Critics: Economy could be devastated

Editor's note: This is the first in an occasional series of stories looking at recent changes in immigration regulations and their various impacts.

A new federal crackdown on illegal workers could have major impacts on local, state and national economies, even devastating the agriculture industry, according to Central Coast grower, worker and business representatives.

Food shortages, rising prices, evictions and foreclosures, layoffs, failed businesses, reduced school funding and a rising crime rate are just some of the impacts critics say could result from new procedures taking effect in mid-September.

While the crackdown is aimed at reducing illegal immigration, critics say the focus on employers will send ripples throughout the economy and society as a whole.

If enforcement is aggressive, some are predicting massive unemployment in the Santa Maria Valley and surrounding agricultural areas - with the potential for 10,000 agricultural workers to suddenly be without jobs.

“If they enforce this, it could definitely have a major impact,” said Richard Valencia, organizer for the Central Coast Chapter of the Mexican American Political Association, which represents the Latino community at large. “You could almost consider this catastrophic.”

Richard Quandt, president and general counsel for the Grower-Shipper Vegetable Association, agreed.

“It could create massive unemployment in this valley,” he said.

“The employers can kind of get a feel for the percentage of illegal workers, and in agriculture it may be over two-thirds of the workforce,” Quandt said. “You have about 15,000 farmworkers in the Santa Maria Valley, so that may mean 10,000 people are not eligible to work. I think that's going to have a tremendous impact here.”

Even more conservative business advocates say they see danger ahead, although they worry most business people have yet to realize the implications.

“I am in no way, shape or form in favor of illegal immigration,” said Andy Caldwell, executive director of the Coalition of Labor, Agriculture and Business. “In fact, I think our borders should be sealed.

“But I tell people to do the math,” he continued. “If there are 20,000 people who are (in the Santa Maria Valley) illegally, we can't fill those jobs if they're all gone. We simply can't do it.”

The changes

What's worrying labor and business people alike is not a change in the law but a more aggressive enforcement of laws already on the books.

The changes announced

Aug. 10 by Homeland Security Secretary Michael Chertoff, effective in 30 days, are aimed at penalizing employers for knowingly hiring illegal workers.

Chertoff said “the magnet that brings most economic migrants into this country is work. And if we have work site enforcement directed at illegal employment, we strike at that magnet.”

Employers, including labor contractors, generally have to assume the documentation supplied by workers is accurate.

Although the government offers a free online source for verifying some information, at least 29 types of documents are accepted on employment eligibility forms, commonly called I-9 forms, and many of those are not in the government's online database.

Until now, the Social Security Administration sent out letters to employers when the agency found discrepancies in workers' documentation, primarily Social Security numbers that didn't match names.

But there was little enforcement involved beyond that notification, which averages 130,000 letters a year.

Now, each of those letters will include another from the Department of Homeland Security giving employers 90 days to resolve those discrepancies.

If they aren't resolved, the employers are required to fire those employees or face criminal prosecution for knowingly violating immigration laws, and fines of up to $2,200 per worker for first offenses.

Critics note that while some discrepancies might result from fraudulent documentation, others could simply be a misprint or that a recently married woman failed to inform the government of her name change.

They say it can be difficult for employers to track documents that might have been submitted months before, it could take months to wade through red tape, and employers might fire workers rather than risk prosecution and fines.

All that is expected to kick in around Dec. 1, or 90 days after the Department of Homeland Security starts mailing letters - an estimated 15,000 a week.

Farmers could be especially hard hit because they would be forced to obey the law and watch crops rot, or harvest a crop and risk prosecution.

“So we find ourselves in a Catch-22,” Valencia said. “If we enforce the law, we'll definitely feel it locally and, even more, nationally and internationally.

“I don't see how, in all honesty, they can be enforcing this without damaging our economy,” he said. “This would pretty much mean the collapse of our agricultural business.”

Ripple effects

California picks, packs and ships half the vegetables, fruits and nuts grown in the United States each year. The growers rely on 225,000 year-round employees and nearly 500,000 in the summer.

Some labor contractors estimate 80 to 90 percent of the agricultural work force is illegal. But even the loss of half those workers could be devastating.

Quandt said growers - especially strawberry farmers - are already considering cutting back on their plantings next season, anticipating a lack of available labor for the harvest.

But Quandt, like many others, feels the impacts will be felt throughout the economy.

“It's not just farmers,” he said. “A lot of people in town are getting these letters who are not in the agriculture industry. You ask them, and they say, ‘Oh, no, we don't hire anyone illegal.' They just don't want to talk about it.”

Caldwell agreed that stepped-up enforcement will have an impact on other industries.

“More than half of the illegal aliens in America are in the nonagriculture sector,” Caldwell said. “In the major metropolitan areas, most of the immigrants are in the hospitality industry and service industry, like landscaping and domestic help, and in the garment industry. And there are a lot in construction.”

But regardless of the industry, critics say the impact will extend far beyond immigrant workers who are fired, because businesses hurt by a labor shortage will buy less, produce less and be forced to lay off other workers.

“You know, there are people who sell cardboard to the growers, people who sell them fuel, people who sell them fertilizer,” Caldwell said. “There are drivers, delivery people, people in accounts payable and accounts receivable, and all those jobs will be affected.”

The ripples could continue to spread. Tenants who can't pay rent could be evicted; property owners relying on rental income to pay their mortgages could face foreclosure.

The so-called underground economy could flourish, as employers pay workers cash “under the table” to avoid documentation issues.

Immigrants unable to find work might return to Mexico, pulling their children from schools that rely on average daily attendance for funding.

Desperate for money, immigrants who stay could turn to crime - prostitution, drug dealing, burglaries and robberies.

Without an adequate workforce to harvest crops, fresh produce could be in short supply, and retail prices would rise.

The big ‘ifs'

Of course, those are all worst-case scenarios. Whether such dire predictions come true will depend a lot on the level of enforcement.

“We don't know if they'll go into one area and enforce it broadly or if they'll enforce it across the nation,” Caldwell said. “If they (send out) 100,000 letters nationwide, no, it won't have a big impact on our area.

“If they send out 100,000 letters to agriculture in California, yes, it will. If they send out 1,000 to 2,000 letters in the Santa Maria Valley or even Santa Barbara County, it will have a tremendous impact.”

Chertoff is promising aggressive enforcement. But enforcement requires personnel and is costly, and some doubt the government will have or be willing to commit the resources for the promised campaign.

“I think they are probably going to enforce this minimally,” said Valencia. “They're going to make an example of a few employers so they can say, ‘Hey, this is what we're doing.'”

Caldwell thinks the move is President Bush's way of forcing Congress to move on immigration reform, which it has so far failed to do.

He likened it to the Old West, “when they used to shoot bullets at people's feet to make them dance. Bush didn't get Congress to pass immigration reform, so he's trying to make Congress dance right now.

“But I'm hoping he doesn't cause a train wreck before Congress gets down to business.”

Mike Hodgson can be reached at 739-2221 or mhodgson@santa

mariatimes.com. The Associated Press contributed to this report.

August 27, 2007