Small-Town Quarrel, Big Implications

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The Hazleton decision comes as federal efforts to address the immigration issue are in complete disarray. Earlier this year, leaders in the Senate worked for months on a comprehensive immigration reform proposal, which had the support of prominent Democrats and Republicans as well as President Bush. But the initiative stalled after anti-immigrant groups claimed it would provide "amnesty" to the estimated 12 million illegal immigrants in the country.

The lack of any new federal legislation has created uncertainty for many businesses. Business leaders in construction, agricultural, and other labor-intensive fields say they're facing worker shortages, as they're squeezed between local anti-immigration efforts and a U.S. Congress that can't pass federal legislation. Gould says the situation is going to get worse before it gets better. "They have decided not to fix this problem," he says. "And if they wait two more years or three more years, it's just going to get worse."

Tech companies have also felt the squeeze (see BusinessWeek.com, 7/19/07, "Beware the H-1B Visa"). A coalition that includes Microsoft (MSFT), IBM (IBM), Google (GOOG), Intel (INTC), Motorola (MOT), and others has been pressing the federal government to allow more skilled workers into the country, both on a temporary and permanent basis. That effort has also been stalled as the immigration effort has become, in the words of American Immigration Lawyers Assn. President-Elect Charles Kuck, "radioactive" (see BusinessWeek.com, 7/17/07, "The Gandhi Protests Pay Off").

Grassroots Affair

In Hazleton, Barletta and other local officials drew fire in part because of the harsh measures in their legislation. The ACLU criticized the proposed law because it could have turned town residents against each other, with accusations from one resulting in investigations of another. Any Hazleton resident, business owner, or official could lodge a complaint about illegal immigration and the town's Code Enforcement Office would be required to request identity information from a business or landlord within three days.

Local critics say that, although the legislation had not been officially implemented, it had already made police officers and others more aggressive toward Hispanics. "This ordinance had brought an incredible amount of division," says Rodolfo Espinal, president of the Hazleton Hispanic Business Assn. "It turned this town upside down." Espinal says the local Hispanic community is very happy with the court's ruling—and hopeful that the town's divisions will begin to mend. "Hopefully, everything is going to come back to normal," he says.

Join a debate about H-1B visas.

Elstrom is news director at BusinessWeek.com.