By | Mar 12, 2009
Last August, nearly 600 workers were taken into custody when agents with U.S. Immigration and Customs Enforcement stormed Howard Industries, a company of more than 4,000 employees that specializes in technology products based in Laurel, Miss.
It was the single-largest workplace immigration raid in U.S. history.
A few months later in November, a five-day statewide crackdown on immigration fugitives and violators by ICE agents in Florida yielded 111 arrests, according to agency officials. Ninety-six immigration fugitives and 15 violators were arrested during the operation, according to ICE spokesperson Nicole Navas. Those arrested had either entered the country illegally, overstayed or were deemed fugitives who refused to comply with court-ordered deportation.
Stepped-up immigration enforcement has spread across the country and – along with tougher hiring laws and the current economic climate – has clearly impacted the business community in general… and the self-service laundry business in several markets in particular.
“There has been a definite repercussion in our industry, due to the tightening of the federal immigration laws,” admitted Art Jaeger, a laundry owner in Southern California. “You read about plants being raided by the federal immigration authority and being put out of business, or about 300 or 400 people being declared ineligible for work. At that point, those workers need to change locations to look for work or just go home.”
Indeed, more aggressive enforcement of immigration laws and the current economic decline have combined to cause many illegal immigrants to decide to return home. In recent months, newspapers and television stations reported declining illegal immigrant populations in Colorado, North Carolina, Florida and Pennsylvania, lending credence to statistical and anecdotal evidence pointing toward an overall decline. Recent studies by the Pew Hispanic Center and the Center for Immigration Studies support the anecdotal evidence that illegal immigration to the United States is slowing and that illegal immigrants are returning home in relatively large numbers.
In Florida, the Miami Herald ran a series entitled, "Illegal Immigration: Changing Course." According to the Herald, "One of the longest and most profound immigration flows is experiencing quite a reversal. The combination of stepped-up border enforcement, aggressive prosecution of illegal immigrants and a weakening U.S. economy has done what decades of debate could not." In addition to a considerable amount of anecdotal evidence, the articles provide statistics from several studies to substantiate the assertion that illegal aliens are returning home.
According to MSNBC, the Mexican consul general in Denver, Eduardo Arnal, has noticed a decline in the Mexican immigrant population in Colorado. Arnal's perception was supported by numbers from the U.S. Census Bureau that show the number of Mexicans in Colorado dropped by more than 10,000 from 2006 to 2007. The consul general specifically pointed to a package of state immigration bills that passed in 2006 as one reason for the decline. These bills created a state patrol unit with the authority to enforce immigration law during routine patrols; prohibit immigrants from receiving state services unless they can prove they are in the country legally; and require police to report anyone they believe to be in the country illegally to Immigration and Customs Enforcement. "I can tell you with certainty that Mexicans are abandoning Colorado," said Arnal, adding that some "are considering returning to Mexico definitely."
In North Carolina, the News and Observer reported that North Carolina sheriffs departments had helped deport more than 3,000 illegal immigrants in 2008. North Carolina's Department of Public Instruction released figures in November showing that the number of Hispanic students enrolled in the state's education system had grown by less than 9,000 in 2008. In each of the past four years, Hispanic enrollment had grown by more than 13,000.
Additionally, the Mexican consulate in Raleigh has seen a surge in Mexican citizens applying for passports and seeking to secure dual citizenship for U.S.-born children – steps that would simplify a family's return to Mexico. Durham lawyer Miguel Munoz told the News and Observer that several of his Hispanic clients had told him they were returning to their home countries and would not be coming back. Munoz pointed out that many of his clients no longer had driver's licenses because of a change in North Carolina state law that makes it impossible for illegal aliens to renew them. This change of law, combined with the fear of law enforcement programs that allow officers to check immigration status and a weakening economy, Munoz said, has caused some Hispanics to leave the U.S.
An article by Reuters described illegal immigrants in Arizona, California and New York who are struggling to find work in the midst of the current economic slump. In Phoenix, a Mexican national told Reuters, "At one time, I worked 10 days straight. Now, I'm lucky to get a single day. I've never seen it so tough." A Salvadoran immigrant in Los Angeles noted, "It's only getting worse," while a Venezuelan man in New York said that he had only "worked two or three days last November."
Fox 29 in Chester County, Pa., noted several pieces of evidence indicating illegal immigrants in the Philadelphia area are returning to their native countries. According to the report, "49 percent of Latino immigrants in this country for less than five years say they're thinking about returning home." The report notes that some towns in the area enacted their own laws because the federal government was not doing enough to combat illegal immigration. Additionally, ICE officials told Fox that arrests in the Philadelphia region were up 23 percent during the current fiscal year over last. Finally, the report stated that many Latino immigrants "say it's becoming much harder to find a good paying job… and many of them say they're earning less this year than last."
According to the Pew Hispanic Center, there has been a drop in the annual "in-flow" of people illegally entering the country since 2005. And the numbers of those already here is going down. It peaked at 12.4 million in 2006 and is down by about 1 million now.
“What the analysts don't agree on is why,” said James Jay Carafano, a senior research fellow for national security at The Heritage Foundation. “Good enough data simply aren't available to answer the question. There are a number of possibilities, though. It could be simple economics, with fewer jobs translating into fewer illegal immigrants. Historically, whenever the U.S. economy has shrunk, fewer workers risk coming north to seek employment. They find economic opportunities at home or migrate to alternate destinations.”
In addition, “tighter border security, a significant expansion of the Border Patrol, the deployment of new technology and increased interior enforcement are having an undeniable impact," he added.
Less Money Sent Back
What’s indisputable is this: until recently, the amount of money Mexicans in the United States sent home was soaring. But according to a report released by the Inter-American Development Bank, remittances were expected to fall from $24 billion in 2007 to $23 billion in 2008. Meanwhile, the U.S. Department of Homeland Security has reported declines in border crossings. And last summer, the Center for Immigration Studies estimated that the number of illegal immigrants currently in the United States had declined since August 2007 from 12.5 million to 11.2 million.
Remittances are the second-largest source of foreign income for the country, following oil exports. Experts think that the decline could help push more Mexicans deeper into poverty as families there face rising prices on basic necessities.
"Families are receiving less money at the same time that the cost of food and the cost of fuel have risen," said Robert Meins, a remittances specialist with the Inter-American Development Bank in Washington, according to a Washington Post report. "So the money that is being sent is going a heck of a lot less far, so the impact is far more negative than the numbers actually portray."
The U.S. economy has played a role. The unemployment rate among Hispanics has risen faster than that of the entire U.S. population as a slumping construction sector has shed hundreds of thousands of jobs. The unemployment rate among all Hispanics in the United States was 7.7 percent last June, compared with the overall unemployment rate of 5.5 percent, according to the U.S. Labor Department.
In April, the Inter-American Development Bank published a survey of 5,000 Hispanic immigrants that found 50 percent of respondents were regularly sending money home to their families. That was down from 73 percent two years ago, when a similar survey was conducted.
Some researchers attributed the decline to general unease among immigrants stemming from the crackdown on illegal immigrants by federal authorities and some states.
"In times of uncertainty, people won't send as much money back, they will hoard the money," Meins said. "A lot of people are moving from one state to the next state, and in that period when they move, they have higher costs and they won't send as much money home."
However, some experts think that the Mexican central bank's numbers may reflect a shift by immigrants to less formal channels for transferring money home as immigration enforcement has stepped up.
Dilip Ratha, an economist with the World Bank, said that immigrants adopted more formal ways of sending money after the Sept. 11, 2001, terrorist attacks, using bank transfers, money orders, personal checks and other means that can be recorded by Mexico's central bank. With the crackdown on illegal immigrants, workers may be returning to more informal methods such as using human couriers or travel agencies, he said.
"What I feel is that the actual remittances are probably still continuing to rise, it is just that the officially recorded data are showing a decline," Ratha said. "Mexican workers are not using as visible remittance channels as before."
For Laundry Owners… A Double Negative
What does it all mean for laundry owners?
“Right now, it’s affecting everybody by way of customers and employees,” said Rich Heller, an Arizona laundry operator, whose state has passed one of the strictest immigration laws in the U.S. “As we all know, many coin laundries, on average, are probably in the 40 percent to 50 percent range as far as Hispanic clientele – so it’s affecting us greatly.”
Heller is in a unique situation, being located near the Arizona State University campus. As a result, his customer base is more diverse and only about 30 percent Hispanic.
“But, if out of that 30 percent I lose 50 percent of those customers, I have lost a lot of customers and a lot of revenue,” he said.
Laundry owner Kenny Wells, who also serves as president of the Texas Coin Laundry Association, said that he has heard negative revenue figures from fellow store operators that range from 5 percent to 20 percent.
“Immigration trends have had a dramatic effect in the Dallas metropolitan area, as well as in Houston,” he said. “There is a migration back to Mexico, but it affects Chicago as much as us. It used to be a Texas and Arizona issue, but it’s become a nationwide issue these days.”
It has certainly become an issue in the Carolinas, where Hispanics remain seasonal residents to help bring in the area’s peach and tobacco crops. However, with the housing market bust and regular ICE raids on the states’ poultry farms, they can no longer be counted on as steady laundromat customers.
“People are leaving,” said Lamar Thomas, a laundry distributor in North Carolina. “They’re leaving with a pickup truck full of furniture, and they’re not coming back.”
“I’ve got laundries dropping off 30 percent or 40 percent,” said South Carolina distributor Bill Gilbert. “And, this time of year, business should be increasing because of the cold weather. Granted the economy is not the best, so business is also dropping off for that reason. But most of the laundry owners who are struggling are in areas that have lost a lot of immigrants.
“I have a customer near a trailer park that had been 99 percent Hispanic. A lot of them are gone now, and it’s not like you can attract them from somewhere else. You can’t lower the prices or run daily specials. They’re just holding their breath right now.”
Clearly, not all areas are as affected by these immigration trends.
“There are large Hispanic communities in places you might not expect, like cold-weather cities,” Jaeger said. “I don’t think federal immigration has gone after those areas as hard, and I wouldn’t be surprised if more immigrants began moving into those areas.
“They’re coming primarily for the work, and if there is work in Minneapolis, they’ll go to Minneapolis. Look what happened when Hurricane Katrina hit. There was a tremendous amount of Hispanic workers arriving there to help rebuild. They will follow the work. They’re interested in working.”
As for the other side of the coin – namely, laundry attendants – Heller explained that his state’s new immigration laws, which put the onus squarely on the business owners to verify that their employees are indeed legally in the country, have proven to be a heavy burden.
Today, Heller and his fellow owners must be sure they clear prospective employees through E-Verify, which is an Internet-based system operated by the Department of Homeland Security in partnership with the Social Security Administration that allows participating employers to electronically verify the employment eligibility of their newly hired employees.
“Prior to the laws being enacted, it was not my responsibility to dig to see if the paperwork that my future attendant was handing me was real,” he said. “If someone came to work for me, I accepted them. I asked for proper identification, and I hired them. With the E-Verify system in place, I’ve personally had to reject at least 10 applicants based on that – and I had another five or six who, when I asked for their paperwork and told them I was running it through E-Verify, they admitted that they wouldn’t pass.
“I have a lot of friends in the golf industry,” Heller added, “and the same thing is occurring. One of my friends said he is one in 20 in finding landscapers who can successfully pass the E-Verify system.”
In Florida, laundry owner Tom Rhodes has experienced similar frustration.
“We need to get proper documentation when we hire people, and I know that has scared away some job candidates,” he admitted. “It keeps them from even applying for jobs with us, because they know we’re going to ask for their social security card. Some people don’t apply because they know they won’t pass the test.”
“The perfect storm has hit us all at once and, personally, I’m just trying to survive,” Heller explained. “First, we had the Arizona laws going into effect that chased a lot of immigrants out of the state, because they can’t get employed – a lot of our undocumented residents left, which took away some of our revenue.
“Then, the housing crunch out here took away more jobs, because we’re just not building the amount of homes we were three or four years ago.
“And, Number Three, with the current economic crisis we’re in, people are going to do less laundry, less wash-dry-fold, less everything. That’s the perfect storm – three major crises within that last year and a half converging.
U.S. Citizenship on the Rise
Despite some of the negative news for immigrants and laundry owners alike, the number of Mexican-born immigrants who became U.S. citizens swelled by nearly 50 percent in 2007 amid a massive campaign by Spanish-language media and immigrant advocacy groups to help eligible residents apply for citizenship, according to a government report.
In spite of Mexicans’ historically low rates of naturalization, 122,000 attained citizenship in 2007, up from 84,000 the previous year, with California and Texas posting the largest gains. Salvadorans and Guatemalans also showed significant increases at a time when the overall number of naturalizations declined by 6 percent.
At the same time, the number of citizenship applications filed doubled to 1.4 million in 2007, the report by the U.S. Office of Immigration Statistics found.
Of course, this surge in naturalization of Mexicans, their largest year-to-year increase this decade, came amid national debate over immigration reform. The report cited the campaign by Spanish-language media and community groups, along with a desire to apply before steep fee increases took effect, as two major reasons for the jump in naturalizations.
“Immigrants are tired of the tone and tenor of the immigration debate, which they feel is humiliating and does not recognize their contributions,” said Rosalind Gold of the National Association of Latino Elected and Appointed Officials’ Educational Fund, in a Los Angeles Times report. “That climate has fueled their desire to have their voices heard.”
Erica L. Bernal-Martinez, senior director of civic engagement for the association of Latino officials, said grassroots organizations planned to continue their push to encourage naturalizations among the estimated 4 million to 5 million eligible Latinos. Mexicans have historically had low rates of naturalization – 35 percent compared with 59 percent for all immigrants – but that appears to be changing as media and community organizations pour unprecedented resources and energy into their civic engagement campaigns, Bernal-Martinez said.
The new report found that California posted the largest gains in new citizens in 2007, from 153,000 the year before to 182,000; followed by Texas, from 38,000 to 53,000; and Illinois, from 30,000 to 39,000.
“We’re up 23 percent from last year for our walk-in business,” confirmed Los Angeles operator Beverly Blank. “Then again, we’re very densely populated. I would venture to say there may be as many as 10,000 people living within three or four blocks of the store. Of that number, most of them are from Central America and Mexico.”
Survival of the Fittest
Unfortunately, most self-service laundry locations don’t enjoy such incredible customer density.
“For me, I have to get leaner,” Heller said. “That means cutting back payroll, turning off lights in certain places. We’re doing everything we can to cut costs.
“My rent doesn’t change. My landlord doesn’t care about the immigration situation. And my utility rates don’t change, but yet my customer base goes down.”
For Jaeger, this situation just highlights the need for owners to have their laundries in such pristine condition that they are expanding their market beyond the “traditional target demographic of lower-income minorities.”
“You’ve got to grow the market,” he explained. “You’ve got to induce people to come out of their homes and apartment laundry rooms, and prove that your place is a better place to do laundry – cleaner, safer, more efficient and more helpful.”
Wells also thinks some laundry owners may have to tweak their current business models – perhaps targeting more wash-dry-fold business, rather than catering strictly to the Hispanic demographic, which is typically seeking only basic coin laundry services.
“We’re going to have to adapt to the market that is here,” Wells explained. “Adapt and modify our businesses. The coin laundry business is a survival type of business. We always adapt and survive.
“I got into the business 30 years ago,” he added. “And the people I was competing with at the time came to me and said, ‘Man, you’re doomed. This business is mature and dying.’ That was 30 years ago, and I’m still here.”
“The coin laundry business has been around for more than 50 years,” Heller agreed. “And I think it’s going to be around for another 50 years. But I believe that, like every other industry, we’re going to see a shakeout.”
Whether or not that shakeout will include what many today consider the industry’s “traditional” customer base remains to be seen.
Bill Gilbert, for one, is betting that it won’t. “More and more states are going to adopt immigration laws,” he predicted. “But the Hispanic immigrants will return to the areas where they’ve had jobs. I see that trend. It might not happen immediately, but the numbers will go back up.”
“I believe in the laws of our nation,” Heller added. “But I also see that we have a huge issue in front of us. We have many good people who have been here many years, working hard to support families. I know that, if I lived in Mexico, I would do anything in my power to get here to work. As business owners and just as people, we need to deal with this situation.”