Florida Immigration Law Could Trigger Mass Labor Shortage

A sweeping anti-immigration bill signed into law by Florida Gov. Ron DeSantis last week could exacerbate a labor shortage in the state, according to experts.

SB 1718 bolsters the governor's migrant relocation program and expands requirements for businesses with more than 25 staffers to use E-Verify, a federal system that determines if employees can legally work in the U.S.

The law, which takes effect on July 1, also prohibits local governments from providing money to organizations that issue identification cards to immigrants lacking permanent legal status in the U.S. and invalidates out-of-state driver's licenses held by people living in the country illegally.

Experts told Newsweek that the use of the E-Verify system could have a "substantial" impact on the labor supply in Florida. This would increase prices for consumers and have a negative impact on important sectors of the state's economy, such as tourism.

However, they also said that it could raise wages for those who remain, and be particularly positive for women in the workforce. The issue of low wages for blue-collar workers has become an important and divisive aspect of the debate around immigration.

"Using the E-Verify system to confirm the eligibility of employees to work in the U.S. can decrease the number of undocumented workers in the labor market, resulting in a reduction of the overall labor supply," said Hector Sandoval, an assistant professor in economics at the University of Florida and the director of the Economic Analysis Program at the university's Bureau of Economic and Business Research.

He pointed to research that studied the impact of a 2007 Arizona law that mandated all employers verify the identity and work eligibility of new hires using the E-Verify system.

"That study found that the prime-working age noncitizen Hispanic population with relatively low levels of educational attainment decreased by 1.5 to 2 percentage points as a result of the law," Sandoval told Newsweek.

He said with a shrinking pool of workers in Florida, employers "may face additional challenges filling open positions, and will likely have to raise wages to attract legal workers.

"Given Florida's large immigrant population, the impact of the E-Verify system on the labor supply could be substantial."

Madeline Zavodny, a professor of economics at University of North Florida, told Newsweek that in most states, requiring all employers to use E-Verify "has reduced the number of recently arrived undocumented immigrants."

Zavodny said it also often raises hourly wages for those who remain.

"So employers are at a double disadvantage, it's harder to find workers and they have to pay more for the ones they can get," she said.

Zavodny co-authored a study in 2020 that found an increase in employers enrolled in E-Verify adversely affects men who are likely to be unauthorized immigrants, but has positive effects among corresponding women.

Sandoval noted that a reduction in the labor supply could negatively impact Florida's economy.

"Florida's labor market is currently tight, with an unemployment rate of 2.6 percent over the past three months," he said.

"This means that a reduction in the labor supply could pose a significant challenge to the state's economy, particularly in industries such as tourism, which will face high demand during the upcoming summer months. Moreover, the potential impact on wages may contribute to inflation, adding further challenges to Florida's economy."