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December 15, 2009

How a New Jersey town lost one third of its population due to a crackdown

I came across this article dated April 18, 2008. Some of the loss of immigrant households mayt of course have been due to the economy. Nonetheless it shows the extent to which local areas can be economically heavily dependent on low-income immigrants.

A local governing board unanimously enacted a law which fines businesses for hiring and real estate owners from renting to illegal immigrants.

“A hamlet of about 8,000 situated across the Delaware River from Philadelphia, Riverside is just one of more than 30 small towns and suburbs across the country that have recently enacted immigration ordinances, including Escondido, Calif.; Farmers Branch, Texas; and Valley Park, Mo. At the same time, statewide laws that punish business owners for employing illegal immigrants have been passed in Arizona, Oklahoma, and South Carolina.”

The article in full:

How illegal immigration is dividing a town's business owners
In Riverside, N.J., a crackdown that drove away a third of the town's population has some businesses struggling to survive the loss.

RIVERSIDE, N.J. (FORTUNE Small Business) -- A barbershop quartet sings "The Girl From Ipanema" in Portuguese on a television dialed to a Brazilian satellite channel inside Pavilion Barbecue, where the air is piquant with the aroma of the house specialty, frango de churrasco - slow-roasted chicken braised in red chili sauce.

Three years ago Celeste Martiniano Martinez, a Portuguese-American immigrant, sank her life's savings into opening this restaurant in downtown Riverside, N.J. Business was booming until the Riverside Township Committee unanimously passed the Illegal Immigration Relief Act, which made hiring or renting property to an illegal immigrant punishable by a $2,000 fine and jail time.

Since then, immigrants have fled Riverside in droves, and now there are more chickens turning on Martinez's rotisserie than customers sitting at her tables.

Riverside has become a microcosm of the raging national debate over immigration. Local residents who feared that the character and culture of their town were being altered for the worse joined forces with local business owners who resented rivals who hired cheap, illegal laborers and avoided paying their payroll taxes and workers' comp. Together this group clashed with the many small-business owners, such as Martinez, who argue that without immigrants Riverside's economy would wither.

'I can't grow my business': Employers struggle to hire skilled foreigners

A hamlet of about 8,000 situated across the Delaware River from Philadelphia, Riverside is just one of more than 30 small towns and suburbs across the country that have recently enacted immigration ordinances, including Escondido, Calif.; Farmers Branch, Texas; and Valley Park, Mo. At the same time, statewide laws that punish business owners for employing illegal immigrants have been passed in Arizona, Oklahoma, and South Carolina.

When Martinez, 52, opened Pavilion Barbecue in 2005, the township was enjoying a renaissance sparked by an influx of immigrants who were drawn to the area by abundant construction and service-sector jobs. Their presence began to reverse decades of blight in Riverside. Boarded-up storefronts reopened as coffeehouses, minimarts, music shops, nail salons, pharmacies, and restaurants.

Hundreds of residents gathered downtown in February 2006 to watch a wrecking ball destroy the W.F. Taubel Mill, a decrepit hosiery factory that was once Riverside's largest employer. The crowd cheered as the mill was razed to make way for a condominium project located along the new state-funded light-rail line.

"Riverside, the tide is turning and you are on the way up," proclaimed state senator Diane Allen as the dust settled. "Riverside is going to be a shining star once again."

But not everyone appreciated the demographic shift. Some business owners resented the thousands of Spanish-speaking newcomers, 80% of whom were in the county illegally, according to estimates by local officials. Joey Vento, owner of Geno's Steaks, a landmark South Philly cheese-steak joint established in 1966, donated $10,000 to a legal fund set up to support the nearby city of Hazleton, Pa., which passed the country's first anti-illegal-immigration law just weeks before Riverside.

"Business owners who support illegal immigration are short-sighted and unpatriotic," says Vento, 67. "Plus, they're cheaters. Any business that has to depend on illegals to survive is not a legitimate business, period."

Vento spoke out passionately in favor of Riverdale's ordinance, and the town council agreed, passing it in July 2006. Since then, town officials estimate, as many as 2,500 immigrants, or nearly one-third of Riverside's population, have fled. Downtown merchants and restaurateurs report declines in revenue of as much as 70%.

"Business was good before - very good," Martinez says. "Now it's down 50%. Every day I pray, but it's an uphill struggle."

Ironically, the Riverside ordinance was never actually enforced. It was almost immediately tied up in court after 62 Riverside business and property owners filed a lawsuit claiming that the Illegal Immigration Relief Act was unconstitutional and improperly superseded federal authority.

"The law basically forced local business owners to become enforcers of federal immigration policies, which I didn't appreciate," says Ed Robins, 53, who opened a musical instrument and record store in downtown Riverside in 2005. "I took less than a 20% hit. But I opposed [the ordinance] on principle."

Riverside officials spent $82,000 in attorney fees, forcing the delay of road-improvement projects and repairs to City Hall. It then became the nation's first town to rescind an immigration ordinance, in September 2007 - but only after a federal judge had struck down Hazleton's law. (Riverside Mayor Robert Conrad declined to comment for this article.)
Seasonal worker shortage: The $20 carnival ride

More recently, three federal judges issued separate rulings that shifted the momentum in favor of local immigration laws. Last December a federal judge in Oklahoma threw out a lawsuit against a statewide law that forbids hiring illegal immigrants. In January a Missouri judge ruled in favor of a local ordinance passed in Valley Park, a suburb of St. Louis, that fines and suspends the business licenses of those who fail to verify employees' immigration status. Then, in February, a federal judge in Arizona upheld a law that suspends for ten days the business license of any employer who hires an illegal immigrant, and then revokes it permanently on the second offense.

Even though the U.S. Chamber of Commerce, local chambers, and other business consortiums, such as farm bureaus and restaurant and hospitality associations, have consistently rallied against such laws, 32 state legislatures are considering sanctioning those who hire illegal immigrants.

The Greater Oklahoma City Chamber of Commerce is now dealing with the fallout on its economy. It estimates that 20% of the city's construction labor force - about 2,000 workers - has left the city in the past four months. More than 70 businesses closed in the first two months of 2008 because many of their employees left the state. In Tulsa, sales at small businesses in Latino areas have dropped by about 50%, and the Tulsa Metro Chamber of Commerce estimates that 15,000 to 25,000 Hispanic workers have left the area since the law passed.

"The Tulsa region was outpacing the rest of the nation in job growth," says Mike Neal, president of Tulsa's chamber. "This law requires our businesses to police immigration through an erroneous system and harms the ability of Oklahoma businesses to grow."

Back in Riverside, officials estimate that a few hundred Brazilians have returned to the town since its immigration ordinance was repealed, maybe more. It's hard to measure the influx; now more than ever, immigrants are keeping to the shadows.

"I rent out a one-bedroom apartment. Sometimes I see four or five pairs of shoes outside the door," says Doug Bell, 50, owner of a Riverside discount store as well as a commercial painting business and a residential leasing agency. "Their standard of living is different than ours. It's just a question of, if they're here to stay, are they going to eventually rise to our standard of living, or are they going to bring us down? Right now, all I know is I'm barely making it, and the Brazilians are good shoppers."

Most business owners seem to agree on one point: The U.S. needs a uniform national policy on immigration.

Says Robin Conrad, executive vice president of the National Chamber Litigation Center, the public-policy law firm of the U.S. Chamber: "This patchwork of inconsistent requirements is not the answer and will have a negative effect on the economy." To top of page

December 6, 2009

How do illegal immigrants fit into the American economy?

The Migration Policy Institute issued in November a study of “The Economics and Policy of Illegal Immigration in the United States”, by Gordon H. Hanson of University of California-San Diego. Hanson is an expert in transnational immigration. Illegal immigrant workers, now numbering about 8.3 million, are mostly from Mexico and mostly have not completed high school. How do these illegal workers fit into the American economy? Hanson asks.

He writes that illegal immigrants add 0.03% to the gross domestic product, and cost 0.1% in educational and healthcare expenses (by far the leading economic burdens these worker households impose). This means they are a 0.7% drag on the economy, or about $10 billion. Border control expenses of the federal government is $9.5 billion.

He writes that they make up much of the ranks of poorly educated workers. “Over the last 50 years, the United States has raised the education level of its adult population dramatically. Whereas in 1960 half of US-born working-age adults had not completed high school, today the figure is just 8 percent….Forty- seven percent of unauthorized immigrants between 25 and 64 years of age have not completed the equivalent of a US high school education; they account for 20 percent of working-age adults in the United States with less than a high school degree.

“In 2008, they represented 25 percent of farm workers, 19 percent of building and maintenance staff, 17 percent of construction labor, 12 percent of employees in food preparation and serving, 10 percent of production labor, and 5 percent of the total civilian labor force.”

(These figures are from Jeffrey S. Passel and D’Vera Cohn, A Portrait of Unauthorized Immigrants in the United States (Washington, DC: Pew Hispanic Center, 2009).

December 4, 2009

Expanded auditing of American employers re: illegal workers

Expanded auditing by Feds of employer practices has become a facet of the Obama Administration’s approach toward enforcement of immigration laws. It has stepped aside from the show-boating by ICE during the Bush Administration. The New York Times ran an article last month on this evolving strategy.

Immigration Officials to Audit 1,000 More Companies

Published: November 19, 2009

WASHINGTON — Immigration enforcement officials said Thursday that they were expanding a program for auditing companies that might have hired illegal immigrants and had notified 1,000 companies this week that they would have to undergo such a review.

John Morton, who heads Immigration and Customs Enforcement, known as ICE, announced the new initiative, saying it was part of the administration’s plan to deal with companies that hire illegal workers. “ICE is focused on finding and penalizing employers who believe they can unfairly get ahead by cultivating illegal workplaces,” Mr. Morton said.

He said that because the program was a law enforcement operation, he would not identify the companies that would undergo an audit except to say that they had been selected as a result of investigative leads and their connection to public safety and national security.

The language suggests the audits will affect private companies involved in infrastructure operations like gas and electric utilities and contractors on military bases but not retailers and manufacturers of nonessential goods.

The announcement of the action appears to be part of a two-pronged strategy by Homeland Security officials to crack down on companies that regularly rely on illegal workers while simultaneously trying to reward companies that are diligent in checking the documentation of prospective workers.

At a separate event on Thursday, Janet Napolitano, the secretary of Homeland Security, urged American consumers to favor companies that make efforts to ensure that they do not hire illegal immigrants.

To that end, Ms. Napolitano said that her department was permitting companies that use a new computerized system to check the legal status of employees to feature a special logo on their products and ads saying “I E-Verify.”

The E-Verify campaign allows employers to match a prospective candidate’s name against a database that combines several government lists, including Social Security, passport and border information.

The first audit conducted by ICE covered 654 companies and resulted in the filing of formal notices to seek a fine from 61. ICE officials said they were considering seeking fines from an additional 267 companies from that first audit.

An audit consists of ICE officials checking each worker’s Employee Eligibility Verification Form, known as an I-9, to determine what steps were taken to confirm the person was eligible to be hired. If irregularities are found, the companies may then be fined for lax monitoring.

The strategy is part of the Obama administration’s effort to reduce illegal immigration by forcing companies to fire unauthorized workers rather than by conducting raids at the workplace, actions that are often accompanied by great personal trauma, including deportation and the dividing of immigrant families.

Representative Lamar Smith of Texas, a leading Republican on immigration policy, on Thursday sharply criticized the administration’s approach. Mr. Smith said it was unwise to end “worksite enforcement” actions, or raids.

“The most effective means we have of making these jobs available to American citizens and legal immigrants is U.S. Immigration and Customs Enforcement worksite enforcement actions,” he said. “Each time ICE detains and deports an illegal immigrant worker, ICE creates a job for an American worker.”

The audits, however, have resulted in large-scale dismissals at the hands of employers, leaving the government one step removed.

In September, American Apparel, a clothing maker with a large garment factory in downtown Los Angeles, fired about 1,800 immigrant employees — more than a quarter of its work force — after a federal audit turned up irregularities in identity documents the workers presented when they were hired.