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November 27, 2014

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Phoenix — the new Birmingham?

Why Arizona could pay steep economic price for immigration law

During the civil rights era of the 1950s and 1960s, Atlanta promoted itself as “The City Too Busy to Hate.” Atlanta mayor William Hartsfield used this phrase to promote Atlanta’s urban growth and to indicate the city would not succumb to the evils of racial prejudice and violence.

This moniker distanced Atlanta from other big cities in the South, which by implication had plenty of time to hate. This clever marketing strategy helped make Atlanta the world city it is today. The label also struck people as legitimate — Atlanta was not full of angels, rather it was too focused on economic development to deny civil rights to its citizens.

The South was poised to boom after World War II. President Franklin Roosevelt’s New Deal public works improvements brought electricity, power and technology to the region. The war boosted Southern industry in the manufacture of steel, ships and aircraft.

By the 1950s, an entire super highway grid was under construction, one that eventually linked all major southern cities. Albert Gore Sr. (former Vice President Al Gore’s father) chaired the Senate transportation committee and ensured that the South got an extra helping of federal dollars and road projects under the 1956 Interstate Highway Act.

Finally, the South’s right-to-work laws reduced union power and lowered labor costs. Only one issue held the South back — race relations.

Atlanta’s leadership understood this basic fact and devised a brilliant campaign with Northern business interests. The city attracted Northern industries and branch offices by downplaying its racial tensions.

Atlanta promoted itself in a positive light, and northerners went “all in.” Atlanta’s chief rival at the time was Birmingham, Ala., an equal urban center in many ways, also poised to boom in post-World War II America.

Unlike Atlanta, Birmingham saw its racial problems spill into the national consciousness in our newspaper headlines and on our nightly TV news. Many iconic events of racial violence happened in Birmingham, which became ground zero for Southern animosity toward blacks.

When Martin Luther King Jr. was jailed in Birmingham on a trumped-up loitering charge, the contrast with Atlanta could not have been starker. King, an Atlanta native, could preach racial tolerance openly in his hometown, but he was imprisoned for these ideas in Birmingham.

And while in jail, King penned his famous essay on race, “Letter from a Birmingham Jail.” Birmingham’s treatment of blacks in general and King in particular was a public relations disaster for its business leadership.

Atlanta quickly became the Southern city for commerce. Yes, Atlanta had its haters such as Georgia Gov. Lester Maddox, but Birmingham had “Bull” Connor, the public safety commissioner who became a symbol of bigotry across the nation for the use of fire hoses and attack dogs against protest marchers. In addition, Alabama Gov. George Wallace emerged as perhaps the most visible politician resisting “Northern-imposed” racial integration.

Today Atlanta is the leading megapolitan area of America’s Southeast, one of the world’s major corporate centers and a global transportation hub. Atlanta’s corporate resume is striking.

This metropolis is home to the world headquarters of Coca-Cola Co., AT&T Mobility and Delta Airlines. Home to the third largest concentration of Fortune 500 companies in the United States, Atlanta also hosts more than 75 percent of Fortune 1000 companies found in the region. Hartsfield-Jackson-Atlanta International Airport is the world’s busiest airport, making Atlanta truly a world city. Recognizing the significance of its motto, “The City Too Busy to Hate,” Atlanta offers itself to the word today as “The City Not Too Busy to Care.”

Immigration a simmering issue

Fast forward to now. America is a more diverse and tolerant society that just elected its first black president. Race relations between blacks and whites remain a diminished but persistent problem.

However, the newer element in the mix is immigration — especially undocumented immigrants. The issue has been simmering for some time and now threatens to explode in a way reminiscent of past civil rights struggles.

Arizona is the new epicenter in the movement to sharply curtail illegal immigrants. The state just passed legislation that gives police broad powers to determine which residents are undocumented — dubbed the “show me your papers” law. On top of that, Arizona is restricting “ethnic studies” and its Education Department is removing teachers “who speak with a very heavy” accent from the classroom. The “thick accent” rule seems especially over the top, as if some American version of Henry Higgins is always on call to check people for proper idiomatic speech.

The economic effects

Arizona and other Southwestern states have legitimate concerns regarding federal immigration policy and border security. The U.S. government does a poor job policing the border with Mexico. Those who enter the country illegally burden Arizona with higher costs for medical care, public safety and education services (while also contributing to the state’s economy).

Southwestern states repeatedly ask Washington to enforce the law and provide additional resources to offset the costs of federal inaction. Frustrated with years of federal inaction and facing deep deficits, Arizona had enough.

Arizona may pay a steep economic price for its dramatic move on immigration, and the state has been down this road before. In 1987, Arizona Gov. Evan Meacham (who once referred to black children as “pickinannys”) canceled a paid holiday commemorating Martin Luther King’s birthday. That decision had severe repercussions, including the National Football League’s decision to move the Super Bowl.

Arizona State University’s decision not to award President Barack Obama an honorary degree, suggesting that achieving election as our nation’s first black president fell short of that institution’s criteria for such an award, drew much criticism. While President Obama professed indifference to this snub, the cumulative effect of providing self-inflicted fodder for national news outlets and political satirists creates a horrendous public image problem for Arizona. No city understands this dilemma better than Las Vegas.

Arizona relies upon tourist and convention business (sound familiar?) and the immediate effect of its immigration law is evident. The American Bar Association is receiving pressure to relocate a meeting. The Major League Baseball Players Association condemned the law, perhaps leading to the relocation of the 2011 All-Star game, scheduled for Phoenix.

The decision of the NBA’s Phoenix Suns to don uniforms adorned with “Los Suns” has generated much local and national debate. Service Employees International Union Executive Vice President Eliseo Medina joined labor and civil rights leaders to announce that the 2.2-million-member union will boycott conventions and meetings in Arizona to denounce the extremist, anti-immigrant law.

Even more damage may come in the long term. Boston, an urban center dogged by its own racial and ethnic troubles, is considering cancelling contracts with firms based in Arizona. City governments in Washington, New York and Los Angeles are considering similar measures.

The California problem

Arizona, like Nevada, wants to diversify its economy and rely less on tourism and real estate development. One promising area for both states is alternative energy, including wind and solar power.

Alternative energy initiatives will benefit from the recent oil spill in the Gulf of Mexico, an event likely to dampen the enthusiasm for off-shore drilling. Arizona has identified new technologies in solar energy and green building as focal areas for investment. In addition, the Legislature has pumped millions of dollars into higher education to spur further research gains and create a more attractive climate for business development.

Could Arizona become the “new Alabama” and Phoenix the “new Birmingham?” Arizona is especially vulnerable because the very business sectors it seeks to attract typically support a progressive workforce.

While China and Germany have advanced solar sectors and can invest in the state, Arizona requires Californian venture capital and technology to build its alternative energy industry. The state’s immigration law puts it on the wrong side of California’s post-Proposition 187 values and sensibilities.

In the 21st century, California is to the American West what the North was to the South in the 20th century. California is an economically advanced, but expensive place, whose businesses often seek lower-cost states for branch offices, manufacturing plants and headquarters relocation.

Silicon Valley and the Bay Area’s high-tech corridor view their Western neighbors as an extended workbench — Portland, Boise, Salt Lake City and, yes, Phoenix are beneficiaries of business decisions made in California. This is Arizona’s real gamble. Recently the San Francisco City Council moved to penalize Arizona by preventing its employees from visiting the state on official business. More sanctions will certainly follow.

The effect of Arizona’s new immigration law on Nevada is still unfolding. Most Republican politicians quickly voiced approval. Yet Gov. Jim Gibbons refused to call the Legislature into special session to take up the issue.

Opportunity for Western cities

For the moment, Republicans appear to be walking a tight rope — balancing the need to support the law to gain an advantage with their base in upcoming primaries, but hoping not to alienate the growing bloc of Hispanic voters in this and future elections. It is highly unlikely that such a proposed law would ever see light of day in the Nevada Assembly given its current Democratic majority. Also, such a law would be anathema to the state’s tourism industry, which has more political clout in Nevada than Arizona.

Could Las Vegas play the role of Atlanta to Phoenix’s Birmingham? A more likely outcome is that Las Vegas quietly joins with other major cities in the West to capture some of Phoenix’s lost business. City leaders seem hesitant to overtly recruit Phoenix’s lost convention trade, remembering the furor caused by Obama’s remark that companies receiving government-bailout money shouldn’t take trips to Las Vegas.

A bigger prize is alternative energy. Nevada is well positioned to offer Californian businesses a more tolerant alternative to Arizona. Fair or unfair, the decision to locate industry can come down to perceptions of tolerance. The once-promising future for Birmingham was lost, in part, to an ugly demonstration of racial prejudice. Phoenix and other Western cities would do well to learn from Birmingham and Atlanta.

Las Vegas, and all of Nevada, may benefit directly from Arizona’s immigration policy, assuming we do not travel the same road. Increases in convention business, relocated corporate offices and tourism are some likely gains to be made. Here in Nevada, however, we do not need a stacked deck to compete with our friends from Arizona.

Robert Lang is a professor of sociology at UNLV and the UNLV director of Brookings Mountain West. William E. Brown, Jr. is director of planning and communication for Brookings Mountain West.

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