PHOENIX (Reuters) - A month ago, Efrain Gaytan’s Mexican diner was bustling with migrant workers wolfing down a breakfast of eggs and burritos before they headed out to work as landscapers and day laborers across west Phoenix.

Oswaldo Alvarado helps customers at Importaciones Valentinas grocery and pinata store in Phoenix, May 11, 2010. REUTERS/Joshua Lott

But around 8 a.m. all but three tables are empty as customers rattled by Arizona’s tough new law cracking down on illegal immigrants stay away -- even though the law does not go into effect until July.

“Before, there would have been a lot of people eating breakfast but now everyone is worried that they’re going to get pulled over,” Gaytan, 42, said one recent weekday morning.

The Arizona law requires state and local police, after making “lawful contact,” to check the immigration status of anyone they reasonably suspect is in the country illegally.

Migrant-dependent businesses from cafes and car dealers to pinata shops in the state capital Phoenix say they already are taking a big hit as fear ripples through the Hispanic community.

Gaytan, whose bright, clean diner offers Mexican staples such as beef soup and spicy seafood dishes, says turnover slumped 35 percent to 40 percent after Arizona’s Republican Governor Jan Brewer signed the bill into law on April 23.

Polls taken immediately after it passed showed the law was supported by almost two-thirds of Arizona voters and a majority of voters nationwide. But opponents charge the state law is unconstitutional and a mandate for racial profiling. They are seeking to derail it court.

Some migrants targeted by the law already have begun heading back to their home country or moving to other states, selling off their belongings at numerous weekend yard sales in Latino communities across metro Phoenix.

Others are opting to stay put, while trying to limit their exposure to possible arrest -- a tactic that second-hand car dealer Richard Ruiz says has devastated his business selling cheap cars to low-wage migrants in the city.

“The people I sell to don’t want to buy, they don’t even want to drive,” said Ruiz, 31, who sells clunkers he picks up at auction to migrants for $1,000 to $2,000.

“They’re taking cabs now or asking people who have documents to drive them to work.”

‘IT WILL BE A GHOST TOWN’

Hispanics make up 30 percent of the desert state’s population of 6.6 million and their annual buying power is estimated at $31 billion, according to a recent study by the Arizona Hispanic Chamber of Commerce.

Of about 50,000 Latino-owned business in the state, most are small family-owned firms in the Phoenix area, the Chamber said. It has no hard estimate of the economic impact of the state immigration law on migrant-dependent firms.

However, some business owners say the plunge in spending since the measure was passed has thrown the future of their firms into doubt and threatened the jobs of their legal immigrant and U.S.-citizen employees.

Maritza Martinez, 36, who has a party planning business selling cakes and pinatas to a niche Hispanic market in west Phoenix, said she has placed the store’s lease on a month-to-month basis since the law was passed. She put her workers -- all of them documented -- on short hours.

“We normally work five days (a week) but now we’re each resting two or three days,” said Martinez, who said she has lost 70 percent of her bookings and taken on no new business since April 23.

Gaytan, meanwhile, a naturalized U.S. citizen born in Mexico, says the three legal employees who cook, wait tables and ring up checks at his diner now face an uncertain future as his income plunges.

“If it carries on like this, I’ll have to close and fire my workers,” said Gaytan, who is thinking of starting over in Oregon or New Mexico.

“They have all got their own families and they’re not going to want to go with me if I go to another state.”

With his livelihood fast disappearing, car dealer Ruiz also is thinking of joining migrants fleeing Arizona, the state he has called home since leaving his native Florida a decade ago.

“I don’t see what else I can do but leave,” he said. “There’s not going to be anything left here. It will be a ghost town.”