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Small Businesses: Rule-breakers Get An Edge

By JOYCE M. ROSENBERG

NEW YORK (AP) â¿¿ She could save money, and there's a good chance she wouldn't get caught, but Consuelo Gomez says she won't hire people who aren't authorized to work in the U.S. to work for Marty K, her cleaning and landscaping business.

Gomez says she believes that she's being undercut by competitors that hire workers who are in the U.S. without permission from the government. When potential clients tell her that her competitors can do the same work for a lot less, it makes her suspicious.

"I'll hear, 'they're $2,000 cheaper than you,' and I say, 'that's impossible,'" says Gomez, whose business is located in Bellevue, Wash. "I can't fathom how they do it because we would lose money."

If Gomez's hunch is correct, she's dealing with a little talked about problem that a lot of small business owners say makes survival difficult. Competing with companies that hire immigrants who aren't authorized to work in the U.S. is tough for a small business that follows the law because of the cost. Often, businesses pay ineligible workers less, and they also save on taxes.

Sixty-eight percent of business owners surveyed last month by the advocacy group Small Business Majority said too many companies gain an unfair advantage by hiring immigrants who aren't eligible to work in the U.S. In 2008, the Pew Research Hispanic Center estimated that 8.3 million people were working in the U.S. without permission. Current estimates put the total number of people in the U.S. without permission at about 11 million. The issue is in the forefront now as lawmakers propose ideas to reform the country's immigration laws.

"What small businesses want the most is a level playing field where they can compete fairly," says John Arensmeyer, CEO of Small Business Majority. "Unless we fix the immigration system, small businesses are going to continue to operate at a disadvantage with companies that aren't following the law."

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