The Arizona immigration law is terrible public policy, which hurts economic growth and infringes upon individual liberty, but it is probably constitutional.
The Supreme Court case is simply about the boring and rather technical legal question of preemption; the Justices will not consider the most damaging portions of the Arizona immigration law. The two economic penalties enhanced by Arizona’s immigration law apply to everyone regardless of race and are unfortunately constitutional according to last year’s Chamber of Commerce v. Whiting decision. They are the mandatory E-Verify provision and the so-called business death penalty that first became law thanks to the 2007 Legal Arizona Workers Act, popularly know as the “employer sanctions law.”
First, Arizona’s immigration law enhances a mandatory E-Verify provision that requires all Arizonans to ask the federal government for permission prior to hiring. E-Verify is mostly ineffective at detecting unauthorized workers and falsely labels about 1% of legal Americans as unauthorized workers. Solving that government error can take months and sometimes require a Privacy Act Request that takes 104 days. Consequently, E-Verify is not being used for roughly 30 percent of new hires in Arizona, moving some of that state’s workforce into the informal economy.
Second, the Arizona law strengthens the so-called business death penalty. It’s a two-strike policy where second-time business offenders that hire an unauthorized worker have all of their business licenses revoked, essentially killing the business. This provision also makes investors and entrepreneurs avoid Arizona or move elsewhere.
Jason LeVecke changed plans to expand his dozens of fast food restaurants out of Arizona after the employer sanctions law was passed. Restaurant entrepreneur Richard Melman from Chicago halted plans to open an Asian restaurant in Scottsdale after the business death penalty and E-Verify. Expanding a business is risky with government regulations that could shut the process down. As Melman said, “Why take a chance?”
Roughly 100,000 unauthorized immigrants and their businesses, labor, and purchasing power left the state partly because of the law. Punishing businesses, making it difficult to hire workers, and forcing consumers from the state creates a regulatory environment at odds with economic recovery. Arizona’s dismal economic performance since 2008 is partly a reflection of that.
Arizonans want to hire, rent to, and sell products to peaceful immigrants regardless of their immigration status. Millions of Arizonans vote for that daily with their purchasing power. Restrictive federal immigration laws make Arizona’s current law possible. Restricting the immigration of peaceful and healthy people and using enforcement strategies like Arizona’s may be constitutional but they are bad public policy.