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Immigrants boost economy — but how much?
A study could help state avoid more surprises,
but politics preserve
willful ignorance
April 14, 2008 - Roberto Alvarez sits after services at Ebenezer Christian
Church last month in Las Vegas. Alvarez has three brothers in the construction
business who, like many immigrants in the area, are out of work.
Nevada’s invisible workers are causing trouble for the state.
After dozens of interviews, the Sun concluded in an April 6 story that 60
percent to 80 percent of the Las Vegas Valley’s residential construction workers
are illegal immigrants. Tens of thousands of these immigrants who have lost
construction jobs are no longer feeding money into the economy. Many are leaving
Las Vegas.
Because these workers live and work under the radar, economists did not foresee
the effects of their lost wages and spending on state revenues.
The result is “we plan in the dark,” says Jeremy Aguero, principal of Applied
Analysis, a Las Vegas consulting company whose clients include Clark County, the
Wynn resort and the Legislative Counsel Bureau, the state’s research arm.
And now that the state government is lurching forward with steep spending cuts
midway through its budget cycle, some say flawed revenue projections are partly
to blame.
As Assemblyman Moises Denis, D-Las Vegas, explained: The 2007 state budget
“didn’t take into account the true impact immigrants have on the economy, so we
underestimated how (the downturn in homebuilding) would affect our economy.
Things are worse than they might have been because immigrants are leaving.”
Aguero and Denis say the lesson for the state is that if it wants to avoid
stumbling from budget year to budget year, it must find a way to count the
entire workforce and calculate the effect of illegal immigrants on the economy.
Others in politics and business remain unconvinced of the merits of such a
study. They don’t think it would be unbiased, and they doubt the results would
convince both sides of the polarized debate on immigration.
Denis says he tried to float the idea of funding research on the issue before
the 2007 legislative session. One of three Hispanics in the Legislature, he has
a district that’s about 70 percent Hispanic. At the time, he spoke of the need
to “have information to make informed decisions.” But most of his colleagues
didn’t get it.
“Most people I talked to thought it was a good idea from an economic point of
view, but not from a getting-elected point of view,” he recalls. Denis says he
plans on reviving the idea, seeking support this time from the private sector.
Aguero says there’s “no question” the issue needs to be looked at. “They’re an
essential element to an essential part of our economy — and maybe multiple parts
of our economy,” he said.
Denis, who has lived in his Las Vegas neighborhood for more than 30 years, says
the way immigrants are undercounted in the economy reminds him of what he faced
as PTA president at C.C. Ronnow Elementary School in the mid 1990s. For years,
he says, the School District would assume that his children’s school’s
population would shrink based on incomplete information about the apparently
aging demographics of the surrounding neighborhood. He kept trying to point out
that the school was growing because of the influx of Hispanics. Finally, the
district began taking into account the growing Hispanic student body at C.C.
Ronnow and surrounding inner-city schools, he says.
As for economic impact, Texas is the only state to have completed a study
focusing on illegal immigrants. Private groups in Iowa and Oregon have recently
issued reports as well. In Nevada, the Progressive Leadership Alliance of Nevada
looked at immigrants as a class, legal and illegal, in a 2007 report. That
report didn’t look at costs to local and state governments.
The 2006 Texas report, compiled by the state comptroller, concluded that
undocumented immigrants added $17.7 billion to the gross state product and $1.58
billion to state revenue in 2005, while “taking away” $1.16 billion in state
services.
Mark Sanders was then spokesman for Texas Comptroller Carole Keeton Strayhorn
and helped write the report. He says that “it was such a hot potato that quite
frankly some people didn’t want it done.”
A lot of people in that state’s government “had a preconceived notion of the
impact of illegal aliens on society,” Sanders says. So the results proved to be
an “eye opener ... that probably lowered some of the rhetoric against illegal
aliens.” The study took about six months to complete and cost the state nothing
because the comptroller’s staff already did research on taxes and state revenue.
But in the end, Sanders says, “the report got caught up in politics,” meaning
its results were dismissed by Strayhorn’s opponents and by those who believed
illegal immigrants are inevitably a drain on the economy. This is what Aguero
calls the “passive racism of low expectations.”
State Sen. Bob Beers says, “It would be nice to know if immigrants produce a net
gain or not ... but I would be concerned with the methodology of such a study”
and how it would be seen.
“There’s no way to do such a study that one side isn’t going to question the
other side’s methodology, assumptions and work,” he says.
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