Immigration Laws Push Alabama Deeper into Poverty

 TRUSSVILLE, Ala. — The circumstances surrounding Alabama’s immigration law HB 56 don’t just affect the human rights of immigrants, as we’ve written in various editorials; they also put the state in an economic situation that could sink it even further into poverty. Alabama already ranks among the poorest states in the nation.

As Britton Bonner, chair of the South Baldwin County Chamber of Commerce, said, “The law needs to help businesses do business, and to the extent that it doesn’t help businesses do business, it’s not good. At this point, I’m not sure that it’s helping any.”

According to recent U.S. Census data, one in four children in Alabama is living in poverty. In 2010, 27.4 percent of Alabama children under 18 lived in poverty. The percentage in 2007 was 23.4 percent. The situation hasn’t improved; on the contrary, things are getting worse for the state’s poor. The 2010 figure is high even for a state that has been poor historically. 

The economic situation has forced new families below the poverty line. It leaves us to ask: How many more families will enter these sad statistics as a result of HB 56? 2011 hasn’t been a good year for many, and it has been even worse for Hispanic businesses that have had to do without their labor force as a result of a decline in revenue due to a substantial drop in sales.

You don’t have to be an expert in economics to know that the loss resulting from HB 56 – in both Hispanic businesses and the American businesses that work with Latinos -- will cause a shortage in income tax revenue and – contrary to its intended purpose -- an increase in unemployment. This isn’t because there aren’t Americans who want these jobs, but because there are no longer businesses to hire them. Many businesses have had to close down because of a drop in customers, or the owners are now doing the work that employees once did.

While Alabama struggles to get out of its low economic ranking, laws like HB 56 are further sinking the state’s economy and presenting a grim picture for all who live here. Families who have not traditionally been poor are now joining this group.

Alabama’s immigration law has already started to affect foreign companies. The recent arrest of a senior executive for Mercedes Benz and, more recently, the ticketing of a Toyota employee, are clear examples of the difference of the state climate before and after HB 56. 

Another case took place in October at the Gulf Shore National Shrimp Festival, where several Canadian suppliers who had worked in past years without a problem, could not participate this year as a result of HB 56. Under the new law, they weren’t able to be issued licenses because they weren’t citizens or permanent residents of the state. 

Some companies, like the Golden Dragon Precise Copper Tube Group, which had announced the construction of a $100 million plant in Tomasville that would have employed more than 500 workers, are putting their expansion plans on hold because of the new law. The message of Alabama’s new immigration law is to discourage foreign companies from investing in the state.

Let's see what one of the nation's leading consulants has to say. Mark Sweeney, senior principal of the firm McCallum Sweeney, advises world-famous companies on where to invest, listing among his clients Boeing, Caterpillar, Navistar, Mercedes Benz, Michelin and Shell. Companies call his firm when they are looking for a place to build a U.S. manufacturing plant, and his job is to help them identify locations to invest their capital. His firm is one of the world's most well-known site selection consultants.

Sweeney said that Alabama had every right to address the problem of immigration, but also said the law still has to be raised as an issue of concern for his customers, and "it is something that we will take into account" on future projects. The law is considered "the toughest in the nation" when it comes to illegal immigration. But since HB 56 took effect in September, it has had a series of unintended consequences. Among the most harmful of these, according to Sweeney, is the damage the law has done to the image of Alabama. "There is nothing good about it," he said.

Sweeney said companies decide where to locate plants based on a variety of factors, including labor costs, land availability, transportation, utilities and rates. But so-called "soft" elements also come into play, such as quality of life, business climate, schools and atmosphere. "Everything matters," he said. "It could come into play when you’re trying to make a final decision or it could eliminate a location from the beginning, because a manager says he does not want to put it on the list.” 

The harsh reality of Alabama, Sweeney said, is that the law could cause businesses to reject the state without ever giving it a first look. "The fear is, that you may be losing prospects you don’t even know," he said. "I'm sure that will be a problem."

You don’t need to be a great economist to understand the damage that a hasty decision by a few people has inflicted on many. Legislators, perhaps for lack of time, did not do a thorough analysis of the implications that a law like HB 56 could have. There is still room to correct errors, but we must also recognize that the damage has already been done and it will take time to recover the image of what once was our "Alabama the Beautiful."

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