PHOENIX — Immigration is a main electoral issue across the country, but few places feel it more than Arizona, the only swing state along the southern border and home to one of the races that could make or break control of the Senate.

Arizona businesses say a worker shortage threatens to delay projects in industries such as construction, hospitality and agriculture, and that without changes to the federal immigration system, the economy could face a devastating blow.

About 16.2% of Arizona’s workforce is made up of immigrants, according to a American Immigration Council 2022 Study. Meanwhile, the state also faces a shortage of jobs, 197,000 in June, according to the Bureau of Labor Statistics.

Monica Villalobos, president and CEO of the Arizona Hispanic Chamber of Commerce, said the lack of labor is creating larger economic impacts, such as on housing prices.

“We have several members who are in the construction industry who cannot find workers to complete projects,” he said. “And when they can’t complete projects, that means there’s a lack of housing.”

Immigration has also been in the spotlight in the competitive Senate race between Democratic Rep. Rubén Gallego and Republican Kari Lake, a former news anchor and Republican candidate for governor of Arizona in 2022. The race is to fill the seat left independent senator Kyrsten Sinema.

While Congress has struggled to pass immigration reforms, Sinema and a bipartisan group of senators did so present a bill thatamong other things, there would be greatly expanded work permits to immigrants. Political pressure ultimately caused the bill to fail in a procedural vote.

Michael Infanzón, lobbyist for the Canyon State Business AllianceHe said the current legal immigration system is an “absolute fiasco” for both businesses that need employees and workers.

“Imagine if you wanted to go from Maryland to Virginia and it took you three years to get the paperwork to go from Maryland to Virginia to work for six months,” he told CNBC in an interview. “Are you going to keep doing that or are you going to jump over the border to do it and then come back?”

Gallego said he supports the bipartisan legislation. He has also called for adding more Border Patrol agents and making cross-border commerce more efficient.

“I have been focused on ensuring our ports of entry have the advanced technology and workforce to handle the cross-border trade our country depends on,” he said in a statement to CNBC.

Lake is a strong supporter of former President Donald Trump, the Republican presidential candidate, who is campaigning to launch the The largest national deportation in United States history.using the National Guard to help find those who are in the country illegally. Lake told CNBC that the worker shortage was because schools were not preparing students for the job market and that the solution was to improve schools.

“It sickens me that we have millions of people crossing our border about three hours from here, and getting jobs over and above our graduates coming out of our high school and college,” he said in an interview in his office. about a third of foreign-born immigrants in the state did not finish high school, according to the American Immigration Council.

John Graham, president and CEO of development company Sunbelt Holdings, said the United States does not have the workforce to fill jobs in industries such as construction and agriculture.

“The problem is these people aren’t taking someone else’s job,” he said, near a hotel his company is building in downtown Phoenix. “These are jobs that we absolutely must have, and there is no substitute for them if there were any type of significant labor loss.”

Graham is a board member of the American Business and Immigration Council, which sent President Joe Biden a letter in April asking him to “expand a special category of immigration permits for people who can fill positions where there are labor shortages.”

In addition to electing their next senator, Arizonans will vote on a proposal that, if approved, could allow state and local police to arrest noncitizens who crossed the border illegally if they had probable cause.

The dual proposals of mass deportation and allowing local authorities to arrest those in the country illegally could have a chilling effect not only on immigrants who are in the country legally but also on businesses looking to move to Arizona, Graham said.

The electoral measure evokes a 2010 state law That also made being in the country illegally a state crime. Additionally, the law made it illegal to knowingly hire or transport unauthorized immigrants, and made it a crime to fail to carry immigration documents.

The law led to racial discrimination and a decline in the number of workers in the state. A study carried out by the Grand Canyon Institute found that the 2024 ballot measure could cost $325 million annually if implemented.

Graham said the previous law “definitely created a business stigma for our state when conventions were canceled.”

“We were basically an outlier with a lot of businesses across the country because of that,” he said.