Commentary | Trade and Globalization

Alabama’s anti-immigrant laws put more than 13,000 good export jobs at risk

This piece originally appeared in the Huffington Post

In the past two years, Alabama has passed two of the most discriminatory, anti-immigrant laws in the nation (HB 56 and HB 658). This April, the Service Employees International Union and the Mexican National Association of Democratic Lawyers (ANAD) filed a groundbreaking complaint with Mexico’s Department of Labor challenging Alabama’s anti-immigrant legislation (specifically HB 56) under the supplemental side agreement of the North American Free Trade Agreement (NAFTA). If the United States and Mexico are unable to resolve this complaint through negotiations, Mexico could be authorized to impose duties (tariffs) on Alabama’s exports. Those exports supported 13,300 Alabama jobs in 2010 according to my latest research on the employment impacts of NAFTA.

The North American Agreement on Labor Cooperation (NAALC) required the United States and other NAFTA members to respect internationally recognized rights (to which the U.S. has agreed as a member of the International Labor Organization), and to effectively enforce labor laws that protect those rights. The NAALC is the only U.S. trade agreement with language that explicitly protects the labor rights of migrant workers, requiring the United States to give them the same level of legal protection as its own citizens.

It’s also worth noting that NAFTA and its labor side accord were supposed to be used as a guide for other free trade agreements. The United States has negotiated FTAs with 16 countries since NAFTA took effect.1 The NAALC was a minor improvement over previous FTAs, and additional progress should have been made on labor rights enforcement, including those for immigrant workers, but protections for migrant workers were left out of all 16 subsequent FTAs.

In their petition to the Mexican government SEIU and ANAD noted that HB 56 “has devastating consequences for migrant and immigrant workers in Alabama, as well as for all workers in the state.” HB 56 has created “a climate of fear and intimidation that chills immigrant workers and their co-workers who seek to form trade unions, bargain collectively or participate in other worker advocacy organizations.” The legislation increases the risk of wage theft (non-payment of wages) and occupational injury by encouraging more “off-the-books” (e.g., cash or under-the-counter) employment, and by discouraging immigrants from reporting wage and hour or health and safety violations, since it is illegal for undocumented immigrants to work under HB 56.

Alabama’s anti-immigrant legislation actively promotes mass discrimination by encouraging employers to take race, color, accent and other factors as signs of immigration status, and to view all Latino and foreign workers and job applicants, both documented and undocumented, with suspicion. The law also makes it illegal for citizens to transport undocumented workers, or to hold meetings for them in their homes, which has had a chilling effect on labor organizing. The law has also resulted in the embarrassing arrests of two legal, documented executives with work permits who were employed by foreign auto companies (Mercedes Benz and Honda) that own factories in Alabama.

As my colleague Daniel Costa has noted, immigrant bashing in Alabama reached a peak in the past two years, following the great recession. It appears that immigrants are being blamed for Alabama’s jobs crisis. He notes, however that immigrant workers are responsible for a substantial share of the state’s gross domestic product, and that they paid $130 million in state and local taxes in 2010. Chasing away immigrants will only cost jobs and reduce Alabama’s gross domestic product and tax revenues.

EPI Vice President Ross Eisenbrey has shown that employment growth in Alabama since passage of HB 56 is only one-seventh of the national average. The United States has regained about 43 percent of the jobs lost at the bottom of the recession; Alabama has only recovered about 9 percent of the jobs it lost. Eisenbrey also notes that personal income per worker fell in the two quarters following the enactment of HB 56, while it remained constant in neighboring states. Some businesses in the state have been hard hit by the loss of immigrant workers. Clearly, HB 56 has not helped solve Alabama’s jobs crisis.

The SEIU petition could help all workers in Alabama by encouraging the repeal of HB 56 and HB 568, and by encouraging the U.S. Department of Labor to more energetically enforce internationally recognized labor rights in the state. However, if the U.S. and Mexican governments are unable to persuade Alabama to repeal its anti-immigrant legislation, then Alabama’s exports to Mexico could be subject to significant penalty duties (tariffs).

Alabama exports a number of products to Mexico. The top five are listed in Table 1, below. Motor vehicles and parts were Alabama’s top export to Mexico, including vehicles assembled in the Honda, and Mercedes auto plants in Alabama, and these exports supported over 1,400 jobs in 2010. Exports of primary metals to Mexico, including steel pipe and tubes from Alabama pipe mills supported over 1,000 jobs in the state.2

Agricultural products, the textiles and fabrics industry and the fabricated metal products sector each had exports to Mexico that supported approximately 1,000 jobs in 2010. Alabama’s exports to Mexico also supported 7,900 jobs in other industries. In total, exports to Mexico supported 13,300 jobs in 2010. Most of these jobs were in manufacturing industries, including four of the top five specific sectors shown in Table 1. Manufacturing jobs pay good wages with excellent benefits, especially for workers without a college degree. Manufacturing still employs a disproportionately large share of such workers. More than three quarters of the jobs supported by exports from Alabama were in manufacturing industries.

According to the U.S. Census Bureau, Alabama’s exports to Mexico increased more than 50 percent between 2010 and 2011, and the number of jobs supported by exports likely increased by a similar proportion. Thus, many more Alabama export jobs could be at risk in the future if Alabama refuses to substantially modify or repeal its anti-immigrant legislation. Given the poor condition of Alabama’s jobs market, it’s ironic that exports to Mexico are one of its few bright spots, and those exports are being put in jeopardy by legislation such as HB 56.

Alabama has only created 13,400 new jobs between the employment nadir in Feb. 2010 and May 2012. If it loses this case and refuses to amend or repeal its anti-immigrant legislation, Alabama could lose an equal or larger number of jobs in export industries if Mexico is ultimately authorized to impose trade sanctions.

Alabama can ill afford to risk the loss of more than 13,000 good export jobs. Respect for the civil and labor rights of all workers, both documented and undocumented, is not only the right thing to do, it is the smart thing if Alabama wants to keep and expand its exports to Mexico and the jobs they support. It’s time for Alabama to repeal its immigrant-bashing legislation.

Table 1

Jobs supported by Alabama exports to Mexico, 2010

Motor vehicles and parts 1,400
Primary metals 1,000
Agriculture, forestry, fisheries 1,000
Textiles and fabrics 1,000
Fabricated metal products 1,000
Subtotal of all other industries 7,900
TOTAL in all industries 13,300

Source: Scott, Robert E. 2011. Heading South: U.S.-Mexico trade and job displacement after NAFTA. Washington, D.C., Economic Policy Institute. Briefing Paper No. 308; and unpublished data from that study.

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1. NAFTA was preceded by U.S. FTAs with Israel and Canada. Today the United States has negotiated free trade agreements with 19 countries.

2. The employment impacts of U.S. exports were assessed using an input-output model that estimates the direct and indirect labor requirements of producing output in a given domestic industry. The model includes 202 U.S. industries, 84 of which are in the manufacturing sector. The model estimates the amount of labor (number of jobs) required to produce a given volume of exports. Overall, the model estimated that total U.S. exports to Mexico supported 791,900 jobs in 2010. Each state’s share of trade-related jobs was estimated using data on its share of total employment in each of the 202 industries in the model.

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