bands have joined in a boycott, called “The Sound Strike”. Business is also down sharply in the state’s convention industry. The Centre for American Progress, a think-tank based in Washington, DC, reckons Arizona has lost $217m in spending by conference visitors and $388m in economic output from cancellations and booking declines in this and the next two years.

Researchers at BBVA Bancomer, a Mexican bank, this month estimated that 100,000 Hispanics, mostly of Mexican descent, have already left Arizona, for Mexico or for other states, because of SB1070. ... Ethnic Mexicans, whether native or immigrant, are younger on average than Anglos, reducing the average age of greying Arizona’s population. And immigrants pay more in taxes than they send to Mexico in remittances. Above all, they tend to have jobs—on construction sites, in hotels and homes—that do not replace but complement American jobs, according to BBVA Bancomer. A permanent decline in the immigrant population could thus destroy many more jobs than just those of the immigrants.

Source: The Economist.