Tag: immigration reform

E-Verify Deepens Projected Budget Deficits

On Wednesday, the Congressional Budget Office (CBO) released a cost-estimate for the Legal Workforce Act (H.R. 1772). That bill is one part of the House Republican’s immigration reform package that would nationally mandate a version of E-Verify.

Source: CBO Cost Estimate for H.R. 1772 Legal Workforce Act, page 2.  

CBO notes that many unverifiable employees will be pushed deeper into the underground economy by E-Verify – something that is already occurring in states that mandate its use. Some employers would no doubt continue to pay unverified employees, but would do so off the books and off the radar of the IRS and Social Security Administration. While the government would receive an expected $49 billion in on-budget revenues from new sources of income tax revenue and payroll tax revenue from 2014 to 2023, it would lose $88 billion in off-budget revenue during the same period – mostly from Social Security payroll taxes lost as workers join the underground economy. That’s a $39 billion net loss to revenues due mainly to E-Verify.

My colleagues and I have written extensively about the threat that E-Verify poses to employees, employers, and civil liberties. The CBO estimates that expanding E-Verify would cost the federal government $635 million over the 2014-2018 period, followed by a similar amount from 2018 to 2023. That translates to roughly $1.2 billion in new hires, data retention systems, enforcement tools, and other goodies for the Department of Homeland Security.

The Legal Workforce Act would also impose costly new mandates on state and local governments and the private sector. The CBO estimates at least $10 million in total annual costs to be imposed on state and local governments that will be forced to comply (currently, only 20 states mandate the use of E-Verify for new public hires). And the office estimates a minimum cost of $200 million annually from 2016 to 2018 for private sector employers as they struggle to verify an estimated 50 million employees.

The Legal Workforce Act imposes new costs on the federal government, on state and local governments, on employers and employees, and will push some workers further into the underground economy – all without (thankfully) achieving its core objective of excluding unauthorized immigrants from the workforce. While the CBO may not be known for its accurate fiscal projections, the inevitable net fiscal costs of this bill make it hard to draw anything positive from this recent report.    

This post was written wtih the help of Scott Platton.   

E-Verify Can Now “Lock” Social Security Numbers

Immigration reform is taking its time in Congress but the executive branch agencies charged with enforcing immigration laws have not been idle. Rather, they’ve been implementing bits and pieces of the reform package on their own – but not any of the good ones. 

Last month, the U.S. Citizenship and Immigration Services (USCIS) announced that it will “lock” a Social Security number when E-Verify or USCIS employees, based on new algorithms, believe the number is fraudulent or used fraudulently. The number is locked and a tentative non-confirmation (TNC) is issued to the applicant or applicants using the contested number – preventing any further E-Verify confirmations until the fraudulent user proves he or she is the lawful holder.

Although my colleagues and I have written extensively about the E-Verify system and its threat to liberties and economic growth, locking adds a newer negative dimension.   

“Locking” was proposed as part of the summer’s comprehensive immigration reform bill that was passed by the Senate and in the House’s Legal Workforce Act. Locking was a bad idea in those bills and remains a bad idea today when implemented by regulatory fiat.

Immigrant Attitudes toward Libertarian Values

A recent paper by psychology Professor Hal Pashler of UCSD analyzes General Social Survey (GSS) data and finds that immigrants are less libertarian than the U.S.-born.  This is an interesting paper and professor Pashler notes the many limitations of his findings – mainly that the GSS doesn’t ask many questions that are good barometers of libertarian ideology.  But that hasn’t stopped non-libertarian immigration opponents from using the paper’s conclusion to try and convince libertarians to oppose immigration reform: “With increasing proportions of the US population being foreign-born, low support for libertarian values by foreign-born residents means that the political prospects of libertarian values in the US are likely to diminish over time.” 

Here are some reasons why Pashler’s paper shouldn’t worry libertarians much or convince many to oppose immigration:

First, libertarians generally support immigration reform, the legalization of unauthorized immigrants, and increasing legal immigration because it is consistent with libertarian principles – not because immigration reform will lead to breakthrough electoral gains for libertarian candidates.  The freedom for healthy non-criminals to move across borders with a minimum of government interference is important in and of itself.  General libertarian support for immigration reform does not depend upon immigrants producing a pro-liberty Curley effect – as nice as that would be. 

Second, under free immigration the freedom of current Americans to sell to, hire, and otherwise contract with foreigners would increase substantially.

Third, the ideological differences between the U.S.-born and immigrants are relatively small for some of the questions Pashler analyzes.  For instance, the GSS asked whether the government should do more or less to reduce economic inequality with a response of “1” meaning the government should do much more and a score of “5” meaning the government should do much less.  The average score for immigrants was a 2.75 while the average score for the U.S.-born was 3.18 – a statistically significant difference but hardly one that will push the U.S. toward central planning.

Don’t Confuse Immigration “Style” with “Substance”

Some are making a lot of hay over Senator Rubio’s (R-FL) supposed flip-flop on immigration reform whereby he now supports a House strategy of piecemeal bills as opposed to one large comprehensive package that he helped push through the Senate. Rubio has even stated that he opposed going to conference with his Senate immigration reform bill and any individual bill passed by the House. 

Rubio’s statement is not a flip-flop—it is a public acceptance of the way immigration reform will work in the House and not a repudiation of immigration reform. For a long time the word “comprehensive” has been a dirty word among Republicans and this is just a loud public statement by a pro-reform Senator—arguably the leader of immigration reform this year—moving against that word and the strategy it represents. Piecemeal bills were going to be the strategy in the House—as has been known for months. There is no surprise here.    

But his change is purely strategic, and not very substantive. As a spokesman for Senator Rubio stated:

The point is that at this time, the only approach that has a realistic chance of success is to focus on those aspects of reform on which there is consensus through a series of individual bills … Otherwise, this latest effort to make progress on immigration will meet the same fate as previous efforts: failure.

E-Verify’s Continued Ineffectiveness

Now that the government shutdown is over, Congress’ attention will turn to other issues.  There is a possibility that a series of immigration reform bills will be voted on in the House of Representatives before the end of the year.  One bill will certainly include mandatory E-Verify.

As my colleagues and I have written over the last several years, E-Verify is bad for businesses, taxpayers, the privacy of all Americans and residents, economic growth in general, and it won’t stop unlawful hiring.  Don’t believe me on the last point?  Just look at Arizona.  Here is a table of the number of all new hires in the state and the number of E-Verify queries run per quarter:

Year, Quarter

All New Hires

E-Verify Queries

Percent

2008, 1

558,949

36,723

6.6%

2008, 2

563,980

238,593

42.3%

2008, 3

533,502

265,452

49.8%

2008, 4

563,744

276,371

49.0%

2009, 1

385,166

197,612

51.3%

2009, 2

376,634

167,313

44.4%

2009, 3

353,744

172,350

48.7%

2009, 4

477,636

184,053

38.5%

2010, 1

353,612

160,790

45.5%

2010, 2

427,575

199,885

46.7%

2010, 3

384,026

310,648

80.9%

2010, 4

470,302

273,955

58.3%

2011, 1

363,854

220,471

60.6%

2011, 2

446,439

229,635

51.4%

2011, 3

455,134

249,873

54.9%

2011, 4

513,352

281,277

54.8%

2012, 1

406,895

224,396

55.1%

2012, 2

429,773

230,169

53.6%

2012, 3

454,834

267,577

58.8%

2012, 4

496,482

296,856

59.8%

Source: U.S. Census and Department of Homeland Security

Although all hires in Arizona are supposed to be run through E-Verify, an average of just over 50 percent of hires actually were from 2008 to the end of 2012.  These numbers actually overstate E-Verify’s enforcement record because multiple E-Verify queries could be run on the same hire.  The numerator could be a lot smaller than is reported above.    

If a state like Arizona will not enforce E-Verify, what chance is there that the federal government will do it everywhere?  Thankfully, lax enforcement of E-Verify in Arizona is a good indicator that this harmful system will not get the chance to be as destructive as many of us fear if it is ever mandated nationally.      

Mexican Violence and Unauthorized Immigration

The murder rate in Mexico is a serious and troubling issue that I’m frequently asked about in relation to immigration. Although far lower than in other Central American countries, the Mexican murder rate is almost three times as high as it was in 2007 – and potentially much higher. But, do unauthorized Mexican immigrants come to the United States to avoid the violence in their home country?

I decided to plot the number of Mexican nationals apprehended by Customs and Border Protection (CBP) on the left axis, an admittedly imperfect measurement of the intensity of unauthorized immigration, and the murder rate in Mexico per 100,000 people on the right axis.

Sources: Sources: Customs and Border Protection U.S. Border Patrol Statistics and Trans-Border Institute.

Allow Renewals for Guest Worker Visas

Reforming low-skilled guest worker visas is a vitally important part of immigration reform. It will substantially reduce unauthorized immigration by providing a lawful pathway to enter and reenter the U.S. To that specific end, an effective guest worker visa has to be designed to address how migrant and guest workers actually behave. Allowing a guest worker visa to be renewed multiple times for each worker, assuming the worker follows the law when in the U.S., will decrease the incentives to migrate unlawfully. For each theory of migrant movement, allowing a guest worker visa to be renewed multiple times is compatible with migrant actions and will decrease unauthorized immigration. Here are the theories:

Target Income Theory

Under the target income theory, migrants come to the U.S. to meet a specific monetary or life goal, like starting a business or buying a house back home, that they would be unable to meet in their home country. Upon reaching the monetary threshold for that goal, they return home.  According to this theory, a recession in the U.S. would cause migrants to stay longer until they meet their targeted goal, while higher migrant wages or an economic boom would make them return sooner. 

If a migrant behaves according to this theory, he will work until the goal is met. Let’s say a guest worker visa allows a migrant to work in the U.S. for 10 years but no longer. If, at the end of that period, the migrant requires 2 more years of work to reach his income goal, the migrant will be tempted to overstay and work illegally until the goal is met. In this case, allowing the guest worker to legally stay longer and meet his goal will decrease the incentive to overstay on the visa. If the target income theory explains migrant behavior, allowing many visa renewals will help decrease unauthorized immigration. Renewable visas will allow immigrants to satisfy their income goal and return home.

Disappointment Theory

According to this theory, migrants return home if the economic conditions in the U.S. are less favorable than they imagined, or if the economic conditions in their home country improve. Migrants would prefer to return when conditions improve, at least temporarily, but many stay in the U.S. longer because it is difficult for them to reenter should they ever want to. The depth of migrant social networks in their home and destination countries greatly influence this effect.        

Guest worker visas that could be renewed multiple times will incentivize migrants to return home when conditions there improve because they will not fear being stuck there if they deteriorate. 

Circular Migration Theory

To distinguish circular migration from the disappointment theory above, migrants come to the U.S. for seasonal or yearly work but move back and forth as labor demand for their occupations changes. Beginning in 1986, this circular movement between Mexico and the U.S. was interrupted with expanded border security that increased the length of time that unauthorized migrants stayed here, which in turn increased the likelihood that they would settle permanently. Because migrants suddenly faced the possibility of being stuck in Mexico if they ever left, they decided to stay and work.    

If those migrants had a lawful way to cross the border, many would have returned to Mexico just as they did when the Bracero Program offered a visa to do just that. Renewable guest worker visas will allow some legal migrants to move back and forth for seasonal labor, lessening the incentive to illegally stay once here.

Conclusion

Migrants come for different reasons. Migrant actions might exhibit some or all of these theories, or enter the U.S. with one in mind and then switch to another during their stay. No matter which theory provides a better explanation of why migrants come, making the visa renewable as many times as possible will substantially decrease the incentive to migrate illegally or overstay a visa. 

Creating a guest worker visa that can be renewed multiple times will allow migrants to legally work in the U.S., leave while preserving the possibility of legal return, and thus reduce unlawful entry and visa overstays. A flexible and numerically large guest worker visa program will substantially reduce the supply of unauthorized immigrants by channeling them into the legal market. The more times that such a visa can be removed, the more effective it will be at decreasing unauthorized immigration.