Alabama Has Thrown The Baby Out With The Bath Water

If I were living in Alabama, which I’m not, I’d probably be among the many Latinos of that state who are packing their tiliches (stuff), pulling their roots and moving out.  Come to think of it, if I were a forward-looking and concerned entrepreneur of any culture, race or ethnicity I’d be doing the same thing. The state of Alabama’s fiscal health is bad, and given the newest and harshest immigration laws that went into effect this month, it’s going to get worse.

A quick survey of Alabama’s economic health: The Kaiser Family Foundation says it’s in distress. It ranks second in the nation when it comes to forclosure rates, unemployment change, and food stamp participation. The state government faces a 12.3% budget shortfall for 2011.

The Econommist, though, has a more optimistic take on the future of Alabama’s economy:

In a ranking of 378 American metropolitan areas by job-growth prospects conducted by Moody’s Economy.com, Mobile ranked 12th. Three regions in Alabama finished above it: Huntsville and Auburn-Opelika ranked first and second, and Columbus-Phenix City, which straddles the Georgia border, ranked seventh (the state’s two largest cities, Birmingham and Montgomery, ranked 83rd and 22nd).

Stay with me on this. Take those two numbers and compare them to the expected impact of the immigration law, as projected by the Perryman Group in 2008 and reported by immigrationpolicy.org:

…if all unauthorized immigrants were removed from Alabama, the state would lose $2.6 billion in economic activity, $1.1 billion in gross state product, and approximately 17,819 jobs, even accounting for adequate market adjustment time.

So, Alabama is not so well overall, but there are pockets of urban growth and economic well being. But if Latinos were to leave the state and take their $3.1 billion purchasing power away, the state would be on the skids.

According to immigrationpolicy.org, families headed by undocumented immigrants in Alabama paid $130,298,333.00 in state and local taxes in 2010. There’s more. The U.S. Census reports that in 2002 there were 2,524 Latino owned businesses in Alabama with sales and receipts of $747,973,000. Those businesses employed 6,741 workers, mostly in construction, retail, professional and educational services.

Fast forward to 2011 and the effect of removing undocumented workers from Alabama would be devastating. Americans for Immigration Reform calculated the fiscal blow like this:

Expenditures Gross Product Personal Income Employment
($2,585,043,796) ($1,148,105,456) ($720,086,050) -17,819

 

Do you get the feeling that the good folks in Alabama didn’t think this immigration law thing through?

Immigrant scapegoating is an historic and expected reaction in troubled economic times. That doesn’t make it right, neither is it the best economic policy. Fiscally, Alabama would have done better than to throw the proverbial baby out with the bathwater. Maybe they didn’t know it, but they may soon find out.

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