Business Update with Mark Lacter

How immigration reform could affect business in Los Angeles

The US Senate overwhelmingly approved the first part of a massive immigration package on Monday, and the entire bill could be voted on later this week.  KPCC's business analyst Mark Lacter says this is very important legislation that has substantial support in the Senate, but there's a big question mark in the House.

Steve Julian: Mark, how does it affect business?

Mark Lacter: Steve, there's not much doubt about the benefits of having undocumented workers in this country, especially in the L.A. area where they're really an intrinsic part of the economy.  The Congressional Budget Office says that tax revenue from legalized immigrants that would come as a result of immigration reform will reduce the federal deficit by $175 billion over the next 10 years - that's enough to offset additional spending for things like tax credits and Medicaid.  Frankly, the question is less about economic benefits for the nation than it is about benefits for undocumented workers.  You know, 20 or 30 years ago an immigrant with limited educational skills could come into this country, this area, and still have opportunities to move up the economic ladder, to buy a home, to send his kids to college.

Julian: Sure, L.A. had lots of higher-paying manufacturing and construction jobs that formed the basis of a middle class workforce.

Lacter: Well, many of those jobs no longer exist.  So, what you have are lots of recent arrivals who remain stuck with low-wage jobs and modest educations (you should know that almost half of all undocumented immigrants have either no school at all or less than a high school education).

Julian: Does that explain why the numbers of people entering this country actually have been slowing?

Lacter: That's part of it.  Now, if you're looking for legislation that would be worthwhile for the economy, there's the Dream Act, which would give legal status to immigrants who were brought into this country before they turned 16.  These are people who are in the sweet spot of their career development, but House Republicans are so opposed that they recently blocked efforts by the Obama administration to keep these people in the U.S. on a temporary basis.  Again, these are not economic issues - they're political, cultural, and social issues.  But, if you're the owner or potential employee of a business, it doesn't much matter - it's still hitting you hard.

Julian: Mark, a transient in Hollywood was charged with murder last week; police say he stabbed a woman to death.  What's the mood around Hollywood and Highland now?

Lacter: Well, there's been a huge effort to rejuvenate the area - for the most part, successfully - and now, they're having to deal with that horrible incident along one of the busiest stretches in Hollywood (and in the early evening, when there are hundreds of people walking the streets).  What's worth remembering is that overall crime in the Hollywood area has been going down - it's just that you still have a population of panhandlers and other transients - a number of them mentally ill - who still congregate in that area.

Julian: Police say they've tried to clamp down on aggressive panhandling - that's when people get badgered for money...

Lacter: ...which seems to have led to the stabling incident.  Thing is, the courts have put restrictions on what the cops can do, and - in any event you - can't have them stationed at every corner all the time.  Now, obviously the local business community is concerned - you might recall what happened in Westwood Village so many years ago.  That's when a gang shootout resulted in the death of a young woman.  It was really a freak event - as appears to be the case in Hollywood - but, the shooting took on a life of its own because all of a sudden the area was not considered a totally safe spot.

Julian: Which is the case in other parts of Southern California…

Lacter: That's right, parts of downtown L.A., Santa Monica, and Pasadena have morphed into higher-end business districts, but which still have transient populations that local businesses are having to deal with.  What you have is a social issue that affects the economy.

Mark Lacter is a contributing writer for Los Angeles Magazine and writes the business blog at LA Observed.com.


blog comments powered by Disqus