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Arizona Declares War on Capitalism

The most persistent misunderstanding about Arizona’s new anti-immigration law, SB 1070, is that it is about security. The law’s supporters argue that there is a war going on the Mexican border, and that violence is infecting Arizona. In reality, SB 1070 is about punishing American businesses. SB 1070 doesn’t create a state border security force. It doesn’t funnel state dollars to building a Great Wall of Arizona. It doesn’t magically stop illegal immigration in its tracks.

We hear a lot about property crimes involving illegal immigrants. Reports of them running across ranches and destroying rural property are rampant. While such instances do occur and should be prosecuted, crime rates in Arizona have been falling for years despite increasing numbers of illegal immigrants in the state, according to the U.S. Bureau of Justice Statistics.

For instance, the violent crime rate fell from 512 per 100,000 people in 2005 to 447 per 100,000 people in 2008—a 13 percent decrease. Meanwhile, the property crime rate fell from 5850 per 100,000 people in 2005 to 4291 per 100,000 people in 2008—A 27 percent decrease.

Illegal immigrants come here to work and live. They have to come illegally because the vast majority of them have no legal channel for entering the U.S. As a result, they avoid the police and typically avoid doing things that would attract the attention of law enforcement, like committing crimes. This phenomenon was first observed by the Dillingham Commission in the early 20th century and holds true today: Immigrants, including illegal immigrants, commit significantly fewer crimes than the native born on average.

So what does SB 1070 actually do? It assaults Arizona businesses. Sections 7 and 8 entrench and expand penalties for employers who knowingly or intentionally hire illegal immigrants. For a second such offense, the business owner’s licenses are revoked, permanently closing his business!

The Obama administration and the Democrats in Congress have been rightly criticized for rapidly increasing the size of government and de-facto nationalizing General Motors and large swaths of the financial industry, but they haven’t gone as far as Arizona in seeking to shut down small businesses.

SB 1070 essentially deputizes every business owner in the state into immigration enforcement. Employers already have to waste their valuable time verifying the immigration status of all employers using the faulty E-Verify system (which fails to detect illegals 54 percent of the time). Now, businesses are going to be further punished when they do what naturally comes to them: lowering costs and passing those savings onto consumers.

In a shaky economy with anemic growth and 9.7 percent unemployment, should Arizona further burden businesses across the state? Arizona was hit harder than most states by the housing bust and subsequent instability in the financial markets. The state has been struggling economically since 2008. The last thing the legislature should be doing is to attack the engine of future growth. If SB 1070 benefits anybody, it is Arizona’s trial lawyers. Section 2 gives legal residents the power to sue any state agency or official that implements a policy restricting the enforcement of immigration laws, if that resident feels that agency’s or official’s efforts are deficient.

Furthermore, SB 1070 virtually deputizes all state employees as immigration enforcement officers. Immigration laws are complicated and unwieldy so they require much training to properly enforce. Officials will likely make mistakes that violate the civil liberties of all Arizona residents—resulting in even more lawsuits.

SB 1070 attacks capitalism and subsidizes lawyers while pretending to attack the phantom scourge of an illegal immigrant crime wave. In terms of bad law, this is as bad as it gets.

Alex Nowrasteh is a policy analyst at the Competitive Enterprise Institute.

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Alex Nowrasteh is the immigration policy analyst at the Cato Institute's Center for Global Liberty and Prosperity.