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Politics and economics at war on immigration issue

Politics and economics make for tumultuous bedfellows in North Alabama, never more so than now.

A package of bills, introduced last week by state Rep. Micky Hammon, R-Decatur, would effectively address a host of social problems stemming from illegal immigrants. The bills also might create strains on area employers who, according to state unemployment reports released last week, already are struggling to find enough employees.

Hammonís three bills would deny state economic incentives to employers who hire people who are in the country illegally, require people applying for or renewing professional or commercial licenses to prove legal status and require immigrants 18 or older to prove they are legally in the country.

They are get-tough measures that could succeed in their mission. But they come at a time when labor is hard to find.

The most recent state data has Morgan Countyís unemployment rate at 3.4 percent, which economists consider full employment. Those without jobs are either in a transition period from one job to another or for other reasons unable or unwilling to work. Limestone, Lawrence, Cullman, Marshall and Madison counties are no better, so area employers are not able to draw from adjacent counties.

Count on employer groups ó local and national ó to fight Hammonís bills with a proposal for short-term work visas. They will get support from some economists, who worry that contracting the labor supply will cause wage inflation or stalled productivity.

Hammon has said in the past he does not oppose liberalization of immigration restrictions. If economics require changes in immigration policy, he said when he introduced similar bills last year, the answer is not to ignore federal laws restricting immigration, but to change them.

Banks like immigrants

The potential banking bonanza available to those who serve the needs of immigrants came home to North Alabama when Banco Bilbao Vizcaya Argentaria S.A., the king of cross-border banking with Mexico, bought out Compass Bank.

Bank of America has joined the party, with a twist that appears to carve out the illegal-immigrant niche.

It last week introduced a credit card in border-state California that is unique in one respect: Applicants are not required to supply a Social Security number.

As Hammon is discovering, the economic forces benefiting from unhampered immigration are immense.

Housing prices up

Alabama housing prices increased 8.1 percent in 2006, the 14th highest increase in the United States.

During five years, housing prices in the state have increased 32 percent, according to a report issued this month by the U.S. Office of Federal Housing Enterprise Oversight.

The Decatur Metropolitan Statistical Area, which includes Morgan and Lawrence counties, was up 6.2 percent for the year and 19.7 percent over five years.

Mobile was the big winner in the state, with prices up 14.7 percent for the year and 39 percent over five years.

Thatís great news for real-estate sellers and developers, but could cause trouble for those with low incomes. The question is whether wages will rise proportionally.

Historically in Alabama, wages have not kept up with housing costs. At 3.3 percent, however, the statewide unemployment rate in January was even lower than Morgan Countyís. The U.S. rate was 4.6 percent.

There is no magic number at which unemployment rates begin boosting wages, but most economists expect it in the 5 percent range. Alabamaís low-income homeowners hope they are right.

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Eric Fleischauer
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