Immigration laws and unemployment


The typical rationalization for state immigration laws is that they reduce unemployment. The data suggests otherwise.
The graph above shows unemployment rates for Alabama, Arizona, Georgia and South Carolina. All imposed harsh laws against undocumented immigrants at different dates. Alabama’s law had an effective date of Sept. 2011; South Carolina’s took effect in Jan. 2009. Georgia’s law had an effective date of July 2007. Arizona’s went into effect in Sept. 2010.
The actual effective dates varied significantly from those the legislatures’ mandated, due to court rulings. The point, though, is that the effective dates varied.
The dates on which the unemployment rates fluctuated, however, did not vary among the states. Unemployment rose and fell in lockstep, notwithstanding the status of their immigration laws. The changes also corresponded with fluctuations throughout the South.
Conclusion: the immigration laws of the various states had no appreciable impact on unemployment rates.
There are two possible explanations. One is simply that the laws, harsh as they are, simply did not work; not many immigrants left. Anecdotally, I find this explanation unlikely. I know of many immigrants who left the state in response to the law.
The other explanation, which I find more likely, is that immigrants left but employers did not replace them. There was considerable anecdotal evidence that this was the case with farm labor, where non-immigrants could not handle or did not want the jobs. This explanation suggests that the only impact of the law was to create an artificial labor shortage in various sectors. In other words, the legislatures damaged the economy without obtaining the reduction in unemployment they claimed was their goal.


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