Bloomberg Línea — A package of 200 laws went into effect this month in the state of Florida, the brainchild of Governor Ron DeSantis, who is focusing on immigration status, but the new rules could have a considerable economic and fiscal impact on the state.
The law SB 1718 that seeks to curb illegal immigration is one of the most-questioned of the new laws, and is already having an impact on Florida’s demographic makeup, and which will have repercussions on the state’s economy.
Highlights of the DeSantis anti-immigration bill:
- Makes it illegal for anyone to employ, hire or recruit a person who is not authorized to work under federal immigration law. Penalty of up to 15 years in prison
- Penalties will be imposed on those who transport immigrants to Florida
- Employers will be required to use the E-Verify system, an online platform operated by the US Department of Homeland Security, which allows employers to verify whether someone is legally authorized to work in the country
- Hospitals will be required to collect information on patients’ immigration status
- Invalidates out-of-state driver’s licenses for undocumented immigrants
- Increases funding to relocate or transport immigrants to other parts of the US
- Expands the authority of the Florida Department of Law Enforcement (FDLE) to carry out immigration enforcement
According to KFF, a nonprofit health policy research organization, Florida state has 1.8 million non-citizen immigrants, including undocumented and lawfully present immigrants, representing more than 8% of the state’s population. A larger number of Florida residents live in immigrant families, which often include people of mixed immigration status, including US-born children.
The effects of the new laws
Media reports indicate that even before the law was enacted, the exodus of Latino families from Florida was already taking place, and this will have a direct impact on the state’s labor force, especially in areas such as construction, the services sector, and industrial activity.
According to various media reports, several employment situations have already occurred. Local food service companies in the state reported that they have not only lost long-term employees as a result of the new law, but also customers who are now afraid to go to public places.
The agriculture and construction industries have also been affected, with reports of abandoned construction sites in the state.
“The new law will have substantial effects on Florida’s real estate market and the economy in general. The shortage of construction employees will cause delays in project completion, and private lenders and banks may stop financing new construction projects. If other states follow Florida’s lead, economic development could slow down,” Fort Knox Capital notes.
KFF, for its part, reported that nearly three-quarters of non-citizen non-elderly immigrants work, a proportion similar to that of their US citizen counterparts. Non-citizen immigrants represent 11% of the state’s overall non-elderly adult labor force, but account for a larger share of workers in certain industries, representing nearly four in ten (37%) of the state’s agricultural workers and nearly a quarter (23%) in construction, along with services (14%) and transportation (14%) workers. The impacts of the loss of workers in these industries can have a major ripple effect on the state’s economy and beyond.
The impact on employment verification
The use of the E-Verify system to verify the employment eligibility of new employees by businesses mandates that if an employer fails to use the system three or more times in two years, the Department of Economic Opportunity (DEO) would be required to fine the employer $1,000 per day and suspend applicable business licenses until evidence of compliance is provided.
These penalties could have a significant impact on Florida’s economy, estimating a loss of $12.6 billion in one year, according to a report by the Florida Policy Institute.
Six key industries in Florida would be particularly affected by these provisions: construction, professional, scientific, management, administrative and waste management services, accommodation and food services, arts, entertainment and recreation, retail trade, and agriculture.
These industries employ 391,000 undocumented workers, representing approximately 10% of employment in these areas. In addition, undocumented workers in these industries earned $12.6 billion in wages in 2019 and contributed around $923 million to state and local taxes in the same year.
The loss of undocumented workers, said the institute, would have a significant impact on Florida’s GDP, as these six industries accounted for 25% of the state’s GDP in 2019, generating $275 billion.
The labor shortage would result in a loss of 10% of the workforce and associated wages. As a result, it is estimated that Florida’s GDP could decline by $12.6 billion in a single year, which equates to 1.1% of the state economy, said the organization.