Last week, President Trump announced that his immigration plan would not mandate that employers use E-Verify, the employment verification system that checks new employees against government databases. While the president felt it was too “tough” on illegal workers, he is wrong. Nearly all illegal workers passed the system last year. In reality, E-Verify is tough on legal workers who have had nearly 760,000 jobs held up by the system since 2006.
This is from David Bier, “E-Verify Errors Harmed 760,000 Legal Workers Since 2006,” Cato at Liberty, May 30, 2019.
Read his whole piece to see how the system messes up. It’s often employer error, but the employee has very little time to go to a government office and correct the error.
To put the 760,000 number in perspective, 760,000 legal workers being harmed over 12 years is not a large number. It averages to about 64,000 a year. And to put that 64,000 in perspective, in 2018 of the 100 million new hires in the U.S. economy, 37.6 million were covered by E-Verify.
David Bier concludes by considering what would happen if E-Verify were mandated:
In 2018, only about 37.6 million of the more than 100 million new hires went through the E-Verify system. If every employer used E-Verify, the number of legal workers receiving errors would explode to a projected 200,000 annually or 2 million over a decade based on E-Verify’s current error rate. This would include more than 32,000 legal workers who would receive FNCs and lose out on their jobs completely each and every year.
Even on its own measure of success—ending illegal employment—E-Verify fails miserably. In 2018, E-Verify confirmed 86 percent of illegal hires. While proponents see the 14 percent who don’t get confirmed as worth it, they ignore entirely the cost: the tens of thousands of legal workers who suffer. Americans should not need to “prove their innocence” to get a job. The government has the responsibility to prove guilt. E-Verify cuts against this fundamental principle, and it undermines the rights of every American. Trump was right to reject the system, even if he did so for the wrong reasons.
I think David understates the number of legal workers who will suffer. Why? Because of selection bias. First, I would bet that the employers who voluntarily comply with E-Verify currently tend to be larger employers, and larger employers who are voluntarily complying are probably more careful than small employers who don’t want to be part of the system. Second, and related to the first, I would bet that, size of employer held constant, those who voluntarily comply do a better job than those who don’t want to be part of the system.
One other point that my Hoover colleague John Cochrane stresses and that I have also stated my concerns about is that once E-Verify becomes mandatory, its use will spread beyond the issue of whether the potential employee is legally in this country.
READER COMMENTS
john hare
Jun 2 2019 at 8:14pm
We hired a block mason a few years back and were going to build a crew around him. Several days in, our office called me to get him off the job as his SS wasn’t valid. A few months later, he opened up a business under his wife’s name. Now he has about 10 employees last I saw. My company still doesn’t have an in house block crew. I have to wonder how much other business disruption is out there.
Alan Goldhammer
Jun 2 2019 at 8:25pm
LOL big time. We have a problem in Maryland right now with a lot of drivers licenses not be compliant with the Real ID standards (and yes, both my wife and I are non-compliant right now). There is a nice story in the Washington Post on this topic. Now we have to collect two pieces of identification, make a trip to the MVA, and get a new drivers license even thought ours don’t expire for a couple more years.
Pierre Lemieux
Jun 2 2019 at 9:24pm
I would add an even more systemic problem to your last paragraph, David. Making E-Verify compulsory would extend and strengthen the Your-Papers-Please system whereby one cannot live without government papers and authorizations.
Tom DeMeo
Jun 3 2019 at 1:53pm
In the year 2019, does living without government papers and authorizations provide any realistic measure of privacy or protection from tyranny?
The argument here is that government is too incompetent, and we are insisting that it stay that way.
Hazel Meade
Jun 4 2019 at 2:55pm
That is my concern as well. It would further entrench a system in which you are presumed not to have the right to work unless that government say you do. And that’s a pretty big step towards centralized control of the economy. If the government can control who is allowed to work, then they can make people official pariahs by denying that right. That gives government control of the labor market.
Ken P
Jun 3 2019 at 1:59pm
These numbers don’t look right. Are there really 100 million new hires per yr in a country with 128 million total employees? I realize a single person could get multiple new jobs per year but the number still looks large to me.
David Henderson
Jun 3 2019 at 4:51pm
Good question. I’ll look into it.
Steven Kopits
Jun 4 2019 at 2:16pm
The JOLTS survey indicates 46 million hires in 2018. The pace is largely steady–2019 should be about the same, assuming the economy holds up.
https://data.bls.gov/cgi-bin/surveymost
Scott Gustafson
Jun 4 2019 at 4:00pm
The JOLTS report indicates about 65 million new hires in 2018.
David Henderson
Jun 4 2019 at 4:01pm
Oops. Just saw this. Thanks, Scott.
David Henderson
Jun 4 2019 at 4:00pm
Here is what I was able to find. According to the Bureau of Labor Statistics, the number of new hires in March was 5.7 million. On an annual basis, that’s 68 million, which is well below 100 million. Also, remember that these are unusual months, in the grand scheme of things, with such a tight labor market that people are quitting and going to new jobs much more frequently. So a good estimate for a “normal” year would probably be about 50 million new hires.
Together, these do put the 100 million number in doubt.
Ken P
Jun 4 2019 at 11:36pm
Thanks David and Scott!
Billy Kaubashine
Jun 3 2019 at 2:25pm
E-Verify exhibits the same flaws as firearm purchase background checks. They both make life difficult for the users and too often fail to achieve their intended purpose. They create worry about misuse of data that is collected in the process.
If we can be required to undergo background checks before we exercise our 2nd Amendment rights, surely we can require E-verify background checks. Perhaps we need a bi-partisan commission to design such programs, composed of members with the zeal for effectiveness that the firearm background check supporters display and the compassion for participants and respect for privacy felt by both E-verify critics and the NRA.
Thaomas
Jun 3 2019 at 5:59pm
But there are no benefits, indeed lost benefits, from preventing undocumented immigrants from working to offset the costs of E-Verify.
Jamie_NYC
Jun 4 2019 at 4:53pm
There are no benefits, indeed lost benefits from preventing sale of narcotics to minors. The benefits come from minors not using the narcotics, if the sale is prevented. Likewise, eVerify is intended to reduce the incentive for illigal immigration, with attndant increase in crime and depletion of social benefits funds.
Matthias Görgens
Jun 4 2019 at 7:00am
Nonpartisan would be better than bipartisan.
Niko Davor
Jun 4 2019 at 12:44pm
E-Verify for me but not for thee. NPS and GMU are government universities that use E-Verify systems to prevent US citizens who are not officially recognized as valid, legal students from registering in classes and participating.
Jaime L. Manzano
Jun 4 2019 at 1:02pm
Other nations have a required ID that seems to work. Learn from their experience. If an ID, for example, were required to open a bank account, get a credit card, obtain a drivers license, enter a building, ride a plane, voting, etc., the multiple use requirement would impose greater compliance. E verify is largely based on the Social Security system. That system actually encourages misuse. False IDs are common. IDs can be loaned for a profit. Non use of IDs by employers iencourages them to operate off the books, enhancing profit from non=payment of Soc. Security contributions. A more generalized ID requirement would make an ID difficult or impossible to be out of compliance.
Instituting a national ID system may essential to assure compliance with a lot of socially desired activity.
David Barulich
Jun 4 2019 at 1:46pm
There is a way to make E-Verify voluntary, but effective. Require that only the wages of employees and independent contractors that are confirmed as legally eligible to work could be deducted as expenses on the employer’s tax return.
This dissuades employer from higher illegal immigrants at lower wages because they don’t get to lower their taxable income. This levels the playing field with legal workers competing with illegals.
This article explains in greater detail.
http://thefederalist.com/2017/09/14/president-trump-doesnt-need-border-wall-can-build-better-paper-ones/#disqus_thread
If someone doesn’t want to use the system, then fine! They just don’t qualify for the tax break. No need to throw the worker into jail. If the employer sincerely believes that the worker is legal, then he could hire him on, and get a tax rebate later for the period of time that the workers wages weren’t deducted.
There isn’t a better way to learn about errors in the Social Security database due to identity theft or mistaken entries by employers than to have a E-Verify type of authentication program. I’m all for extending the deadline from 8-days to something more reasonable.
This proposal would be far more effective than building a wall at the border because it would encourage employers to fire millions of illegal workers who have already crossed the border, and prompt a massive self-deportation.
David Seltzer
Jun 4 2019 at 4:58pm
All good comments regarding processing delays. BUT…E-Verify forces employers to become ICE deputies. The real issue at bottom. Force leaves employers with no choice, diminished freedom and hinders prospective employees.
apso
Jun 4 2019 at 6:53pm
It would be better to let ICE do its job at the point of entry, but a major political party demagogues this issue.
David Barulich
Jun 4 2019 at 5:14pm
Mr. Seltzer,
As described in my prior comment, using E-Verify as a condition for an employer to deduct labor costs only for legal employees doesn’t make an employer an ICE agent. There is no need to resort to use of police powers when all that you have to do is use to tax code to provide the right incentives.
Employers will pursue the profit motive and decide whether or not it is worth hiring illegal workers based on after-tax earnings. E-Verify could be used to prevent employers from receiving a tax break while aiding and abetting those who are breaking the immigration laws.
What is wrong with that?
David Seltzer
Jun 5 2019 at 10:46am
E-Verify is not voluntary. What’s next. Hospitals required to report illegal aliens who show up in ER’s or schools required to report children being fed at lunch.
David Barulich
Jun 5 2019 at 1:37pm
E-Verify is currently a voluntary program. Under the program described in this link
E-Verify could simply be used to discriminate against employers who hire illegal immigrants by denying them the ability to deduct illegal labor expenses to lower their taxable income. This is not a “permission to work program.” This is a permission to lower your taxes program. Big difference.
F. E. Guerra-Pujol
Jun 4 2019 at 7:33pm
I would love to see a Bayesian analysis of the false positives versus false negatives generated by eVerify
F. E. Guerra-Pujol
Jun 5 2019 at 12:09pm
If there are 37.6 million new hires covered by E-Verify, and if “only” 64,000 of those hires are incorrectle flagged as “illegal”, then the error rate (rounded up) is 0.002.
Although the error rate for illegal workers is much higher (0.86), I would like to know what the raw numbers of illegal hires are, so I could use the same simplified Bayesian method used here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2271870
Hazel Meade
Jun 7 2019 at 12:57pm
There’s a principle in our society of ‘innocent until proven guilty’. We bias the system very far in the direction of “false negatives” in the matter of criminal justice, because the costs to individual liberty of getting a “false positive” are very high imprisonment and even execution. In the case of employment, denying someone the right to be employed has a similarly high cost to the individual involved, thus we should justly bias the system very far in the direction of having very few “false negatives”, even at the cost of increasing the rate of “false positives”.
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