Employer-sanctions law starting to have the intended effect
By Becky Pallack and Mariana Alvarado Avalos
ARIZONA DAILY STAR
Tucson, Arizona | Published: 12.23.2007
This is what state lawmakers hoped for when they passed the employer-sanctions law in June.
Guillermo Santini, 33, packed his family's Ford Explorer on Friday and prepared to leave Tucson for Mexico. He, his wife and two children — ages 5 and 10 — are moving back to Guaymas, Sonora, because he could no longer get steady work in the construction industry.
"All my friends who were doing the same work are leaving," Santini said. "They're selling everything, all their materials, all their tools."
The Legal Arizona Workers Act, which goes into effect Jan. 1, requires state employers to verify employees' eligibility to work in the United States and establishes sanctions for those who knowingly or intentionally hire illegal workers.
The law also is having unintended consequences. Fears are rising that it could hurt the state's economy, and businesses are finding work-arounds to protect themselves from the law.
"The fear factor has set in," said Arizona Farm Bureau President Kevin Rogers.
The law is one of two reasons some workers are leaving, said Marshall Vest, economist at the University of Arizona's Eller College of Management. The other: Arizona is less attractive to illegal workers who came to work in a booming economy that now is slowing.
"Tourists" came and stayed
Santini and his family arrived in Tucson in 2004, but they didn't do it by sneaking through the desert. They did what many illegal workers in Tucson do: They crossed with valid tourist visas and stayed.
Santini agreed to be interviewed on the condition that his wife, children and employers not be named.
Santini came looking for work that pays well, having been a fisherman in Guaymas. He found good jobs in Tucson's then-booming construction industry.
He started with relatively modest pay of about $500 per week, working for a construction company, Santini said. But later he started working independently as a lathe and stucco subcontractor and was taking home a healthy $1,200 or so per week.
In the last year, as the real estate market slowed and construction decreased, Santini gradually began losing work. About eight months ago, he said, contractors began asking him for a contractors license, which he didn't have. They also asked him for other forms of identification he didn't have, such as a Social Security card.
"There were little jobs. I was working one week, three days. But I was off for 15," he said.
This fall, Santini decided he needed a different job and hired on as a cook at a local restaurant.
But the pay was too low — about $230 per week.
Santini's wife also took a job.
Finally, tired of the increasing difficulty of life in Tucson, the family decided to leave. They were to leave this weekend for Santini's parents' house in Guaymas, where the family plans to settle — for now.
Worker scarcity?
The departure of workers like Santini has some business owners wondering where they'll find employees.
In agriculture, where some vegetable harvests are in full swing, some illegal workers have stopped showing up, said Rogers, who grows cotton, hay and corn in Maricopa County. Those who are left are working longer hours to fill orders.
"There just aren't enough people to fill these jobs, and our economy is going to suffer," Rogers said.
According to one report from the University of Arizona, non-citizens make up 45 percent of the vegetable- and melon-farming workforce — and there is no short-term solution for replacing them, Rogers said. The UA report doesn't specify what portion of the non-citizens are illegal.
Hospitality and small businesses also are feeling the pinch, said Marion Hook, owner of the Adobe Rose Inn and a member of the city of Tucson's Small Business Commission.
"Businesses have been put in the position of enforcing a law they don't understand," Hook said.
Some businesses are finding ways to limit the impact, said Bill Eggleston, director and chair of the Fennemore Craig law firm's business and finance practice group.
New businesses are considering incorporating in another state, where their business licenses won't be at risk, he said.
Some longtime Arizona businesses are talking about setting up each of their branches as a separate entity, reducing the risk that the whole company would fall if one arm were hiring unauthorized workers, said Ron Stolkin, co-chair of Fennemore Craig's labor and employment practice group.
Change comes quickly
The new law already has changed the business climate, said Tom Ward, owner of Isaiah One Inc., an economic development consulting firm in Green Valley.
Companies considering Arizona and other states for new locations are weighing the law, he said.
A resort company he worked with recently decided against Arizona, he said.
"There may be other reasons than this law, but this law was mentioned to me," Ward said.
Vest said it's only natural that companies comparing possible locations will consider the new law. "I think there could be a large effect if Arizona's the only state that has this added regulatory burden."
Hal Netkin, an anti-illegal immigration activist and retired professional recruiter, doesn't buy the "doomsday argument" and thinks the economy will correct itself.
Netkin recently opened a business called E-VerifyFor You.com in Sierra Vista, hoping to capitalize on the new law by conducting employment verifications for employers.
"There will be some hard times for some employers because they're addicted to cheap, illegal labor," Netkin said. "When you have a situation where you can't find American workers — or immigrant workers, if they're legal — wages go up and people start coming back to the work."
â— Contact reporter Becky Pallack at 573-4224 or at bpallack@azstarnet.com.
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