Hispanic Panic in Arizona

Tough immigration laws are having an effect in Arizona:

PHOENIX, Arizona (AFP) — One month after Arizona introduced a law cracking down on businesses which employ illegal immigrants, Latino workers are fleeing the state and companies are laying off employees in droves, officials and activists say.

Arizona has become one of the frontlines of the US immigration debate and broke new ground on January 1 with a law that threatens to put of business companies which knowingly hire undocumented workers.

The effects of the law have been immediate, according to businessmen, workers and rights activists who spoke to AFP, with companies driving up wages to attract labor while being forced to part company with prized employees.

Even though a federal judge ruled last week that there will be no prosecutions under the law until March, it has done little to prevent a phenomenon being dubbed "Hispanic Panic."

"There's a lot of fear and some people are leaving," said Salvador Reza, an immigrant-rights activist who runs a day labor center in Phoenix.

"The fear is not only at the worker level, it's at the employer level. I've never seen that before in my life."

Workers are going back to Mexico or to other states, Reza said. He predicted small businesses forced to lay off skilled employees like welders will now pay them in cash, creating a black economy.

"The underground economy is going to take hold now, and there will be less money for the state," Reza said.

Or, the higher wages employers will be paying will mean higher tax payments and increased spending, and those jobs that Americans "just wouldn't do" will be done by Americans because employers are finally paying what the jobs are really worth.