Topic: Trade and Immigration

Shiny, Happy SSA Employees

I recently had the opportunity to conduct a pair of briefings for congressional staff regarding electronic employment eligibility verification. A pair of bills are vying for the attention of Congress these days. I suggested in my recent paper, “Electronic Employment Eligibility Verification: Franz Kafka’s Solution to Illegal Immigration,” that Congress should ignore both. Indeed, it should eliminate “internal enforcement” of immigration law entirely.

One of my co-briefers provided staffers with some interesting information pertaining to the idea of building a regulatory contraption for automatic nationwide verification of workers’ identity and immigration status. He was a representative of SSA workers from the American Federation of Government Employees, National Council of SSA Field Operations Locals.

The programs slated to go national under these proposals would compare data about new workers (and in some cases, existing workers) with databases at the Social Security Administration and the Department of Homeland Security. When the data didn’t match, workers would receive what is called a “tentative nonconformation.” With the 4.1% error rate in SSA files (as found by its Inspector General), that’s a lot of tentative nonconfirmations going even to law-abiding American citizens. A higher percentage of the time, naturalized citizens would get them, too, as government data about them is even more error-prone. Bad government data is just one source of error.

Anyway, when a tentative nonconfirmation is issued, employers are supposed to communicate this to the employee (not all do) and the worker is supposed to report to a Social Security Administration office or the Department of Homeland Security to clear the problem up. This is where the interesting new information comes in.

What would the process be like? Well, try calling your local SSA field office to find out. The SSA worker rep reported that 50% of those calls aren’t answered because field offices are too busy. Calls to the SSA’s national 800-number don’t go through 25% of the time.

It’s not just a phone problem. The agency currently has a backlog of 752,000 on disability rulings. That’s three quarters of a million people who aren’t getting an answer from SSA. It takes 530 days – a little under a year and a half – to get a disability ruling out of SSA.

In my paper, I wrote about the experience American workers would get at the Social Security offices when they went to clear up their tentative nonconfirmations:

Disputes of tentative nonconfirmations would not happen in lushly carpeted offices with marble columns, hot coffee, and friendly, attentive staff. The experience of American workers when they sought permission to work would be much more like their trips to the nation’s departments of motor vehicles, post offices, and dentists—long lines, unfriendly service, and painful procedures.

The SSA union rep assures me that SSA workers are friendly. Any perception of unfriendliness is due to overwork. Fair enough; I may have been slapdash in my writing about SSA employees. But a national electronic employment eligibility verification system would result in 3.6 million new visits to these folks, overworking them and eroding their courtesy even more. These visits, and administering tentative nonconfirmations at SSA, would cost $1 billion, according to the union rep.

Of course, an SSA employee union rep would happily take the money and add workforce to do whatever Congress wants. My preference is to save the money. Enforcement of our abnormally restrictive immigration law causes us to spend taxpayer money on undermining the productive economy. That shouldn’t make sense to anyone.

Don’t Shoot the Messenger

I’m sorry to bring bad tidings so close to the weekend, but apparently House and Senate conferees have reached agreement [$] on the broad outlines of a Farm Bill.

We will have to wait until Monday to get the full, disgusting details but broadly, we know this about the proposed bill:

  • it will raise the target prices and loan rates for northern crops (i.e., wheat, soybeans, other feedgrains) beginning in 2010
  • raise the sugar loan rate three-quarters of a cent
  • include a sugar-to-ethanol program (whereby the USDA would buy sugar that would otherwise threaten the domestic minimum price and sell it, presumably at a loss, to ethanol plants)
  • an additional $4 billion for conservation programs
  • $10.361 billion extra for domestic and international food aid programs
  • The bill also includes the new “permanent” disaster program (some thoughts on that here), albeit at $250 million less than the original $4 billion request

To pay for this, your representatives in Congress cut the $5.2 billion per year direct payments program (that is the program that pays farmers on the basis of past production and yields, regardless of what they produce now) by 2 percent per year for four years. Recall that the direct payments program, while an offence to taxpayers everywhere, is at least less trade distorting than the price-linked subsidies that the conferees have agreed to increase. And in the final year, when it really counts for purposes of planning future spending levels (i.e., the baseline), the direct payments will go back up again.

The one possible bright light at the end of this sewer-pipe: a presidential veto. No word from the administration on this latest deal, but it does not fit their past definition of an acceptable amount of reform and thus, assuming intestinal fortitude on the part of President Bush (I know, I know), would likely elicit a veto threat.

Happy weekend, everybody.

Howley on E-Verify

Kerry Howley has a great article on the supposedly common-sense proposal to create a massive federal database of eligible workers as a disincentive to illegal immigration:

While undocumented workers probably contribute more in federal taxes than they consume in federal services, no one doubts that they pose some fiscal burden to border communities where they arrive. Still, you’d have to take an improbably extreme view of these costs to deem the SAVE Act fiscally rational. According to the Congressional Budget Office (pdf), the act would decrease federal revenues by $17.3 billion between 2009 and 2018 as formerly tax-paying workers go underground. The costs of expanding E-verify and a bunch of other goodies stuffed into SAVE (thousands more border agents, a program to recruit former members of the armed forces to join the border patrol, more SUVs and unmanned aerial vehicles, hundreds of full time immigration investigators, expanded immigration detention centers) come to $23.4 billion in discretionary spending during the same period. And that doesn’t touch the cost to individual employers, who are being slapped with a huge regulatory burden in the midst of impending recession.

No presidential candidate has come out in favor of Schuler’s bill, most likely because the bill includes no avenue for undocumented workers who wish to become legal. Herein lies the ambitious stupidity of SAVE: If the bill works as intended, it will instantly turn the population of 12 million undocumented workers with no way of becoming legal into 12 million unemployed undocumented workers with no way of becoming legal. For a political constituency constantly worried about “anarchy,” this does not appear to be an ideal situation.

The SAVE Act may or may not come to a vote this session, but employment verification will almost certainly be a part of future compromise legislation on immigration reform. That’s worrying. Walls offend us aesthetically and symbolically; they’re clumsy and primitive and cruel. But they’re also easy to tear down; far easier than a slowly metastasizing system of total employment surveillance, of growing databases and expanding bureaucracies.

Our own Jim Harper has justifiably called the e-verify program Franz Kafka’s solution to illegal immigration. According to the Social Security Administration’s own estimates, almost 18 million Social Security records contain errors, many of them pertaining to US citizens. If even a small fraction of those problems find their way into the e-verify program, we’d be looking at millions of American citizens suddenly forced to “prove” to federal bureaucrats that they’re “eligible” to have a job. Giving the federal government the power to decide which US citizens are allowed to work for a living seems to me like a much bigger threat to our freedoms than anything illegal immigrants have done.

Message to Hillary: Americans Still Make Lots of Things

This presidential campaign has featured more than its share of misleading statements about trade and manufacturing. Nowhere has that been more on display than when the two Democratic candidates have been hustling for votes in what used to be the nation’s industrial heartland of Ohio and Pennsylvania.

On the eve of today’s crucial Pennsylvania primary, here is how the Boston Globe described a scene at a Hillary Clinton event in the western side of the state:

“We need to still be a manufacturing nation,” she said at a rally in downtown Pittsburgh yesterday, as a woman in the crowd shouted “Right on!” “I don’t think a country that doesn’t make things can remain strong and vibrant and leading in the global economy.”

Right on? Not exactly. Implied in Clinton’s remark is that manufacturing has been in decline and that we are in danger of becoming a nation “that doesn’t make things.”

One huge problem with her statement is that manufacturing output in the United States has continued to EXPAND in recent decades. According to the Federal Reserve Board, America’s factories produced 30 percent more in real output in 2007 than a decade earlier and three times more than in the 1960s.

And just what sort of things do Americans make? According to the U.S. Commerce Department, in 2006 U.S. factories produced:

• 4,522 complete civil aircraft and 12,299 complete civil aircraft engines.
• 87 million metric tons of raw steel and 113 million tons of shipped steel products.
• 11,260,300 cars and light trucks.
• 26,925,715 million computers (digital, analog, hybrid, and other).
• 11,966,177 household refrigerators and refrigerator-freezers.
• 9,993,990 washing machines.
• 7,654,882 water heaters (electric and non-electric).
• 7,402,333 dishwashing machines.
• 6,004,765 household gas and electric ranges.
• 1,399,938 clothes dryers.
• 1.93 billion square yards of carpet and rugs.
• 11.4 million short tons of chlorine gas, 8.9 million tons of sodium hydroxide, 4.7 million tons of hydrochloric acid, and another 2.6 million tons of commercial aluminum sulfate, sodium sulfate, finished sodium bicarbonate, and sodium chlorate.
• 1,537.7 million gallons of paints and allied products at $13.60 a gallon.
• $127 billion worth of pharmaceutical preparations (except biologicals).

The real beef of the Democratic candidates and their union allies is that all that stuff was made with fewer unionized workers than in years past. We can make more and better things with fewer workers because of soaring productivity.

Please remind me what’s so bad about that.

Cracking Down - on Legal Permanent Residents

Prepare for more of this if electronic employment eligibility verification goes national. Reports Dianne Solís of the Dallas Morning News:

Federal immigration agents executing arrest warrants for workers at the Pilgrim’s Pride poultry plant in Mount Pleasant arrested the wrong Jesus García at his home near the plant – despite his repeated assurances that he was a legal permanent resident.

Immigration and Customs Enforcement agents targeted workers at Pilgrim’s plants in Texas and four other states, and by Thursday, had arrested 311 workers on identity fraud charges or immigration violations.

“We think it is a case of mistaken identity,” said Fernando Dubove, Mr. García’s attorney. “It is the wrong Jesus García. It is really tough when you have a common name.”

This is probably just coincidence, but were an electronic employment eligibility verification system in place, illegal immigrants would affirmatively pursue this as a strategy, deepening the simple identity frauds they commit now to get ‘legal’ employment. They would acquire proof of identification as good or better than the true holder of a given identity.

In my recent paper, “Electronic Employment Eligibility Verification: Franz Kafka’s Solution to Illegal Immigration,” I discussed what would happen when mistaken identity/identity fraud situations arose in the EEV systems now being debated on Capitol Hill:

[L]aw-abiding citizens would regularly stand accused of identity fraud. The SSA and DHS would not know which user of a name-SSN pair was the genuine person and which was using a false identity. EEV would tentatively nonconfirm all users of that name-SSN pair. The “true” individuals attached to fraudulently used identities would learn of identity fraud in their names when they were refused work by EEV and plunged into a bureaucratic morass.

Luckily, these victims of the system would just be denied employment and not arrested - if that’s your idea of luck …

Obama’s (Mostly) Irreconcilable Positions

I was pleased a couple of months ago to point out where presidential candidate Senator Barack Obama (D-IL) had distinguished himself and gotten it right on whether driver licensing should be linked to immigration status. The use of driver licensing for immigration enforcement is a major impetus behind the national ID system that our country should rightly avoid.

Such pleasures don’t last. The senator published an opinion piece in the Charlotte Observer this week calling for a “mandatory electronic system that enables employers to verify the legal status of their employees within days of hiring them.”

It is very hard to hold both positions. As I pointed out in my recent paper on electronic employment verification, it is nearly impossible to “strengthen” internal enforcement of immigration law through EEV without creating a national identification system:

[T]he things necessary to make a system like this really impervious to forgery and fraud would convert it from an identity system into a cradle-to-grave biometric tracking system. Almost no way exists to do national EEV that is not a step down that road.

Perhaps Senator Obama would implement an EEV system with a federally issued national ID card rather than the driver licensing system. (That’s not a good option either.) Perhaps he’s devised a credentialing system that allows people to prove eligibility to work under current immigration law without a national ID. (Such things are possible.) Most likely, the senator has expressed two pretty much irreconcilable positions.

Violence against Unions or Just Violence in General?

Yesterday in the Washington Post, AFL-CIO’s president John Sweeney rhetorically asked “How many murders are ‘acceptable’?” regarding the union killings that have been used as argument by Congressional Democrats to delay indefinitely a vote on the FTA with Colombia. “I can’t answer… with a number other than zero,” stated Sweeney.

That’s good posturing. Sweeney presents these killings—which have dropped by nearly 90 percent since President Alvaro Uribe took office—as a clear sign of violence against union activity in Colombia. However, the evidence shows otherwise.

In an op-ed last Friday in the Boston Globe, Edward Schumacher-Matos, a visiting professor for Latin American studies at Harvard University, writes that:

The number of convictions now being won in the union’s own cases reveals that perhaps one-fifth, and almost certainly less than half, of the killings had to do with unionism.

Of convictions won in 87 cases since the first one in 2001, almost all for murder, the ruling judges found that union activity was the motive in only 17, according to the attorney general’s office. The judges found 15 of the cases had to do with common crime, 10 with passion, and 13 with being guerrilla members [emphasis added. No motive was established in 16 of the cases.

The unions don’t dispute the judicial findings, and deep in their reports say that they, in fact, have no idea of suspect or motive in 79 percent of their cases going back to 1986. The killings, in other words, are isolated and not part of a campaign against unionizing.

As we can see, far from being a targeted campaign against union activity, the killings of union members in Colombia are mostly part of that country’s sad history of regular violence, which also affects teachers, politicians, journalists, etc.

It’s time to get the facts straight in this debate.