The U.S. Conference of Mayors meets today in Oklahoma City, Okla. They spent part of their morning, though, talking about Arizona. The mayors went on the record against Arizona's new immigration law that's set to go into effect at the end of next month. The one that makes it makes a crime to be in that state without the right papers. The mayors also want Washington to get its act together on federal immigration reform, so that state laws aren't necessary anymore. Some illegal immigrants in Arizona aren't waiting around.

By Jeff Tyler

All over Phoenix, you'll find yard sales, like this one -- Silvia Arias sells the possessions of four Hispanic families. They're undocumented, so they're moving some place else.

"Some are returning to Mexico," Arias said. "Some are moving to Albuquerque."

The new law -- requiring police to verify the legal status of immigrants -- has created a climate of fear.

"Everyone is migrating to other states to see if we can find a better life for our children," she said.

Leticia Munoz also wants a better life for her kids. She's been in the U.S. for 10 years. Now, she's planning to move her family back to Mexico.

"There really are no jobs there," Munoz said. "I don't want to go back. I have three children. But, these new laws really scare me."

She used to earn around $400 a month babysitting the children of other immigrants. But over the last year-and-a-half, Arizona has cracked down on businesses that employ undocumented workers. Many immigrants have lost their jobs, and they no longer need a babysitter. Leticia is down to making $90 dollars a month -- not enough to live on.

When she leaves, she'll pull her 8-year-old daughter out of school. It's a pattern that's creating chaos for the school district.

Impact on schools

"In the last five weeks, we're down about almost 100 students," said Jeffrey Smith, superintendent of the Balsz Elementary School District.

He says the state reimburses the district about $5,000 per child.

"The hundred students that we've lost translate into, I believe, a half-a-million dollars," he said.

The school year ended last Friday. During the summer break, more students are expected to leave town. If the district loses too much funding, it could be forced to cut teachers. Smith's also concerned about how the exodus will impact surrounding neighborhoods.

"It can blight a community," the superintendent said. "So you have apartments that are less and less full. Businesses close down. So we're very concerned about what effect this will have on the economy in this area."

But isn't the economic impact offset by the money taxpayers will save on social services? Probably not.

Judy Gans studies the economics of immigration at the University of Arizona. She says the state doesn't have a surplus of young, low-skilled workers. So, if Arizona kicks out all the illegal immigrants, and replaces them with Americans from other states, taxpayers will still have to subside the low-skilled workers.

"Any low-skilled worker generally is going to pay less in taxes than they consume in social services," Gans said.

Before the recession, Gans says immigrant labor helped fuel growth in construction, manufacturing and the hotel industry.

"One needs to be really careful about sort of thinking we can parse this and get rid of certain categories of workers without hurting the whole industry," she said.

Impact on businesses

The music is still upbeat at this strip mall in an immigrant neighborhood, but businesses here are suffering because so many Hispanics have left town. Francisco Noriega works at a jewelry store.

"People are afraid to go out now, you know what I mean? They don't want to spend money in case of an emergency," he said.

Noriega estimates his business has gone down about 70-80 percent.

Noriega is a U.S. citizen. The departure of his customers -- many of whom are undocumented -- could cost him his job.

"It's affecting every single one of us, really, a lot," he said.

And it's expected to get worse for local businesses next month. During a recent coffee talk at an elementary school, a group of 40 undocumented parents were asked, "How many of you will leave town if the law goes into effect at the end of July?" They all raised their hands.