My view: Immigration and the Utah economy

Published: Thursday, March 3 2011 12:00 a.m. MST

Editor's note: a version of this open letter from seven economists was recently sent to Utah state legislators.

As Utah economists, we have closely observed the immigration debate on Capitol Hill.

The Utah economy is at a crossroads, transitioning from a long and deep recession to what we hope will be a period of prolonged expansion. A strong, stable and sustained economic expansion, however, won't happen by chance. It will occur because of purposeful leadership.

With this in mind, we ask you to refrain from passing immigration legislation this year that will increase economic uncertainty and may impair Utah's nascent recovery.

Utah's economic recovery remains fragile. The recession impacted every industry and county in our state. Approximately 72,000 jobs were lost and unemployment reached its highest level in 26 years. Today, more than 100,000 Utahns feel the sting of unemployment (twice the normal level). Fortunately, Utah's economy is expanding again. Job growth has been positive for seven consecutive months. Businesses are hiring, consumers are spending and tax revenues are growing again.

But the expansion is not without serious risks. Most of these risks come from outside the state. Geopolitical concerns in the Middle East increase uncertainty, create investor anxiety and place upward pressure on energy prices. The European debt crisis remains a threat to global stability. U.S. fiscal policy continues to send dangerous signals to the international economy, which reverberates at the state level. And stock market volatility, tight credit, foreclosures and consumer confidence remain concerns.

It is imperative that Utah leaders take command of the economic influencers within our control and nurture this delicate expansion. This is where state-level immigration policy becomes critical.

There is broad agreement among mainstream economists that market-driven immigration increases productivity, boosts real wages and grows the economy. Immigrant labor not only complements native labor, but spurs innovation and entrepreneurship, two hallmarks of economic progress in the 21st century.

Immigrant labor, ingenuity and purchasing power are critical components of the Utah economy. Utah immigrants — both documented and undocumented — comprise a large and vital part of the Utah economy as business owners, workers, consumers and taxpayers. Utah is home to 169,600 foreign-born residents and an estimated 110,000 undocumented immigrants, all of whom purchase Utah products.

Immigrants are entrepreneurs and property owners. Mexican nationals and immigrants own 1,834 businesses in Utah accounting for $227 million in annual sales. Mexican immigrants own property valued at $984 million and have an estimated purchasing power exceeding $1 billion.

And let's not forget highly skilled foreign workers where H-1B visas nationwide are capped at 65,000 annually, an allotment that it is not unusual to fill in a single day. The Harvard Business School found that immigrants comprise nearly half of all scientists and engineers in the country who have a doctorate. Utah's experience in recruiting USTAR professors confirms this trend. Clearly, there is a tight link between immigrants and the Utah economy.

We point out these quantifiable economic realities to make a simple point. Immigrant-unfriendly, state-level legislation could have very real and potentially unintended consequences on the Utah economy. Punitive immigration legislation – in substance or perception – could limit the labor force, diminish purchasing power, increase the cost of doing business, discourage outside investment and convention business, hinder people's access to education and impair Utah's reputation as a welcoming and friendly state.

Any of these impacts would have a negative effect on the Utah economy at a time when we can ill afford economic disruption. Even worse, immigrant-unfriendly legislation, when combined with myriad downside risks outside of our control, could possibly derail Utah's economic recovery. These are risks that we should not take.

We ask you to exert economic leadership and refrain from passing immigration legislation this session that could increase economic uncertainty and hurt the Utah economy.

Kelly Mathews, former Wells Fargo Bank economist; Doug MacDonald, Econowest; Peter Philips, University of Utah; Susan Madsen, Utah Valley University; Natalie Gochnour, Salt Lake Chamber; Randy Simmons, Utah State University; Jeff Thredgold, economic consultant to Zions Bank

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