On Monday, Federal District Judge Sharon Blackburn temporarily enjoined Alabama’s controversial immigration law (HB 56) for one month, to have enough time to address the numerous challenges to the law. Regardless of its constitutionality, HB 56 is decidedly bad news for Alabama, penalizing businesses and farmers in a struggling economy.
Read the language. Section 15 sets out punishments for employers who knowingly or intentionally hire undocumented workers. For a first offense, the employer must fire all undocumented workers, sign an affidavit promising not to repeat the infraction, and have his business licenses suspended for 10 business days.
For a second offense, the government will revoke all of the business’s licenses and permits needed to operate in the location where the offense took place. For a third offense, the government permanently revokes all of the business' licenses from all of its locations.
If that sounds like an egregious attack on entrepreneurship, that is because it is. If a small business with one location commits a second offense and hires an undocumented worker, all of its business licenses are permanently revoked, thus shutting down that business and destroying someone’s livelihood. For a third offense, an entire chain of stores could be destroyed, throwing numerous Alabamans out of work.
Businesses aren’t the only ones affected. Farmers in Alabama will be devastated by HB 56. Alabama’s farming industry accounts for more than $5 billion a year, and undocumented immigrants are a major source of labor. In neighboring Georgia, which passed a law similar to HB 56 earlier this year, farmers face severe labor shortages. The Georgia law scared off low skilled farm workers and now the state’s farmers are suffering.
Continued shortages of workers in South Georgia could put at risk $300 million of fruits and vegetables already planted, according to the Georgia Fruit and Vegetable Growers Association. Much of the agriculture industry depends on low skilled workers, and many farmers cannot raise wages significantly because they have low profit margins to begin with. For many of them, it makes more sense to stop planting than to pay higher wages.
Georgia tried to get around the agricultural labor problems by conscripting criminal offenders and probationers to work in the fields. The probationers could keep not pace with the Hispanic workers, reported Fox News. On one cucumber farm the fastest probationer filled only 134 buckets a day. Some filled as few as 20. Many of the Mexican and Guatemalan laborers filled 200 buckets before lunch.
Benito Mendez, crew leader for a group of Mexican and Guatemalan pickers said that his experience with the probationers and criminals was so bad that, "It's not going to work . . . No way. If I'm going to depend on the probation people, I'm never going to get the crops up."
As George Mason University economics professor Alexander Tabarrok observed, “[Georgia] turned good workers into criminals and turned criminals into bad workers, losing on both ends of the deal.”
In Alabama, the state agriculture commission says squash, tomatoes, and other produce are rotting in the fields for lack of workers who are fleeing ahead of HB 56. If it is upheld, the problem will worsen.
Construction is another industry in Alabama that is getting pummeled by HB 56. James Latham, chief executive of WAR Construction Inc., in Tuscaloosa, is concerned that the exodus of undocumented workers will slow down his construction projects. He told the Wall Street Journal, "We are seeing smaller crews, and work taking longer to get accomplished, due to less available workers." Latham is also president of Alabama Associated General Contractors and said that his business isn’t the only one affected.
America’s economy is suffering mightily with an unemployment rate above 9 percent. Many economists think we are on the edge of a double-dip recession if not already suffering through it.
Immigration rules and restrictions like Alabama's HB 56 make things worse by targeting the business that are the engines of economic growth and job creation.
Alex Nowrasteh is a policy analyst at the Competitive Enterprise Institute.