Business strategically silent on immigration.

Like many L.A.-area business owners, Manolo Cevalos has an opinion on the hot-button issue of illegal immigration reform that's pending before Congress.

In his case, it lands on the side of those who favor more lenient treatment of workers not in the country legally.

"Undocumented workers are not criminals or terrorists and should not be treated like that. We have to see them as human beings. They need a guest-worker program to get them off the streets and give them jobs so they can eat and sleep," said Cevalos, who owns a marketing company called MCG Entertainment.

But Cevalos is also vice chair of the Los Angeles Metropolitan Hispanic Chamber of Commerce, which has not taken an official position on illegal immigration reform legislation that has so galvanized the Latino community in recent weeks, sending 500,000 people to the sweets of downtown Los Angeles.

"As a chamber, on sensitive issues, we give the members of the board the freedom to express their own views. This is a sensitive issue," Cevalos said.

The L.A. Metropolitan Hispanic Chamber of Commerce is hardly alone in its unwillingness to take a stand on illegal immigration reform. In fact, even as hundreds of thousands of people take to the streets, the local business community has been conspicuously silent.

Two of the major business advocacy groups in the county--the Los Angeles Area Chamber of Commerce and the Valley Industry and Commerce Association--have not yet taken a stand, though both are evaluating various immigration reform proposals.

Last week, L.A. Area Chamber president and chief executive issued a commentary on the topic, essentially saying that the House bill from Rep. James Sensenbrenner, R-Wis., was too draconian and that a more rational approach was needed.

"I do not condone breaking the law, but let's face it: many of our state's top economic producers rely on immigrant labor to turn a profit and keep consumer prices low," he said.

But Hammer stressed that his view was not that of the Chamber, which has yet to take up the issue among its board. VICA is only slightly further along, with a policy committee set to examine the competing reform proposals at its April meeting.

Smaller groups, like the Culver City Chamber of Commerce, have no plans to look at the issue.

"No one has brought it to my attention," said Stephen Rose, president of the Culver City chamber.

The low-profile approach on immigration reform doesn't surprise many immigration experts.

"It's a no-win situation for business to take a public stand on this issue," said Harry Pachon, president of the Tomas Rivera Policy Institute at the University of Southern California. "If they come out in support of a guest-worker or legalization program, they will offend many in the Republican Party who are their natural allies on other issues," Pachon said. "If they support legislation that cracks down on illegal immigration, that puts them at odds with an emerging demographic, especially here in Los Angeles."

Crucial factor

Yet, thousands of local business owners have a direct stake in the outcome of the debate now going on in Washington. Construction companies, janitorial firms, hotel conglomerates and businesses in dozens of other industry sectors routinely hire undocumented workers, either to fill jobs that otherwise they would have difficulty filling or to cut labor costs--or both.

Indeed, undocumented workers are such a pivotal part of the L.A. economy that many sectors would largely cease to function if the worker pool was suddenly cut off.

Undocumented workers make up nearly two-thirds of the county's large and growing "informal economy" that operates outside of traditional wage and salary employment according to Dan Flaming, president of the Economic Roundtable.

The Roundtable, an L.A.-based, non-profit public policy research organization that examines the local labor market and other economic issues, released a report on the local informal economy last fall.

"In the 1990s, we had 1.5 million residents move out of Los Angeles, which took a significant bite out of our population and labor force and could have set us on the path of older industrial cities like Pittsburgh or Detroit," Flaming said. "What filled that vacuum was the arrival of 1.1 million immigrants that provided a crucial source of labor and also gave birth to a new set of industries.

"If it bas not been for the growth of that informal sector, we would now be in the 16th year of a recession that began in 1990 and would have had no end in sight," Flaming added.

The Roundtable, citing U.S. Census Bureau and Immigration and Naturalization Service figures, estimated there were about 770,000 illegal immigrants in Los Angeles County in 2000--more than a0.y other county and even any other state, with the exception of Texas.

Individual business owners who draw on this informal sector for their employees would be directly affected by several aspects of the reform proposals. If the Sensenbrenner legislation, which passed the House last December, were to become law, employers would be subject to criminal penalties if they hired undocumented workers or workers whose identifications turned out to be forged.

The Senate, though, has been less receptive to the Sensenbrenner proposal, especially after last month's massive protests. Instead the locus last week was on setting up a guest-worker program, with the key issue for debate being whether workers in that program would eventually be able to apply for citizenship.

One local employer that hires immigrant workers would welcome a guest-worker program.

Patsy Flanigan, president and chief executive of Culver City-based Flanigan Farms Inc., said her company relies on immigrant workers to harvest the nuts that it grows for retail packaging.

"Last year, I was not able to completely harvest my crop because I wasn't able to get enough workers," Flanigan said.

"Certainly we don't want to be illegal. But there needs to be some sort of guest-worker program so that we can have workers," she said. "The Sensenbrenner bill is not the solution."

Flanigan, who is a member of both the L.A. and Culver City chambers, said she has not actively lobbied on the issue. 'Tin just watching it right now. We're kind of pawns in the middle of all this."

Clear risks

For other business owners who hire undocumented workers, there's another reason to keep a low profile: if they step forward, they could become the target of enforcement actions.

"If you stick your head up, you make yourself visible to enforcement agencies," said Paul Ong, director of the Lewis Center for Policy Research at the University of California Los Angeles.

For example, Ong cited an instance several years ago in which an L.A. area car wash owner was reported in a news story to have hired undocumented workers.

"Within weeks, there was the state Labor Department and a whole host of other agencies making a huge sweep of local car washes for illegal immigrants and wage and hour violations," Ong said.

That in turn raises another issue: the potential for a split among business ranks between those businesses that rigorously check their hires and observe all the wage and hour laws and those that don't. Many business owners who do comply with all the laws say there needs to be more enforcement against those who don't.

"If employers are hiring people who are not here legally, they are breaking the law," said Marty Cooper, former chairman of VICA and a partner in Cooper Beavers Inc., an Encino-based public relations company.

Cooper said that if employers don't like this law, they should focus on changing it. "I don't see why there shouldn't be a guest-worker program so that employers can hire these workers legally," he said.

But Cooper said that this was not a pressing issue for those businesses that don't have to resort to hiring undocumented workers.

"Urban professional businesspeople like myself are much more concerned with the unfriendly business climate, high taxes and workers' compensation than illegal immigration."

California Leading

Undocumented immigrants by state,
estimated, in thousands.

                      1990        2000

California           1,476       2,209
Texas                  438       1,041
New York               357         489
Illinois               194         432
Florida                239         337
Arizona                 88         283

Sources: U.S. Immigration and
Naturalization Service, U.S. Census Bureau

Immigrant Haven

Undocumented residents and workers in 2000, estimated in millions.

                   Population         Non-Citizen
                                      Population

California            33.8                5.4
L.A. County            9.5                2.2
L.A. City              3.7                1.0

                  Undocumented       Undocumented
                   Population           Workers

California             2.2                1.0
L.A. County           0.77               0.40
L.A. City             0.38               0.19

Sources: U.S. Immigration and Naturalization Service; U.S.
Census Bureau