Policy Statement of the Virginia Hispanic Chamber of Commerce
Concerning Anti-Business Legislation Targeting Illegal Immigrants
TheLegislativePolicy Committee of the Virginia Hispanic Chamber of Commerce is a a bipartisan group of business, legal and community leaders committed to enhancing Virginia’s reputation as a pro-business state. Virginia has an unmatched reputation as a pro-business state, primarily because its state governmental regulatory structure is lean and less burdensome than most other states.
Forbes Magazine rated Virginia as the best state in the United States to conduct business. The single most important reason that Virginia won that honor is because Virginia had the best regulatory environment of any state in the nation.
The Committee has been meeting since the summer to consider and evaluate pending or proposed legislation that may affect businesses in general and Hispanic businesses in particular.
The lastlegislativesession saw a number of anti-immigrant bills, many of which had strongly negative implications for businesses in the Commonwealth.
The Committee is concerned that such legislation will be proposed in the coming General Assembly session.
Guiding Principle:
The Committee is guided by the principle that business legislation should not create costs and administrative bureaucracy that is not balanced by a tangible economic benefit.
In past General Assembly sessions, legislation had been proposed that imposed regulatory burdens on Virginia businesses with out any identifiable economic benefit. The Committee obtained the Department of Planning and Budget fiscal impact statements for these bills. It is not clear that any of these bills confer a tangible economic benefit that outweigh their administrative costs and burdens. Several bills proposed to substantially increase staff at state agencies.
The bills articulate no tangible economic benefits for the administrative costs imposed. Further, these proposed bills impose equal costs on small, medium and large businesses. While large, multinational corporations may be able to meet the cost of these bills, small and medium businesses may not. This would likely result in a substantially higher burden for small and medium business which, in turn, would make it harder for those businesses to thrive in the Commonwealth. The Committee considers this an economically negative outcome.
The General Assembly Should Not Risk Virginia’s Status as Best In the Nation Without Conducting a Thorough Economic Analysis
The Committee considers the above legislation and other proposed legislation like it to be a form of social legislation proposed as economic regulation. The root of this social legislation, in the Committee’s view, is a lack of information.
There are numerous myths and preconceptions about Hispanic immigrants that seem to drive this proposed legislation. These myths include:
Hispanic immigrants do not pay taxes;
Hispanic immigrants come to the United States to get welfare;
Hispanic immigrants are all illegal;
Hispanic immigrants take jobs from Americans.
Non-partisan research in this state and other states clearly debunks these myths:
1. Hispanic immigrants pay taxes.
B. Porter of the Urban Institute, reports that undocumented immigrants contribute between $6 and $7 billion to the Social Security fund through Social Security payroll taxes. These Social Security Funds are credited to a "earnings suspense file” and then paid out to Social Security recipients. Most experts agree that the $7 billion dollars annually credited to the earning suspense file is paid by illegal immigrants in the form of Social Security payroll taxes. These immigrants will never recover those taxes in the form of Social Security benefits. See also, New York Times, April 5, 2005: "Illegal Immigrants Are Bolstering Social Security With Billions”
The State of Texas commissioned a comprehensive economic analysis of the economic impact of illegal immigrants. The report, issued by the Texas Comptroller, concluded that illegal immigrants paid an estimated $513 million dollars in local taxes and an estimated $ 1.58 billion in state taxes and fees for a total state and local tax contribution of $2,093,000,000. The Texas State Comptroller estimated that the cost of illegal immigrants in terms of state and local services was approximately $ 1,160,000,000. The Texas Comptroller concluded that illegal immigrants contributed nearly $ 1 billion ( $933 million ) more in taxes than they took out in services. This contribution is separate from and in addition to the added economic value of the illegal immigrant workforce. The Texas Comptroller estimated that illegal immigrants increased the State’s gross domestic product by $17.7 billion dollars.http://www.cpa.state.tx.us/specialrpt/undocumented/undocumented.pdf
The State of North Carolina Bankers Association commissioned a study of Hispanic Immigrants in North Carolina. The study was undertaken by Professors Kasarda and Johnson of the Kenan-Flagler School of Business at the University of North Carolina. The study concluded that Hispanic immigrants, including both legal and illegal immigrants contributed $756 million dollars annually in local taxes and used approximately $ 817 million dollars in services. The study also concluded that Hispanic immigrants created an overall positive economic impact of $9.19 billion dollars.http://www.kenan-flagler.unc.edu/assets/documents/2006_KenanInstitute_HispanicStudy.pdf
Immigrant households in the Washington, D.C. metropolitan area contributed nearly $10 billion in taxes in 1999-2000. This amount was 18% of all taxes paid by households in the metropolitan area. Capps, Passel: "Taxes Paid by Immigrants in the Washington, D.C. Metropolitan Area”, May 2006.
In the Commonwealth, undocumented immigrants have revitalized abandoned neighborhoods in Northern Virginia, the Shenandoah Valley and Richmond. In so doing, they have returned underutilized real estate to use. This, in turn, increases real estate income and property tax receipts in those locations.
This persistent myth is circulated notwithstanding the fact that the eligibility requirements for welfare have substantially tightened over the past ten years. Undocumented immigrants are ineligible for welfare, food stamps, Medicaid and most other benefits. The Wall Street Journal reported that in the aftermath of Hurricane Katrina, undocumented immigrants in New Orleans were refused admission at federally operated shelters. In short, the benefit system in the United States excludes undocumented immigrants from virtually all forms of the social service payments.
Over 90% of undocumented Hispanic males are fully employed in the work force. This is a percentage higher than native-born males. Capps, Fix & Passel, 2003 "A Profile of the Low-Wage Immigrant Workforce”, the Urban Institute. Thus, these workers rely on wages rather than social service payments for their livelihood.
3. All Hispanic immigrants are illegal.
The Commonwealth of Virginia is home to a very large percentage of Central American immigrants. Many of these immigrants are eligible for or already have legal status through Temporary Protected Status. Temporary Protected Status is extended to immigrants from various Central American countries based on natural and man-made disasters in those countries (i.e. civil war, hurricanes, etc.). While many of these Central American immigrants are eligible for Temporary Protected Status, the paperwork required to obtain and maintain that status is complicated and difficult.
4. Hispanic immigrants take jobs from Americans.This myth is facially invalid given the extraordinary low unemployment rate in this country and especially in the Commonwealth of Virginia (one of the lowest in the nation). Most economists agree that the unemployment rate in the Commonwealth of Virginia is functionally full-employment. Some economist see parts of the state ( suburban Richmond, Northern Virginia) in a labor shortage. See Richmond Times Dispatch, December 10, 2006. Businesses want and need new workers, particularly those willing to engage in manual labor. Hispanic immigrants fill that niche.
More importantly, the Commonwealth of Virginia is home to one of the largest segments of Hispanic-owned businesses in the country. Hispanic-owned businesses have increased 67% in the past nine years in the Commonwealth of Virginia. Washington Post, March 22, 2006.
As important, the Commonwealth is home to one of the highest number of Hispanic owned technical or professional service companies. These high-wage companies have increased by 12.6% in the Commonwealth of Virginia.Id. By contrast, historically Hispanic cities like Houston and Los Angeles have only seen a 6% - 8% increase in Hispanic technical and professional service firms. These figures show that the Commonwealth of Virginia is welcoming to Hispanic professional and technical employers.
Legislative Objectives for the General Assembly
The Virginia Hispanic Chamber of CommerceLegislativePolicy Committee favors a rational, economically oriented approach to immigration-related legislation. Crafting legislation in the absence of a thorough economic analysis can result in laws and regulations for which there is little or no tangible economic benefit. As important, such laws and regulations may threaten to jeopardize Virginia’s standing as the "Best State for Business” by making the regulatory environment more burdensome to business. As noted above, Virginia won the Forbes award for "Best State for Business” based on its pro-business regulatory environment.
Therefore, The Virginia Hispanic Chamber of CommerceLegislativePolicy Committee favors a comprehensive, independent economic analysis of the effect of illegal immigration like that conducted by the State of Texas. Until such an economic analysis has been completed, the General Assembly should refrain from passing legislation which would impose administrative and regulatory burdens on Virginia businesses that are not outweighed by a tangible economic benefit.
Conclusion
With all the good economic news in the Commonwealth of late – the number one rating by Forbes Magazine; the high number of new business, both Hispanic and native-born; and the extraordinarily low unemployment rate – theLegislativePolicy Committee would urge the General Assembly to improve the economic welfare of the Commonwealth by opposing anti-business and anti-immigrant legislation until the Commonwealth conducts a comprehensive, objective economic analysis.
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