PHOENIX — As immigration remains a key issue in national elections, Arizona, a swing state on the southern border, is feeling its effects more acutely. Local businesses warn that a growing shortage of workers is putting the brakes on crucial industries like construction, hospitality, and agriculture. Without changes to the federal immigration system, they say the state’s economy could suffer.
A 2022 study by the American Immigration Council found that 16.2% of Arizona’s workforce is made up of immigrants. At the same time, the state faces a job shortage, with 197,000 vacancies reported in June, according to the Bureau of Labor Statistics.
Monica Villalobos, president and CEO of the Arizona Hispanic Chamber of Commerce, said that labor shortages are contributing to broader economic problems, including rising housing costs.
“Several of our members in construction can’t find workers to complete their projects,” Villalobos said. “This delay in construction leads to fewer homes, driving up housing prices.”
The immigration debate has taken center stage in Arizona’s competitive Senate race, where Democratic Rep. Ruben Gallego faces Republican Kari Lake, a former news anchor and 2022 gubernatorial candidate. The outcome of this race could be pivotal in determining control of the U.S. Senate.
Although Congress has struggled to pass comprehensive immigration reform, some progress has been made. In 2022, a bipartisan group of senators, including Sen. Kyrsten Sinema, introduced a bill to expand work permits for immigrants. However, the bill failed to pass after political opposition led to a procedural setback.
Michael Infanzon, a lobbyist for the Canyon State Business Alliance, described the current immigration system as a “fiasco.” He noted that the bureaucratic process for legal workers is so slow that many choose to cross the border illegally rather than wait for approval.
Gallego supports the bipartisan immigration bill and has advocated for increased Border Patrol staffing and improved efficiency at ports of entry to boost cross-border trade.
“I’ve focused on ensuring our ports have the technology and manpower to handle the trade our country depends on,” Gallego said.
Lake, who aligns with former President Donald Trump’s tough stance on immigration, argued that the worker shortage is due to schools failing to prepare students for the workforce. She emphasized the need for educational reform, saying it’s wrong for immigrants to take jobs that could go to high school and college graduates.
“It makes me sick that people crossing the border are getting jobs while our graduates struggle,” Lake said.
John Graham, CEO of Sunbelt Holdings, a Phoenix-based development company, argued that industries like construction and agriculture rely on immigrant labor to fill essential roles.
“These aren’t jobs that can be replaced,” Graham said, standing near a hotel his company is building in downtown Phoenix. “If we lost this workforce, the impact would be devastating.”
Graham, also a board member of the American Business and Immigration Council, recently sent a letter to President Joe Biden urging him to expand immigration permits for workers in high-demand sectors.
Voters in Arizona will also decide on a controversial ballot measure in the upcoming election. If passed, the measure could allow state and local law enforcement to arrest noncitizens crossing the border unlawfully, based on probable cause. The proposal echoes a 2010 state law that made it a crime to be in the U.S. illegally, and led to racial profiling and worker shortages.
Graham warned that such a measure could harm Arizona’s economy by discouraging businesses from relocating to the state. A study by the Grand Canyon Institute estimated the law could cost the state $325 million annually if enacted.
“The previous law hurt Arizona’s business reputation and led to convention cancellations,” Graham said. “We can’t afford to go back to that stigma.”
As the state faces pivotal elections and a growing labor crisis, Arizona’s immigration policies remain at the forefront of political debate, with significant consequences for its economy.
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