The Oklahoma Bankers Association claimed in a study by the Economic Impact Group of Edmond released in March, that HB 1804 will have a negative impact on Oklahoma's economy. The study titled "A Computable General Equilibrium (CGE) Analysis of the Impact of the Oklahoma Taxpayer and Citizen Protection Act of 2007" estimates the future loss to Oklahoma's economy in wages and productivity would be between $637 million and $1.8 billion dollars. However, supporters of the bill say the study is seriously flawed.
HB 1804 was passed by the Legislature in 2007. It eliminates welfare benefits and most other public assistance for illegal aliens, and mirrors federal laws that make it a crime to harbor, transport, or shelter an illegal alien.
Economists Russell Evans and Kyle Dean of the Economic Impact Group said "We're not saying that it is a good bill or a bad bill, we have no comment on that. But from a purely economic standpoint, we wanted to see what the cost would be of removing (the illegal alien work force)." The state banking association's executive officer Roger Beverage says, "The association is hearing stories about banks seeing impacts such as loan defaults and halted housing developments."
Carol Helm is director of Immigration Reform for Oklahoma Now (IRON), a non-partisan grass root group that was instrumental in the development and passage of HB 1804. Helm said, "For the economists and bankers to imply that future economic problems in Oklahoma would be due to passage of HB1804 is misleading and irresponsible and a weak attempt to cloud the real cause which is reckless loaning of funds."
Helm said that in reality the Oklahoma economy is doing well. However, mortgage companies and banks who foolishly granted loans to contractors and builders to buy more and more lots without adequate collateral may very soon pay a high price for their foolish practices.
State Rep. Randy Terrill (R-Moore), the House author of HB 1804, charged that the report was based on a host of false assumptions.
Terrill says the study assumes that the entire illegal alien population of the state will leave in the short term and that they will induce a share of legal immigrants to also leave and that U.S. workers will lose their jobs because of businesses that close down or retrench following this exodus. The study assumes that 90,000 will leave the state. "The fact is that the new law (HB1804 Section 7.1) provides for the verification of work authorization of 'new employees.' That fact means that new illegal workers will not find jobs, but it does not mean that existing workers will be fired. The effect on the existing workforce, therefore, will be gradual rather than abrupt," says Terrill.
Further, the study assumes that all low-wage foreign-born workers are illegal immigrants. Terrill says this ignores immigrants who have gained legal residence through various amnesties beginning with the 1986 Immigration Reform and Control Act and continued in other measures such as legal status for persons who married a U.S. citizen or legal resident. It also ignores the fact that the immigration law allows immigration visas for unskilled workers and the fact that unskilled foreign-born workers may be legally in the workforce with guest worker visas. "There is a guest worker visa program for agricultural workers that allows an unlimited number of foreign workers to enter legally if there are no U.S. workers available," Terrill notes.
The study also assumes that there are no Oklahomans available to take jobs that become vacant and ignores the economic advantages of replacing illegal workers with unemployed Oklahomans. These benefits include having a reduced share of the workforce in the underground economy being paid in cash with no taxes withheld. With HB 1804 there will be a greater share of payrolls spent locally with the advantage of generating greater local production and jobs.
"Legal workers would not be likely to send earnings out of the state and out of the country as illegal immigrant workers are likely to do," says Terrill.
Senator James Williamson (R-Tulsa), who was the Senate author of HB 1804, says the report ignores the benefits of the law. "Even if a few businesses are impacted by a departure of illegals from Oklahoma, this will be more than offset by the positives to the taxpayers of Oklahoma. The legislation gets illegal aliens off of welfare, reduces the substantial costs of illegals to public education, and keeps illegals who have left the state from committing crimes or driving in Oklahoma without insurance. All of these public benefits were why the legislation passed by overwhelming margins in the House and Senate," said Williamson.
Terrill says the most basic flaw of the report, however, is that it assumes the illegal immigration debate is about nothing more than pure economics. In fact, it is about unquantifiable things much more important.
"It is about a fundamental respect for the rule of law, upholding our state and national sovereignty, and about the immorality of employing cheap, illegal alien slave labor," says Terrill.
