Arizona’s Immigration Laws Have Stymied Economic Recovery

July 29 marked the anniversary of Arizona’s controversial immigration law, SB 1070, the state’s toughest attempt to target unauthorized immigration since the 2007 Legal Arizona Workers Act. Since then several states — most notably Georgia, South Carolina, and Alabama — have passed similar laws. However, Arizona has actually hurt itself by targeting unauthorized immigrants. Other states should learn from its experience before following it down the same path.

SB 1070 proponents claim that it decreased the unauthorized population in the state, and they’re probably right. But for that “achievement,” SB 1070 likely slowed Arizona’s recovery by increasing the regulatory burden for business and raising the cost of hiring all workers in Arizona.

Republican Gov. Jan Brewer vetoed slews of bills that would have reduced government expenditures and lowered taxes. The same poor fiscal policies prevailed in New Mexico. The difference in New Mexico is that it hasn’t passed immigration regulations that burden businesses.

Arizona’s economic growth has stalled, and the unemployment rate is at 9.3 percent — higher than both the New Mexico and national unemployment rates. New Mexico’s unemployment rate has been below Arizona’s since the beginning of the Great Recession.

The regulatory business burden of SB 1070 is its most damaging component. Sections 7 and 8 strengthened the 2007 Workers Act mandates that all businesses use the faulty E-Verify system. According to a 2010 audit from Westat, E-Verify fails to identify unauthorized workers 54 percent of the time and identified some legal American workers as unauthorized.

Fundamentally, Americans should not have to ask the federal government for permission to earn an honest living.

E-Verify has pushed unauthorized workers deeper into the black market. A 2011 report by the Public Policy Institute of California found that while Arizona’s 2007 workers law decreased the unauthorized population of Arizona between 2008 and 2009, it also forced tens of thousands “into informal or underground employment.”

SB 1070 enacted a two-strike policy through which second-time business offenders lose their business licenses for intentionally or knowingly employing unauthorized immigrants. This law championed by conservatives makes it harder for businesses to do what they are supposed to: lower costs and pass savings on to consumers. Called the business death penalty, it remains a potent economic weapon in the state’s war against private property and free enterprise.

Some immigration opponents have cited an immigrant crime wave to increase support for SB 1070. Yet when SB 1070 was passed, violent crime rates were lower than any point since 1971, and property crime rates were the lowest since 1966, according to Uniform Crime Reporting Statistics at the Department of Justice. The steepest decline of all has been for the murder rate, which in 2009 was lower than any year since 1965.

The U.S. economic slowdown and accelerated growth in Mexico have significantly reduced Mexican emigration to the U.S. But nations like India, China, and Central American countries will continue to send unauthorized immigrants in ever greater numbers. Our immigration laws need to adapt to that reality, not fight a quixotic battle against it.

After a year of SB 1070, the evidence shows that long-run solutions will come from expanding legal immigration for peaceful healthy people, not from crushing regulation. The federal government bears the blame for generations of bad policy that reversed America’s traditional free immigration policy. Lawmakers in Arizona — or any other state — cannot fix that, and they shouldn’t make the problem worse.