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Romney and Cotton’s Minimum Wage Plan: Could It Lessen Illegal Immigration?

Mitt Romney. Image: Creative Commons.
Mitt Romney. Image: Creative Commons.

Senators Romney (R-UT) and Cotton (R-AR) announced that they intend to introduce a bill to raise the national minimum wage and mandate E-Verify for all new hires in the United States. Immigration restrictionists have tried to use minimum wages to reduce immigration for more than a century. Combining a high minimum wage with E-Verify is not as surprising as it first seems. Restrictionists assume that higher minimum wages will increase unemployment for lower-skilled workers, which it will, and that will mostly force lower-skilled immigrant workers out of the country entirely.

E-Verify is an electronic eligibility for employment verification system that checks identities of newly hired workers against government records to guarantee that they are legally employable. Since 1986, illegal immigrants have not been legally allowed to work in the United States. E-Verify is based off a Reagan-era employment verification form called the I-9. After collecting I-9 forms from employees, the employer enters the worker’s information into a government website. The system then compares these data with information held in Social Security Administration (SSA) and Department of Homeland Security (DHS) databases. SSA checks the validity of the Social Security number while DHS checks immigration status.

Employers are supposed to fire new employees if E-Verify flags them as being in the United States illegally. In this way, E-Verify is supposed to turn off the jobs magnet that attracts illegal immigrants in the first place. Proponents of the system, such as Sens. Romney and Cotton, believe that illegal immigration would decline and many would return home without that economic incentive to be here. There are many reasons why E-Verify won’t work as they intend.

First, E-Verify is a regulation intended to reallocate jobs from illegal immigrants to native-born Americans. Right off the bat, E-Verify promises to be an additional regulation that raises the cost of hiring without a promise to create new jobs. No one should ever confuse E-Verify with an attempt to increase employment opportunities. Since compliance with regulations costs money, the only outcome will be a reduction in production and employment. State-level evidence show that E-Verify mandates destroy jobs for illegal immigrants, they do not reallocate jobs to natives, they do not increase native wages, and they mostly do not reduce the population of illegal immigrants. Thus, the overall effect of an E-Verify mandate is a smaller economy. This is a bad policy at any time, but especially so in the aftermath of the COVID-19 recession.

Second, E-Verify doesn’t kick illegal immigrants out of the labor market. We know this from experience as many state governments like Arizona and Mississippi have mandated E-Verify. Arizona first did so in 2008 and advocates “promised [it] as the silver bullet to immigration problems. E-Verify was going to solve our challenges with immigration,” said former Arizona Republican state Senator Rich Crandall. Many illegal immigrants left Arizona after E-Verify was passed but the exodus stopped as soon as the system was implemented because workers and businesses figured out how to circumvent it. Since then, E-Verify forced illegal immigrants to leave states where it’s mandated.

Third, virtually all illegal workers in the United States know how to fool E-Verify. In August 2019, Immigration and Customs Enforcement agents raided several meat processing plants in Mississippi and detained 680 illegal immigrant workers. This wasn’t supposed to happen as E-Verify had been mandated in Mississippi for about 8 years at that point. Anti-immigration activists sold E-Verify as a silver bullet program but it turns out that it was shooting blanks.

As I wrote in a piece for Politico, this is how some illegal immigrant workers get around the program:

Undocumented immigrant workers get around E-Verify mandates in several ways. The first is by taking advantage of E-Verify’s biggest weakness: It checks the identification papers, not the worker. Thus, an undocumented immigrant worker can pass an E-Verify check if he hands somebody else’s identification to his employer. According to an audit for the federal government conducted by Westat, about 54 percent of undocumented immigrant workers are approved to work by E-Verify for this very reason.

The workers sometimes steal IDs, but many also borrow them from friends or family members. The story of a young undocumented immigrant named “Manuel” explains how so-called identity loans work. Manuel needed identification to work in the unionized construction industry in San Francisco. He contacted an uncle in Mexico who had obtained a Social Security number in the early 1970s but then returned to Mexico permanently. The uncle let Manuel use his SSN and forge a new green card with his uncle’s name. Since there is no victim of this kind of fraud, identity loans are extremely difficult to stop.

Thus, E-Verify mandates incentivize identity theft by making government identification documents more valuable. Proponents of E-Verify have not proposed any solution to E-Verify except, in their less careful moments, advocating for a national biometric identity card.

Fourth, virtually all businesses know how to fool E-Verify by not using it. In Mississippi, for instance, only about half of all new hires were run through the system even though 100 percent were supposed to be cleared. E-Verify use rates in the other mandated states aren’t much better. South Carolina, which also has an E-Verify mandate, has supposedly solved that problem by using state audits but they still have a low E-Verify compliance rate.

Fifth, some politicians endorse E-Verify because it doesn’t work and because doing so allows them to have it both ways: Supporting E-Verify makes them look tough on illegal immigration while businesses and economies aren’t much affected because it’s easy to evade. Thus, politicians who support E-Verify get the political benefits without their constituents paying the economic costs. Many politicians support E-Verify because they believe its hype, to be sure, but political conviction is greater when principle is cheap.

Sixth, E-Verify is not a free and easy program. Cheerleaders of E-Verify claim that it is a free and easy system to use. No government program is free as they are all funded by American taxpayers. Furthermore, complying with E-Verify costs employers and workers a lot of money. Filling out the I-9 form costs employers an estimated 13.5 million man-hours annually, while 46.5 percent of contested E-Verify cases took longer than eight working days to resolve. Businesses and workers would rather spend that time in more productive pursuits than filling out government paperwork. By reducing employment even more by raising the cost of hiring workers, E-Verify could stop firms from producing many billions of dollars worth of economic output annually. A hypothetical nationwide E-Verify mandate would sacrifice many millions more work hours on the altar of immigration enforcement.

I oppose E-Verify because it’s an expensive labor market regulation that will reduce economic output for no gain. The only way to permanently and substantially reduce illegal immigration is to increase lawful immigration so people don’t have to come here illegally. But E-Verify’s ineffectiveness makes the program a lot less scary. An immigration enforcement program that worked and seriously reduced the size of the U.S. illegal immigrant would greatly harm the U.S. economy. E-Verify is not that scary because it doesn’t work and it can’t work unless it’s tied to a biometric national identity program like many E-Verify proponents want. The real mystery is why immigration restrictionists still support it after its many failures. Immigration restrictionists need to go back to the drawing board if they want to have a hope of finding a way to enforce immigration laws.

Alex Nowrasteh is the director of immigration studies at the Cato Institute’s Center for Global Liberty and Prosperity.

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