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Since 1986, honest employers who have obeyed immigration laws have placed themselves at a disadvantage to unscrupulous competitors who have hired illegal aliens at lower costs. Because of 20 years of nearly nonexistent federal workplace enforcement, many of the law-breaking companies have driven the law-abiding owners out of business or into lower profit margins.
Fortunately, the voluntary federal electronic verification system—now known as E-Verify—provides the employer with a “rebuttable presumption” of innocence if the system discovers an illegal alien has conned his or her way into a job. Unfortunately, owners have little incentive to use the system when they know their law-breaking competitors can hire as many cheap illegal aliens as they want.
The Bush Administration’s recent enforcement announcement is wonderful news for the majority of American business owners, who prefer to hire legally. Companies doing business with the federal government will be required to use E-Verify, assuring that every firm competing with them for federal contracts has to screen out cheap illegal workers, too.
Congress should pass a law requiring all businesses to use E-Verify. But in the meantime, President Bush will help level the playing field if he holds all companies (not just federal contractors) accountable when they receive “no-match” letters identifying workers whose submitted Social Security information contains discrepancies.
Because every worker will be subjected to this process and the checking will be done by the government instead of the business, employers won’t have to make themselves into document experts or carry the burden of most issues regarding discrimination in general. Fortunately, the system has so many layers of protections for clearing up discrepancies that legally authorized workers need not worry about being labeled unauthorized and then fired.
President Bush is finally offering honest business owners a way to achieve confidence that they have met the law’s requirement and that most of the employees of their competitors will once again be legal workers.
The business community understands and supports the enforcement of immigration laws. However, we are particularly concerned about the “Social Security No Match Letter” regulation. It dictates that if the discrepancy cannot be resolved, employers must fire a worker upon receipt of notice that his or her name and Social Security number do not match.
The potential termination of many hundreds of thousands of people in the workforce threatens to destabilize it and worsen current labor shortages in many industries.
The regulation would needlessly create uncertainties, disruptions, and dislocations throughout broad swaths of the workforce. Many industries that contribute enormously to the economy and rely heavily upon immigrant workers would lose revenue and tax dollars.
Moreover, the regulation would foster anti-Hispanic bias and discrimination against immigrants in general, and would rely upon a database—Social Security—that makes for an ineffective tool in work-site immigration enforcement.
Merely changing the administrative enforcement rules employers must follow doesn’t solve the problem inherent in our immigration system. We need a comprehensive approach to immigration that will allow much-needed overseas workers to enter and exit the country legally, and realistic laws that give the U.S. a mechanism to stabilize the existing workforce.
Enforcement standing alone, unaccompanied by realistic fixes to our dysfunctional system, will jeopardize our national and economic security. Overall, undocumented workers contributed about 1% of the total U.S. wage bill in 2004, or $64.9 billion.
The removal of undocumented workers from states with relatively large undocumented populations would result in noticeable effects in the short and medium term. Tax revenues derived both from undocumented workers’ incomes as well as their spending in these states would decline.
And certain sectors of the economy, including farming, cleaning, construction, and food preparation, would take an especially hard hit.Opinions and conclusions expressed in the BusinessWeek Debate Room do not necessarily reflect the views of BusinessWeek, BusinessWeek.com, or The McGraw-Hill Companies.
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