Report: Illegal immigrants boost Arizona economy

Sep 7, 2012, 7:30 AM | Updated: 7:30 am

WASHINGTON — A new report challenges the argument that illegal immigrants are a drain on Arizona’s economy.

In fact, said the author of “The Consequences of Legalization Versus Mass Deportation in Arizona,” the state could be throwing away millions in potential tax revenues by trying to drive illegal immigrants out.

“There is a real mass confusion and distortion on the reality of immigrant contribution,” said Raul Hinojosa-Ojeda, the director of the North American Integration and Development Center at the University of California, Los Angeles, and author of the report.

Hinojosa-Ojeda’s report for the Center for American Progress argues that if every illegal immigrant in Arizona were legalized, the state could gain up to $540 million in taxes every year. If they were all deported, on the other hand, it would cost the state $2.4 billion in sales, income, motor vehicle and other taxes, he estimated.

Supporters of stricter immigration enforcement wasted no time criticizing the report.

“These are based on a selective set of assumptions,” said Ira Mehlman, a spokesman for the Federation for American Immigration Reform. “I don’t know how he came to these numbers.”

FAIR has said that illegal immigrants cost the Arizona economy almost $2.6 billion in 2009 for schools, law enforcement, medical care and other costs. It said any taxes paid by illegal immigrant workers “do not come close to the level of expenditures” that state and federal governments have to make on their behalf.

Other immigration and economics experts were not as critical of the report, but said that the underlying assumptions for any immigration claims need to be taken into account.

“These are reasonable assumptions,” said Madeline Zavodny, a professor of economics at Agnes Scott College who has done research on immigration. “But you have to bear in mind that all such reports on something like undocumented immigrants require assumptions to be made.”

The U.S. Department of Homeland Security estimated that there were 360,000 illegal immigrants in Arizona in January 2011, up 30,000 from 2000. FAIR estimated the number at 390,000 in 2009.

Hinojosa-Ojeda based his report on estimates of total wages earned by immigrants, taxes they pay and gross state product they generate for the Arizona economy.

“Immigrants contribute heavily to the economy,” he said. “Advocates of mass deportation do not understand the scope of this contribution.”

Their contributions would be even greater if they were legally employed, he said, since they would likely earn more, pay higher taxes and consume more goods and services.

On the flip side, he said, a deportation effort of all illegal immigrants in Arizona would decrease total wages paid by $6.25 billion and lower the gross state product by $13.3 billion.

Hinojosa-Ojeda said the report — one of seven states studied by the center — aims to “strip away” misconceptions about the contributions illegal immigrants make. He said arguments that large-scale deportation will help the economy have “no basis in reality” and that advocates should stop cloaking their anti-immigration sentiments in economic arguments.

But Mehlman challenged the notion that the state economy would be hurt if illegal immigrants left. Just the opposite: He said U.S. workers would easily replace departed immigrants, wages would rise and less money would leave via remittances sent back to immigrants’ home countries.

“All jobs … Americans are prepared to take,” Mehlman said. “It is the wages and conditions that they reject.”

He said illegal immigration is what lets employers get away with such conditions.

But Hinojosa-Ojeda said no American is willing to do the work of an undocumented immigrant.

“Who is going out in the heat to work in the fields?” he asked. “The typical American will not do that type of work for that low wage.”

Michelle Mittelstadt of the Migration Policy Institute, said illegal immigrants occupy a part of the workforce that cannot readily be filled, the “3-D jobs: dangerous, dirty and difficult.”

“Immigrants are a complementary workforce, filling niches in the U.S. economy,” she said.

Zavodny agreed, saying people underestimate the dislocations a mass deportation would cause and that jobs would be left unfilled.

Mittelstadt agreed that currently illegal immigrants would be able to add to the economy if they were legalized. But she was dubious about the 100 percent deportation benchmark used in Hinojosa-Ojeda’s report, saying that would have a significant impact on industries such as agriculture and home health care.

She said that Congress has not demonstrated the ability to pass legislation on deportation.

“The idea of enforcement at a federal level in removal of workers in a sustained way is unlikely to happen,” Mittelstadt said.

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Report: Illegal immigrants boost Arizona economy