Oklahoma Bankers Association Report Criticizing HB 1804 Seriously Flawed

State Rep. Randy Terrill (R-Moore) today issued a response to the recent report by the Oklahoma Bankers Association criticizing House Bill 1804. His response is as follows:

“The study titled ‘A Computable General Equilibrium (CGE) Analysis of the Impact of the Oklahoma Taxpayer and Citizen Protection Act of 2007’ by the Economic Impact Group, LLC released in March 2008 is seriously flawed because it is based on false assumptions. The following problems exist with the study.

➢ 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 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.

➢ The study assumes that there are not Oklahomans who are available to take any jobs that become vacant. The study cites a labor force participation rate of 63.3% as a high rate. At the same time it notes that the national participation rate is 66% and it notes that among illegal aliens the participation rate is estimated to be 75%. In fact there are a number of locations around the country where the participation rate is higher than 70%. Nationally the real unemployment rate is about double the official rate because the latter does not include persons who have lost their unemployment benefits, others who are working part time because they cannot find full-time jobs, and first job seekers.

The 4.5% unemployment rate in Oklahoma cited in the report suggests a real unemployment of as many as nearly a quarter million persons who represent a hiring pool for employers who are precluded from hiring illegal workers. Many of these Oklahoma residents are likely unskilled and among the state’s most vulnerable residents.

➢ The study assumes that all low-wage foreign-born workers are illegal immigrants. This is patently false because it ignores the illegal 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 our immigration law allows immigration visas for unskilled workers and the fact that unskilled foreign-born workers may be legally in the workforce with guestworker visas.

➢ By treating the illegal immigrant workforce as composed of similar workers, the study ignores the fact that the loss of illegal workers in the agricultural sector represents a very different situation than for the rest of the economy. There is a guestworker visa program for agricultural workers that allows an unlimited number of foreign workers to enter legally if there are no U.S. workers available.

➢ The study ignores the net fiscal burden of the illegal immigrant population. The tax burden borne by the state’s taxpayers for such outlays as education, emergency medical services, and translation and interpretation services have been an advantage to the businesses that have employed these workers. It is not clear whether the authors of the study believe that Oklahoma businesses should have a right to continue to expect the state’s taxpayers to shoulder this burden.

➢ The study 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 and not having taxes withheld. 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. This would mean a greater share of local payrolls spent locally with the advantage of generating greater local production and jobs.

➢ 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 than that. 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.