Panelists say immigration law will hurt Alabama economy

Alabama-immigration-march-0625-11.jpgMarchers leave Linn Park during a silent protest of Alabama's new immigration law in Birmingham, Ala., Saturday, June 25, 2011. (The Birmingham News/Mark Almond)

BIRMINGHAM, Alabama -- Alabama's economy and businesses will be hurt by the state's new immigration law, as it creates a "regulatory tax on businesses" that will be forced to comply, a Birmingham economist told a roomful of people during a panel discussion at the Birmingham International Center tonight.

Jeremy Thornton, an economics professor at Samford University's Brock School of Business, said the state's construction and agricultural industries will be hurt worst. He said the law is one of the "rare examples" where there is no economic benefit, only setbacks.

"The state will be poorer because of this bill," he said during an interview after the three-person panel discussion.

The panel was the first in a series hosted by the Birmingham International Center and was meant to answer questions as to how the law will affect businesses, law enforcement, municipalities, and individuals.

Stephen Pudner, an attorney at Baker Donelson and moderator of the discussion, said the event was meant to answer questions about the bill, not to promote any political agenda. Others on the panel were Johnston Barton Proctor & Rose LLP attorney Dara Fernandez and John Jenkins, deputy director of the Alabama Department of Homeland Security. Initially, each panelist talked for about 10 minutes about their area of expertise on the law.

During his presentation and also during the question-and-answer session during the second half of the event, Jenkins explained many of the details of the law and how it will be enforced. He said Alabama officials will not have the final authority over determining whether a person is an illegal immigrant or not. That will be up to federal officials.

Fernandez explained how businesses will be held responsible for verifying that their employees are eligible to work in the United States or face penalties such as fines and having their business license suspended.

One of the audience members was Hoover Mayor Tony Petelos, who said he came to get some questions answered for how the immigration law affects cities. However, he said he left the event with more questions than answers.

"As a city, what will we do when issuing permits and licenses?" Petelos said.

Thornton said there are assumptions that enforcement of immigration law will provide jobs for out-of-work Alabamians. However, that's known as the "lump of labor fallacy," which refers to the idea that there is a fixed number of jobs. However, he said that's like saying a football team can only score a certain number of points in a game.

Thornton said the law would actually distort the state's labor markets and deter businesses from hiring otherwise qualified workers. It could also cause the state to lose tax revenue, as businesses decide to go underground rather than face regulatory burdens.

"A lot of these businesses are going to simply go off the books," he said.

To read the new law, go here.

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