Mandatory E-Verify Would Kill Jobs & Burden Businessesby Hugh Holub on Jul. 04, 2011, under immigration law reform, politics
Some “Jobs” Bill: Mandatory E-Verify Would Kill Jobs & Burden Businesses
Smith-Grassley Plan Will Expand Government Red Tape, Threaten Jobs of Legal Americans
Washington – Yesterday, Rep. Lamar Smith (R-TX) claimed that his mandatory E-Verify legislation “is not an immigration bill, it’s a jobs bill.” Judged through this lens, mandatory E-Verify is as much of a failure on economic measures and job creation terms as it is on immigration policy, as it would kill American jobs while burdening businesses with new red tape and costs.
According to Frank Sharry, Executive Director of America’s Voice Education Fund, “Some jobs bill. Mandatory E-Verify would destroy American jobs, pile burdensome and costly new requirements on small businesses, and decimate the ag industry, doing for the entire nation what Georgia farms are already experiencing. When Lamar Smith calls this a jobs bill, perhaps he’s referring to the new HR departments that small businesses will need to create in order to deal with the unfunded mandates that will soon be forced upon them. He’s certainly not referring to the 770,000 legal Americans who will lose their jobs due to database errors, and the millions more who will have to haggle with government bureaucrats to correct their records—just to be able to work.”
Here are three ways mandatory E-Verify will hurt job creation and our economy.
- Instead of creating jobs for Americans, this plan would cost Americans their jobs. Mandatory E-Verify would be a job-killer for 770,000 Americans and force millions more to spend time and money fighting with a government bureaucracy just to be able to work. Given the E-Verify system’s current error rate and the average rate of workers hired in the U.S., up to 3.6 million authorized workers would be forced to get their records corrected by a government agency or risk losing their jobs every year. To keep their jobs, they would be forced to navigate the Social Security Administration — which is already so overburdened that it turned away 3.3 million visitors to its offices in 2010 – and go through a bureaucratic process the Government Accounting Office has described as “formidable.”
- An “implementation tax” for small businesses, with expanded red tape and unfunded mandates. Mandatory E-Verify would cost small businesses an estimated $2.6 billion to implement. That’s $2.6 billion small businesses have to spend on government regulation, not job creation. Remarkably, these costs would be in exchange for a system that identifies unauthorized workers only 46% of the time. Adding onto these costs are the burdens and bureaucracies that would arise when a program currently used by only 4% of employers – and only 2% of small businesses – needs to scale up to encompass every employer in the nation within three years.
- Killing American agriculture – and American jobs in the process. Mandatory E-Verify would do for the country what Georgia growers are currently experiencing due to that state’s E-Verify law. Said Charles Hall, executive director of the Georgia Fruit & Vegetable Grower’s Association, “Fruits and vegetables in Georgia were worth $1.1 billion. We could see a $200 (million) to $250 million loss, potentially. The consumer may or may not see a difference in price.” Destroying American agriculture would also kill a range of associated jobs that rely on farm production. In fact, each American agriculture job generates three additional jobs upstream or downstream. Is the GOP jobs program really about sending unemployed factory workers to the fields?
Concluded Sharry, “For businesses, mandatory E-Verify would be about as convenient as going to the DMV on a Saturday morning, and as welcome to their bottom line as an IRS tax collector on April 15th. And it would be even worse for American workers, as it will add new bureaucratic hurdles and cost hundreds of thousands their jobs due to government mistakes. The more people learn about forced E-Verify, the more problems people have with this job killing proposal.”
America’s Voice Education Fund — Harnessing the power of American voices and American values to win common sense immigration reform.
From National Foundation for American Policy:
New Research: Making E-Verify Mandatory Will Be Ineffective in Reducing Illegal Immigration; Will Burden Employers, Workers
Analysis Recommends House Bill Should Sunset in 3 Years Unless Proven Effective
Arlington, Va. – H.R. 2164, the Legal Workforce Act, would make the American workplace less free, ensnare U.S. workers in government agency errors, expand the size and role of government and is likely to be ineffective in reducing the illegal immigration population in the United States, according to a new analysis by the National Foundation for American Policy, an Arlington, Va.-based policy research group.
E-Verify is an electronic employment verification system that employers can use to determine if a new hire (or current employee) is eligible to work in the United States. H.R. 2164 would require all employers to use the system within two years or face large fines or possible criminal prosecution. The House Judiciary Committee is expected to consider the bill as early as this month.
The report can be found on the NFAP website at www.nfap.com.
Stuart Anderson, NFAP’s executive director and the author of the study, said, “It appears only because the subject is immigration are lawmakers so willing to dramatically expand the role of government based on questionable promises and scant evidence that the legislation would achieve its stated objectives.” Anderson served as head of policy and counselor to the Commissioner of the Immigration and Naturalization Service from August 2001 to January 2003, and before that was staff director of the Senate Immigration Subcommittee.
H.R. 2164 represents a significant expansion of federal government power over U.S. employers and workers, the study found. In essence, the bill would require all new hires in America to gain approval from federal authorities to work for a new employer. Government data indicate more than 160,000 people a year, about 1 million over 6 years, will be forced to go to a federal government office or otherwise correct errors to work in America, although some estimates are much higher.
This analysis shows the following key issues with H.R. 2164 and its provisions to make E-Verify mandatory:
- E-Verify may be “free” to use but it’s costly to administer for companies, requiring a host of procedures and trained personnel for when new hires or employees experience problems with government databases. Filing an individual or corporate income tax return is free but it entails considerable compliance costs. Bloomberg estimates mandatory E-Verify would cost U.S. employers $2.7 billion a year to comply with the system, disproportionately affecting small businesses.
- Since most crop workers are working in the United States without legal status, an E-Verify system that seeks to remove such migrants from the labor force could leave many growers with insufficient labor to harvest crops, threatening many additional U.S.-based jobs in food production.
- Elected officeholders voting for H.R. 2164 would expose business owners to the genuine risk of losing their livelihoods because of a failure to follow government-mandated procedures. The significant increases in fines and requirements in H.R. 2164 could put small companies out of business, whether or not they have hired illegal immigrants, according to immigration attorneys.
- The record to date of E-Verify is one of ineffectiveness, with about half of illegal immigrants submitted to E-Verify shown incorrectly to be authorized to work by the system. This ineffectiveness will likely lead to calls for a national ID card or other biometric system to plug the perceived holes in E-Verify.
- H.R. 2164 will lead to an increase in government workers. Examining a bill in 2008 to make E-Verify mandatory, the Congressional Budget Office (CBO) estimated mandating E-Verify nationwide would increase federal spending by approximately $6 billion from 2009 to 2013 and by about $12 billion from 2009 to 2018. The CBO estimated the 2008 bill would lead to a decline of $17 billion in tax revenue over 10 years, caused primarily by pushing a number of illegal immigrants into the underground economy.
- Concerns about federalism are shunned aside in the bill, as the bill dictates the use of E-Verify for all new and existing employees in all states and even in local governments within 6 months of the bill’s enactment.
- Government data show many employers pre-screen applicants through E-Verify and do not offer them jobs, without providing individuals an opportunity to correct possible errors in government databases, a problem that will be worsened if E-Verify is made mandatory nationwide.
- H.R. 2164 would represent a massive expansion of E-Verify from approximately 250,000 employers today to over 5 million nationwide, including to many large states that do not now mandate E-Verify for all private employers, including California, Texas, New York, Florida and Illinois.
Despite the new burdens on both employers and potential employees, there is little evidence H.R. 2164 will produce a significant reduction in America’s illegal immigration population, the study found. Previous “enforcement only” measures in 1986, 1996, and in recent years have been followed by increases, not decreases, in illegal immigration. If Congressional supporters sincerely believe making use of E-Verify mandatory for all employers will be effective, then Congress should sunset H.R. 2164’s provisions within 3 years of enactment if E-Verify has not shown to reduce by half the illegal immigrant population in the United States. That would show supporters of E-Verify are not simply hoisting another mandate on employers and workers but are instead demonstrating the courage of their convictions.
About the National Foundation for American Policy
Established in the Fall 2003, the National Foundation for American Policy (NFAP) is a 501(c)(3) non-profit, non-partisan public policy research organization based in Arlington, Virginia focusing on trade, immigration and related issues. The Advisory Board members include Columbia University economist Jagdish Bhagwati, Ohio University economist Richard Vedder, former U.S. Senator and Energy Secretary Spencer Abraham and other prominent individuals. Over the past 24 months, NFAP’s research has been written about in the Wall Street Journal, the New York Times, the Washington Post, and other major media outlets. The organization’s reports can be found at www.nfap.com.