Photo: Alabama's Immigration Law Will Cost $2.3 Billion
The entry into force of Alabama’s harsh immigration law will result in losses of at least $2.3 billion to the state’s economy and destroy upwards of 70,000 jobs, according to a study released by the University of Alabama.
The analysis by economist Samuel Addy, director of the university’s Center for Business and Economic Research, says that HB 56, which entered into force in September 2011, “has been, and will continue to be, an economic disaster for the state of Alabama.”
“Instead of boosting state economic growth, the law is certain to be a drag on economic development even without considering costs associated with its implementation and enforcement,” Addy said.
“While the law’s costs are certain and some are large, it is not clear that the benefits will be realized,” he said in the report, which does not reflect the official position of the CBER.
The document says that by frightening immigrants out of the state, HB 56 will result in reducing demand for goods and services in Alabama.
Addy calculated that HB 56 will subtract $2.3 billion from the Alabama economy, the equivalent of 1 percent of the state’s GDP in 2010.
In the worst case, the losses could rise to $10.8 billion.
Supporters of HB 56 say that it will reduce unemployment in Alabama because the jobs that are currently performed by undocumented immigrants will be available to citizens and legal residents.
But the economist said that unemployment is rising in sectors such as agriculture, construction, hotels and restaurants, areas that usually hire undocumented labor.
Addy says that, by fostering a mass exodus of immigrants, HB 56 will cause the loss of between 70,000 and 140,000 jobs in Alabama, including positions that pay up to $35,000 a year.
The economist also debunked the myth that undocumented immigrants do not pay taxes, saying that HB 56 is already causing the loss of between $56.7 million and $264.5 million in state taxes.
That does not include the loss of local sales taxes of between $20 million and $93.1 million.
The losses, the study claims, are only making the budget situation worse in Alabama, and the figures do not include the cost of enforcing HB 56 or defending it in the courts.
Supporters of HB 56, including its co-author, state Sen. Scott Beason, have said that it is premature to attempt to determine the financial impact of the law.
Addy acknowledged that a long-term analysis of the impact of HB 56 on the labor market in Alabama is needed, but he emphasized that, for now, the figures indicate that the state’s recent job gains have occurred in areas that do not employ undocumented immigrants, including the public sector, finance, healthcare, education and professional services.