Las Vegas Sun

September 1, 2014

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Report: Illegal immigrants contribute billions to state

Analysis says exodus would cost state tens of thousands of jobs over time

If Nevada’s undocumented workers left tomorrow, the state would lose tens of thousands of jobs and billions of dollars, according to the first report to quantify the impact.

The study, from the Houston-based Americans for Immigration Reform, estimates 45,000 jobs would be lost over time and $9.6 billion would no longer circulate through Nevada’s economy each year.

The report is particularly timely because something like the posited scenario — losing tens of thousands of workers — may well be occurring in the Las Vegas Valley. In an April 6 story, the Sun reported that an estimated 60 percent to 80 percent of the valley’s residential construction workers are illegal immigrants. With the downturn in the new housing market, tens of thousands of immigrants have lost jobs and are no longer feeding as much money into the local economy. Many are leaving the area.

Because these workers live and work under the radar, economists did not foresee the effects of their lost wages and spending on state revenue; some say more accurate information could have helped the state plan better and avoid some of its current shortfalls.

Nearly two years ago, Assemblyman Moises Denis, D-Las Vegas, unsuccessfully called for a study calculating the effect of illegal immigrants on Nevada’s economy. He says the Texas group’s effort is “a good start.”

The report’s conclusions about Nevada “don’t surprise me,” Denis says. “I don’t think it’s inflated.”

A colleague of his, state Sen. Bob Beers, isn’t so sure. “What’s missing,” Beers says, “is an attempt to quantify the costs to society and government” of the illegal immigrant population. He points to the school system as an example, with its large population of students learning English as a second language.

The Perryman Group, a Texas company with 30 years in economic research, conducted the study. Ray Perryman, the company’s president, says his report does try to account for the costs Beers cites.

Perryman allows that his outfit doesn’t have access to each state’s tax or social service records, but says he uses data gathered in other studies, including one the state of Texas did, for a model that includes those costs. The report estimates that Nevada in 2007 had 130,000 undocumented immigrants in its workforce, or 9 percent of its total number of workers, the fourth-highest percentage in the nation behind Arizona, California and Texas.

The study says the United States would eventually lose 2.8 million jobs and $551 billion in annual spending without undocumented workers — not only the jobs held by those workers but jobs lost in other industries as losses rippled through the economy. The state and national figures cited take into account adjustments the economy would make, over time, in the absence of illegal immigrants, the report’s authors say.

Maureen Kilkenny, a professor in the resource economics department at the University of Nevada, Reno, wonders whether Perryman’s work doesn’t reflect the interests of the businesses in the group, Americans for Immigration Reform, which paid Perryman to do the work.

She says the report doesn’t factor into its calculations the difference between wages offered undocumented workers in sectors such as construction and services and what would be paid to legal workers in those sectors.

“The study looks only at the interests of employers ... who can get away with hiring workers at a lower cost,” Kilkenny says.

Beers, somewhat similarly, thinks the study is an example of “when you start on a mission to conclude something, you usually get there.”

Beto Cardenas, counsel to the Houston-based group and spokesman for the report, says its conclusions are based on facts, and that he welcomes similar studies with different conclusions. Perryman says his group’s reputation precedes this report and that he “started with a blank piece of a paper and went from there.”

The study took about six months and cost about $100,000, Perryman says.

Denis says Nevada needs to have its own version. “We need to be worried in Nevada how we handle this issue. We depend on these workers and ... if we don’t have an opportunity to bring in more workers in the future, it is going to have an impact.”

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