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PHOENIX — Illegal immigrants in Arizona, frustrated with a flagging economy and tough new legislation cracking down on their employers, are returning to their home countries or trying their luck in other states.

For months, immigrants have taken a wait-and-see attitude toward the state's new employer-sanctions law, which takes effect Jan. 1. The voter-approved legislation is an attempt to lessen the economic incentive for illegal immigrants in Arizona, the busiest crossing point along the U.S.-Mexico border.

And by all appearances, it's starting to work.

"People are calling me telling me about their friend, their cousin, their neighbors — they're moving back to Mexico," said Magdalena Schwartz, an immigrant-rights activist and pastor at a Mesa church. "They don't want to live in fear, in terror."

Martin Herrera, a 40-year-old illegal immigrant and masonry worker who lives in Camp Verde, 70 miles north of Phoenix, said he is planning to return to Mexico as soon as he ties up loose ends after living here for four years.

"I don't want to live here because of the new law and the oppressive environment," he said. "I'll be better in my country."

He called the employer-sanctions law "absurd."

"Everybody here, legally or illegally, we are part of a motor that makes this country run," Herrera said. "Once we leave, the motor is going to start to slow down."

There's no way to know how many illegal immigrants are leaving Arizona, especially now with many returning home for normal holidays visits. But economists, immigration lawyers and people who work in the immigrant community agree it's happening.

State Rep. Russell Pearce of Mesa, the author of the employer sanctions law, said his intent was to drive illegal immigrants out of Arizona.

"I'm hoping they will self-deport," Pearce said. "They broke the law. They're criminals."

Under the employer sanctions law, businesses found to have knowingly hired illegal workers will be subject to sanctions from probation to a 10-day suspension of their business licenses. A second violation would bring permanent revocation of the license.

Nancy-Jo Merritt, an immigration lawyer who primarily represents employers, said her clients already have started to fire workers who can't prove they are in the country legally.

"Workers are being fired, of course," she said. "Nobody wants to find out later on that they've got somebody working for them who's not here legally."

When immigrants don't have jobs, they don't stick around, said Dawn McLaren, a research economist at Arizona State University who specializes in illegal immigration.

She said the flagging economy, particularly in the construction industry, also is contributing to an immigrant exodus.

"As the jobs dwindle and the environment becomes more unpleasant in more ways than one, you then decide what to do, and perhaps leaving looks like a good idea," she said. "And certainly that creates a problem, because as people leave, they take the jobs they created with them."

Pearce disagreed that the Arizona economy will suffer after illegal immigrants leave, saying there will be less crime, lower taxes, less congestion, smaller classroom sizes and shorter lines in emergency rooms.

"We have a free market. It'll adjust," he said. "Americans will be much better off."

He said he's not surprised illegal immigrants are leaving the state and predicts that more will go once the employer-sanctions law takes effect next month.

"It's attrition by enforcement," he said. "As you make this an unfriendly state for lawbreakers, I'm hoping they will pick up and leave."

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The rule of law can prevail..justice at last

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