Amnesty Provisions and Question of Enforcement Moderate Impact : Hirers of Illegal Aliens React Calmly to New Bill

Over the years, Bill Harris has hired illegal aliens at his Santa Ana sheet metal plant. Paul Dreiseszun, too, has hired them at the electronics assembly business he manages, and Ted Hetman uses them at his contract sewing plant.

By all rights these Orange County businessmen should be concerned about the effect of the sweeping immigration reform bill awaiting President Reagan’s signature. The measure, passed earlier this month by Congress, will penalize employers for knowingly hiring undocumented workers and substantially increase patrols along the country’s Southern border--two moves designed to cut the influx of illegal aliens into the country.

However, although the companies operated by these men and hundreds more in Orange County depend in part on illegal labor, they claim they aren’t worried at all about the bill’s effects.

“It could all be a tempest in a teapot,” said Larry Kimbell, director of UCLA’s economic forecast.

The largest single reason for the calm reactions now is the bill’s amnesty provision, which offers legal status to aliens who have lived in this country continuously since Jan. 1, 1982, or before. “Most of ours have been here since before then,” says Harris.

Although counts are admittedly imprecise, Kevin McCarthy of the Rand Corp., a Santa Monica research company, estimates that as many as 75% of the nearly 750,000 permanent, year-around illegal aliens in Southern California would qualify for the amnesty program.

In Orange County, home to the nation’s fourth largest concentration of undocumented workers, between 80,000 and 100,000 illegals are permanent residents, with another 100,000 more illegal immigrants spending at least a portion of the year in the county. Experts estimate that at any one time between 50,000 and 100,000 illegals, or as much as 10% of the county’s civilian work force, are employed here.

McCarthy agrees that the amnesty provisions will considerably dull the immediate impact of the bill and leave current work forces at many companies untouched.

“We don’t have much turnover,” says Dreiseszun, “so we’re not expecting much effect. The workers we have now have largely been with us for five or six years.”

But in the long-term, McCarthy warns that if the bill is strictly enforced and backed with the full financial resources of the federal government, it will reduce the supply of low-wage labor in Southern California and exacerbate an already tight labor market at the lower rungs of the salary ladder.

The labor shortage would lead to higher wages for the lower level jobs and the transfer of some jobs to lower salary areas, usually Mexico or the Far East.

“There’s going to be a problem getting new workers, that’s for sure,” admits Hetman. “But we can’t worry about that until it actually happens. Probably it will just mean that the garment industry here will end up like the nation’s steel industry: offshore.”

Larry Grigsby, a vice president of Apparelcraft, a Santa Ana-based clothing manufacturer, said that if the company’s labor supply dried up for any reason, the company would find it difficult to remain in Orange County.

“If it becomes uneconomical for us here, we would send the work elsewhere,” he said. “We have to go where the market takes us.”

An Uneven Effect

But the long-term effects, McCarthy and other economists and immigration experts agree, will not be felt evenly across the economy.

For example, they say financial services, including banking and insurance, real estate and professional services--the industries requiring the greatest education and offering among the best salaries-- are not likely to be touched directly by the new law.

The biggest losers, the experts say, are food service companies, construction operations, maintenance and landscaping services and all types of semi-skilled manufacturing operations, such as garment making and some types of electronic assembly.

These industries have typically paid among the lowest wages and have typically served as the entry point for many newly arrived immigrants. To a degree, many of these businesses depend on a steady supply of newly arriving immigrants to satisfy their routine labor needs and any expansion of their operations.

Although these industries stand to lose potential workers, Rand Corp. research suggests that the bulk of illegal immigrants work for small companies which might find it easier to escape the scrutiny of immigration authorities.

Easier to Check Big Firms

“It’s harder to enforce the law against small companies; they have inconsistent record-keeping practices and informal hiring arrangements. You have a lot of work for a small reward,” McCarthy says. “It’s easier when you can just work into a General Motors or something and go into the personnel office and start checking records.”

Still, the analysts say it is still far too early to tell how stringently the law will be enforced by the federal government and if Congress will allocate the money that will be needed to pay for the additional enforcement personnel it will require.

Further, they say the impact will depend on how anxious the general population is to see the law enforced. If Americans want strict enforcement, says Robert Valdez, a Rand Researcher and UCLA professor of public health, then the effects will be noticeable.

“But it could be like Prohibition when Congress passed a law outlawing something the people didn’t consider morally wrong,” Valdez says. “Then you’ll see a lot of people looking the other way.”