November 3, 2016 11:19AM

Serious Problems with E‐​Verify

A recent piece by Mark Krikorian, executive director of the Center for Immigration Studies (CIS), argued for mandatory E-Verify as “an important enforcement tool” and metaphorical “wall” that would prevent the hiring of illegal immigrants.  Krikorian did not mention many of the problems with E-Verify so I will do that here after a brief description of the system.

The 1986 Immigration Reform and Control Act (IRCA) created the rudimentary employment verification known as the I-9 form that every new employee must fill out.  An E-Verify mandate would add another lay on top of the I-9 whereby employers, after collecting I-9 those forms, would enter the information on the form into a government website.  The system compares these data with information held in the Social Security Administration (SSA) and Department of Homeland Security (DHS) databases.  The employee is work authorized if the databases decide that the data are valid.  A flag raised by either database returns a “tentative non-confirmation,” requiring the employee and employer to sort out whatever error has been flagged.  If the employee and employer cannot sort out the errors then the employer must terminate the new employee through a “final non-confirmation.” 

First, Krikorian erroneously labels E-Verify as a “free online system.”  E-Verify is not a gift from heaven, it was created by the federal government and funded by taxpayers.  E-Verify is also not free because of the opportunity cost of the using the system.  The current I-9 form costs employers an estimated 13.48 million man-hours each year.  A national E-Verify mandate would add to that – perhaps substantially.  Those are a lot of hours that employers could otherwise spend on growing their businesses but instead must waste complying with government rules. 

Most E-Verify checks do not take much time but 46.5 percent of contested cases in 2012 took DHS eight work days or more to resolve.  During that time, employers are justifiably reluctant to train new employees who might not be work authorized.  Employers will likely avoid that cost by pre-screening job applicants and rejecting those who come back as tentative non-confirmations.  Workers could thus get rejected from every job they apply for but not know a simple and correctable error in the E-Verify database is the reason.  Although pre-screening employees would be illegal under a national E-Verify mandate, we shouldn’t expect it to work because the entire point of the system is to stop illegal behavior by employers in the first place.

Second, E-Verify is ineffective at detecting illegal immigrant workers. On top of that, E-Verify’s accuracy rates are notoriously difficult to judge.  An audit of the system by the firm Westat found that an estimated 54 percent of unauthorized workers were incorrectly found to be work authorized by E-Verify because of rampant document fraud.  E-Verify relies upon the documents presented by the workers themselves to their employer.  Frequently, identity information comes from deceased Americans – a loophole the government seems incapable of closing.  For instance, SSNs for roughly 6.5 million Americans who are 112 years old or older do not have a death date attached which means they can easily be used by illegal workers and nobody would complain.  An illegal worker using the SSN of a deceased American would likely end up work authorized.

Another gap in E-Verify’s wall is far more difficult to fill.  Many employers ignore E-Verify even when it’s mandated, just like they ignore other government immigration enforcement rules. Alabama, Arizona, Mississippi, and South Carolina all mandate usage at the state level, yet usage and enforcement have been lax.  In 2014, only 56 percent of employers in Alabama, 57 percent in Arizona, 43 percent in Mississippi, and 54 percent in South Carolina used E-Verify for new hires despite their state laws mandating that 100 percent of employers must use the system.  Since E-Verify isn’t enforced in states like Arizona currently, we can reasonably assume that there is no hope that it will be well-enforced nationwide.  E-Verify, like every enforcement system, must actually be enforced by people and these states show about as little interest in doing so as the federal government does in enforcing I-9 requirements.  Any of the proposed national E-Verify mandates will not change that dynamic.    

Third, some Americans would be kicked out of the labor market due to E-Verify.  E-Verify’s accuracy problems mean that Americans are and will continue to be barred from work due to false positives.  Roughly 0.15 percent of all E-Verify queries result in a false “final non-confirmation.”  While that is an admittedly small percentage, if applied nationwide to an American labor pool of roughly 125 million workers, it would result in 187,500 wrongly issued FNCs to American workers each year. 

Fourth, E-Verify is supposed to help curb illegal immigration by turning off the jobs magnet.  In the real world, E-Verify barely affects the wages of suspected illegal immigrants.  In Arizona, the E-Verify mandate lowered the expected wage gain of immigration from Mexico from 253 percent to 241 percent – hardly diminishing the strength of the wage magnet.  That small effect could even overstate E-Verify’s effectiveness because it includes a period of time when employers and employees were learning how to get around the system. A national mandate in the near future would confront many millions of employers and illegal immigrants who now know how to get around the system thanks to Arizona and other states.

Fifth, CIS’ chosen legislative vehicle for mandatory E-Verify is the so-called Legal Workforce Act.  Versions of this bill have been proposed in every new Congress for years and each version has failed to make it to the floor for a vote.  A new version of the bill is likely to be proposed next Congress and it is likely to be as expensive and problematic as previous versions. At the federal level, expanding E-Verify through the Legal Workforce Act would, per the CBO, cost the federal government $635 million from 2018 to 2023 while imposing $10 million in annual compliance costs on states and localities. The CBO also estimates a minimum $200 million cost to the private sector following passage, as employers are forced to verify an additional 50 million employees.  That’s a high price tag for a supposedly “free” program.

Sixth, government identity requirements for employment incentivize identity theft.  A huge cottage industry of forged identity documents sprung up after the government first mandated that employers check the identification of new hires in 1986.  Just as IRCA gave a big boost to the black market 30 years ago, nationally mandated E-Verify would subsidize it even further.          

Seventh, E-Verify’s errors and loopholes mean that the system will be quickly rendered useless if it is ever mandated universally – which is the most positive thing I’ll say about E-Verify until it is significantly reformed.  The government will not react to E-Verify’s failure by throwing up their hands and calling it a day.  The government would then integrate other biometric information like fingerprints or perhaps even DNA into a national identity system to close the E-Verify loopholes in an attempt to make the system more effective.  Such a beefed up E-Verify system could easily be used for other purposes that its proponents would be horrified by – like creating a national gun registry.  It is unwise to mandate participation in a new government identity tool that will expand in the future, especially in an era of serious privacy scandals.       

Interestingly, the government is already starting to link E-Verify to DMV photos in some states to reduce fraud.  Mississippi is one of those states but, as I noted above, it has the worst rate of employers actually checking new employees through E-Verify.  A fancy new biometric identity system combined with E-Verify does not exclude illegal immigrants from the workforce if nobody uses it.

This post will end with a few value judgments.  The government should enforce its own laws rather than conscripting employers in its attempt to regulate the labor market.  If the government cannot enforce its own laws then that is a signal that its laws should change.  Also, Americans should not have to ask government permission to work.  Krikorian will respond that Americans already have to ask through the I-9 form.  In reality, current workers fill out a government form that nobody ever sees again before getting a job.  That is very different from having a government computer reject or accept a worker for employment.

There are many proposed fixes to the problems above but they will likely be just as disappointing as the lockdowns on SSNs.  Many Americans are opposed to mandatory E-Verify not out of some Democratic Party-inspired desire for open borders but rather because they are justifiably skeptical of an error prone, easily fooled, and deceptively expensive federal mandate that has great potential to diminish the privacy of Americans and lead to a national biometric identity program.  Krikorian and other E-Verify supporters should address the real arguments against E-Verify rather clumsy strawmen.      

Special thanks to Scott Platton for this help in writing this.