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Romney's Anti-Immigrant Stance Could Destroy the Nation's Economy

Romney's call for harsh 'self-deportation' policies like Alabama enacted in 2010 are an economic prescription for disaster.
 
 
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Mitt Romney’s leading claim to presidential fame—that he has the business acumen to fix the economy—may suffer as potentially blinding a setback as his trouncing by Rick Santorum in this week’s Republican primaries and caucuses in Colorado, Minnesota and Missouri.

Communities of color have been alarmed by his hardcore stance on immigration. The not-quite frontrunner applauds self-deportation and has called for an end to bilingual ballots, even while competing in Florida, Nevada, Colorado, and soon Arizona, states with many bilingual voters.

But in Alabama, where Republicans enacted landmark anti-immigrant legislation in 2011 with the goal of prompting illegal immigrants to flee, the policy that Romney is now championing is wrecking the state’s economy, concluded a report by the University of Alabama, which found that it is draining billions from Alabama’s economy, including millions in lost tax revenue.

"Economies are demand-driven, so any policy, regulation, law, or action that reduces demand will not contribute to economic development," said Samuel Addy, director of UA's Center for Business and Economic Research. "The law itself is costly mainly because it reduces demand in the state economy."

The UA analysis is based on economic principles taught to college freshmen, so simple that one would think Romney, who has a Harvard University business degree, would know: when you drive wage-earners out of the state, businesses suffer. The UA report’s conclusionis stark and striking, especially when you consider how fragile Alabama’s economy is.

 

“Assuming that the law causes 40,000-80,000 unauthorized immigrant workers who earn $15,000-35,000 a year to leave the state,” it concludes, “the resulting decline in aggregate demand would have annual economic and fiscal impacts of reductions of about (i) 70,000- 140,000 jobs with $1.2-5.8 billion in earnings, (ii) $2.3-10.8 billion in Alabama GDP or 1.3-6.2 percent of the state’s $172.6 billion GDP in 2010, (iii) $56.7-264.5 million in state income and sales tax collections, and (iv) $20.0-93.1 million in local sales tax collections."

Romney’s embrace of such radical and destructive economic policy undercuts his oft-repeated claim that he can fix the nation’s economy—unlike Obama. It remains to be seen if Romney and his allies will have a tough time championing their draconian views on immigration as more Americans learn that their hardline seems to be decimating Alabama’s economy.

 

What Happened In Alabama?

After Arizona enacted landmark anti-immigration legislation in 2010 to identify, prosecute and deport illegal immigrants, a handful of other states followed suit. Alabama House Bill 56 was the toughest of them all, making it a crime for anyone undocumented to be in the state. It ordered local police to examine the papers of anyone officers thought was illegal. Beyond that, the law requires schools to check the legal status of all students, invalidates contracts made with undocumented persons (including apartment leases), and makes it a felony for illegal immigrants to deal with government agencies like public utilities.

As soon as Republican Governor Robert Bentley signed the law, it had an immediate and chilling effect. Self-deportation began quickly. Roofers and road workers, landscapers and laborers, and others streamed out of Alabama taking their families with them. Farmers discovered they could not harvest crops because migrants moved away. Alabamians did not want to replace them in hot, muggy fields. And schools reported high rates of absenteeism among Hispanic students, many of whom never returned to class.

Some parts of the law were put on hold by the courts and many of its original supporters changed their tune. State lawmakers are rushing to make changes to the bill but Republicans and Gov. Bentley vow the overall intent of the law will survive. Republican State Representative Jim McClendon says regular statewide polling proves the public is solidly behind the law.

“Eighty percent of the people in Alabama support that immigration bill," McClendon told the St. Clair Times, “and I think the other 20 percent work for the media.”

Another state rep, Republican Kerry Richard, told the paper the anti-immigrant law has reduced unemployment in his home district by some 3 percent since it took effect. With illegals gone, Richard told the St. Clair newspaper that Alabamians are now lining up for jobs once held by the undocumented.

But at what cost, Alabama?

The January 31 studyby University of Alabama economist Samuel Addy outlined the economic disaster the law has caused. The law caused 40,000-80,000 undocumenteds to flee the “Heart of Dixie.” That has created an ancillary effect, resulting in the evaporation of some 140,000 jobs across the state and an estimated loss of $10.8 billion in Alabama’s Gross Domestic Product. Beyond that, the Addy study estimates that state income and sales taxes will fall anywhere from $57 million to $265 million in the coming year. And these figures do not include policing and law enforcement, which will additionally drain state coffers.

The study’s author wrote that instead of improving economic growth, “the law is certain to be a drag on economic development.” And while some already dispute these findings, most agree Alabama cannot endure such a steep financial free-fall this year and for years to come.

So some Alabama Republicans have decided to face facts. They say they will make changes to their controversial bill, formally known as the Beason-Hammon Alabama Taxpayer and Citizen Protection Act, to make it better and to overcome the legal challenges still pending in federal courts. Democrats and others say the law actually doesn’t help or protect Alabama. Instead it hurts the state. One Democrat lawmaker has filed legislation to repeal the immigration law but expects it will be a chilly day in August before that ever happens.

 

Economic Reality vs. the Campaign Trail

The projected pain in the Yellowhammer State may also be felt in other states, also impacting their economies negatively. That’s not good news as the nation’s economy continues to sputter. But these hardcore realities don’t register with Republican hardliners running for president. Even as this election year gets more interesting, there is virtually no chance that Congress or the president will have the courage to tackle the illegal immigration issue, let alone deal with it. That’s why several more states are debating immigration legislation and it’s why the GOP candidates feel free to talk tough on it, at the financial expense of some states.

Many find Romney’s position confusing and troubling. And it certainly puts him at odds with his own faith. The Church of Jesus Christ of Latter-day Saints supported legislation in Utah last year allowing for “guest worker” permits to keep illegal workers in the state. And the Mormon Church supported what’s known as the Utah Compact, which criticizes deportation policies that cause family breakups. The Compact also calls for the humane treatment of immigrants. Romney brazenly opposes any plan that creates a path to citizenship for illegal workers. Even the self-avowed conservative Newt Gingrich has shown a slightly softer side on immigration—although he too would end bilingual ballots.

Immigration could still become a compelling 2012 campaign issue, even though politicians from both parties try to avoid it. Los Angeles’ Democratic mayor, Antonio Villaraigosa,attacked Romney’s position in a speech Wednesday before the National Association of Latino Elected Officials.

Now that it has been unequivocally shown that immigration affects jobs, incomes and state treasuries, the matter may get more discussion, although no one will do anything about it. And hardline Republicans may have to choose: their views may cheer the Tea Party and the far right but they may alienate millions of other voters in the process. In a close election, their hardline may be the wrong line.

George Bauer is a print and broadcast journalist living in Atlanta, Georgia.