Financial Inclusion

Illegal Immigration Crackdown Hitting Some Businesses’ Bottom Lines – Hard

As the Trump administration has stepped up the efforts of immigration and border control officers, immigrants to the U.S. are starting to avoid public places for fear of being stopped.  This has been bad news for small business that serve immigrant communities like Nadine Robinson’s check cashing, wire transfer and office supply store in Doraville, GA — its sales are down by more than half in the first two months of the year.

“If immigrants are afraid of doing what they normally do, how am I going to survive?” said Ms. Robinson.

Robinson, according to the WSJ, is not alone in Atlanta among business who serve — at least to some extent — the 250,000 members of Atlanta’s illegal immigrant community.   She is also not alone nationally, according to Javier Palomarez, president of the U.S. Hispanic Chamber of Commerce, who has been told by many that they are “feeling the pinch.”

The slowdown comes as the new administration has rapidly expanded the number of illegal immigrants subject to deportation and moved increasingly to jailing more people while they await immigration hearings. The ramp up in intensity has driven many communities of illegal immigrants “underground,” so to speak, which has left some businesses facing both worker shortages and customer gaps.

“We fear any kind of encounter with the police or anybody,” noted Marie Cruzado Jeanneau, 22, a Peruvian-born student whose parents are in the U.S. illegally.

U.S. Immigration and Customs Enforcement spokesman Bryan Cox said the agency “does not conduct sweeps or raids that target aliens indiscriminately.” But Mr. Cox added that the agency won’t exempt any illegal immigrants from potential enforcement.

Defenders of the new immigration regime argue that — the harms to some businesses to the side — the overall effect of the change will lead to an enhanced U.S. economy.  Their reasoning on that involves reducing funds shipped abroad through remittances and potentially opening up jobs for U.S. citizens. And while this strongly indicates they know very little about remittances, interconnected economies or the contemporary labor market in the United States, they are certainly sincere in their beliefs — if utterly unsympathetic to those whose livelihoods are collateral damage in the war on illegal immigration.

“If your business is catering to people who were in the country illegally, then they were businesses that weren’t that essential in the first place,” said Ira Mehlman, a spokesman for the Federation for American Immigration Reform, a group based in Washington, D.C. that calls for halting illegal immigration and curbing legal immigration.

It is hard to quantify the economic activity driven by the nation’s 11 or so million illegal immigrants — but a 2016 report by the nonpartisan nonprofit  Institute on Taxation and Economic Policy estimated that illegal immigrants pay about $11.6 billion in taxes annually, and that $6.9 billion of that amount is sales and excise taxes.

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