The economic impact of the foreign born in Arizona

This article published in the Arizona Daily Star on July 31st reveals some surprising facts about foreign born workers and their economic impact on the State of Arizona. It is surprising to read that some 920,000 foreign born workers live in Arizona; about 13% of the population. A far greater share of these, 71% are of “working age” compared to 47% of the general population. The foreign born command purchasing power of $16B with income of $21.4B. The undocumented of these have income of $3.5B and spending power of $3.1B. Since wages reflect value added at the point of production it is accurate to state that these foreign born added more value to the state than they were paid; a counter point to the assertion that undocumented workers are a drain on the economy.

It was discovered that the foreign born paid $1.7B in state and local taxes in 2014, the year studied and the latest year these statistics were available to researchers at the New American Economy; the group that conducted the study commissioned by the Arizona Chamber. The vast majority of these workers are employed in low skill, low pay, hard conditions jobs. They make up 32% of janitors and building cleaners, 50% of landscaping and grounds maintenance people and 55% of maids and housekeepers, according to the article.

In agriculture, the undocumented, according to US Chamber of Commerce Vice President Randy Johnson, make up about 60% of the workforce. “…Johnson said any federal legislation to require employers to electronically check the legal immigration status of their workers is dependent on farmers and others being able to get the laborers they need in some way,” according to the article. “Let’s just say it: They can’t work without undocumented workers in the workforce,” he said. When pressed about low wages and harsh conditions being the reason US born workers will not do those jobs, Arizona Sen. John McCain was quoted from a speech in which he claimed US workers would not do the work for even $50/hr. This assertion has not been tested that I know of.

The US Chamber, according to VP Johnson supports efforts to “legalize” the undocumented in some fashion. Johnson derided the I-9 system that allows employers to hire people with documents other than green cards “with a wink and a nod” as employers simply “verify the legal status of workers by logging in documents they present, a system that is generally considered to be rife with loopholes and people using forged and stolen papers”, according to the article. Johnson wants the undocumented in the US to be allowed to remain legally subject to a background check. He does not offer more details about what that legal status would entail.

An obstacle to the desire of the US and Arizona Chamber was provided by Arizona State Senator Noel Campbell. “We have to have the border secured first,” said Campbell who worked for 27 years for U.S. Customs and Border Protection, reflecting the views of many within his party,” according to the article. Rep. Campbell must know that most undocumented people in the USA came here legally and overstayed their visas; not by slipping across the border.  This article from the New York Times shows that in 2013 about 250,000 overstayed while about 150,000 crossed illegally. Even though Campbell admits the “border will never be 100% secure” he insists the border must, nevertheless be secured before any comprehensive path to citizenship or other form of legal work status can be granted, in his view.

Since the case has been made that millions of jobs done by undocumented workers would not be done by American born workers then one can conclude that bringing these working people out of the shadows to the light of government labor regulations and protections would allow them to add even more productive value to the economy and boost the revenue to the Social Security system along the way.