When Alabama passed America’s most aggressive immigration law last year, legislators heralded the bill as a cure for the state’s high unemployment.

Under the new law, virtually all interactions with any government official would become a test of an immigrant’s status—from roadside stops by police, to enrolling children in public school, to paying a utility bill.

The idea was to make it so difficult for illegal immigrants to live and work in the United States that they would simply pack up and leave, freeing up thousands of jobs for out-of-work Americans.

Leave they did. Officials say Alabama’s illegal alien population fell by 75,000 in the three months following the bill’s passage. But when it came to putting more Americans back to work, the reality has proven to be a lot more complicated.

Alabama’s poultry processing industry complained it couldn’t find enough local workers willing to spend long hours gutting chickens for low pay. Companies, it has emerged, are being forced to import African and Haitian refugees to do the work.

Meanwhile, Alabama became the butt of international jokes when police arrested a German Mercedes-Benz executive as well as a Honda manager from Japan for allegedly not having their proper immigration papers with them during roadside stops. Both were on temporary assignments overseeing Alabama’s burgeoning foreign auto industry; Honda has more than 4,000 employees in Alabama, with an investment worth $1.4 billion.

Rival states quickly turned news of the arrests into a chance to promote themselves as more friendly to international business. “We are the ‘Show Me State,’ not the ‘Show Me Your Papers State,’ ” trumped Missouri’s St. Louis Post-Dispatch.

It’s not just Alabama that is struggling with the fallout from its tough stand on illegal immigrants. Five other states have also enacted such laws. Georgia witnessed an estimated 40 per cent drop in the state’s farm workers, triggering nearly $140 million in agricultural losses in 2011 as unpicked produce rotted in fields. The state has since begun shipping in prisoners to help at harvest time. In Arizona, churches complained they witnessed an immediate drop in attendees and donations after immigration laws went into effect. One church reportedly went into foreclosure.

Far from putting more Americans back to work, business leaders complained the laws were discouraging foreign investment. Spanish bank BBVA Compass has scrapped plans for an $80-million office tower in Birmingham over immigration concerns. “We’ve used difficulties in other states to make sure those people come and look here,” David Bronner, head of Alabama’s pension system, told the Birmingham News. “We’ve just used a hammer and we’ve hit ourselves over the head with it.”