CEI In The Wall Street Journal: E-Verify Is A Threat To Liberty

CEI founder Fred Smith co-authored an op-ed in The Wall Street Journal today on E-Verify — the electronic employment verification system that will likely become mandatory as part of any immigration reform. Proponents argue E-Verify is the only way to eliminate illegal immigration, but as the piece points out, “the only proven way to address illegal immigration [is] an efficient and effective legal pathway for immigrants to enter and work in the U.S.”

E-Verify not only is unnecessary under a free-market immigration system — it is harmful. Here are six major problems with mandatory E-Verify.

  1. This is the most extensive regulation possible. E-Verify would place burdensome requirements not just on every American employer, but every American employee. The procedures, if violated, can lead to fines and prison sentences. According to a 2011 Bloomberg Government study, compliance will cost small businesses $2.6 billion in training, staff time and equipment every year. But this actually underestimates the problem. Under E-Verify, employers would have to train and pay unauthorized immigrants wages and benefits, even if the system rejects them, if they claim that it was a database error and appeal. This means they could work for months legally and get paid.
  2. Regulatory costs and threats of penalties lower wages for Americans. When Congress first criminalized employment of unauthorized immigrants in 1986, economists studied the effects on wages for workers. “As a result of the increased costs and risks,” noted University of Pennsylvania economist Douglas Massey in 2002, “some employers lowered the wages of their employees, thus compensating themselves for their added paper work costs and new perceived risks.” As noted above, the added costs from E-Verify will worsen the problem.
  3. It’s not free to government, either. As the op-ed notes, the Department of Homeland Security estimates E-Verify will cost $765 million over four years, and the Social Security Administration estimates $281 million over five years. But what the piece doesn’t mention is the GAO found DHS’s estimate to be “minimally credible” since it “did not perform an independent cost estimate on E-Verify” or “identify the risks associated with changes in the projected number of E-Verify cases or SSA’s E-Verify workload.”
  4. It has major errors that cannot be rectified. E-Verify has improved its accuracy in recent years, but even still, a 0.28-percent error rate, like the one currently found among the mainly voluntary participants (which excludes large numbers of at-risk groups), would cause almost a half-million errors each year that would send American workers to Social Security offices — the new DMVs of employment — to prove their right to work. This number actually underestimates the issue since E-Verify can be used to screen out applicants by businesses that do not want to pay to train unauthorized workers only to fire them, and the government has no way to stop them.
  5. We know E-Verify’s errors will create a discriminatory impact. First, the system’s errors are not random. They primarily affect young workers, those new to the workforce, married women who change their name, Hispanics with multiple surnames, legal immigrants and naturalized citizens. According to the government’s audit of the program, naturalized citizens, for example, are 30 times more likely to receive erroneous initial nonconfirmations. Second, because these errors cost employers time and money to resolve (not to mention the fear cited above that they actually are undocumented and they’d be force to pay them for months), employers can use the program to prescreen, see if they are immediately authorized, and then never hire the person if they receive an initial rejection. The GAO has found the government is “generally not in the position to determine whether employers” discriminate.
  6. E-Verify will encourage identity theft. It does so in two ways: First, it makes legal employment dependent on being a legal resident, which drives up demand for stolen identities. In fact, the federal audit of E-Verify found that 54 percent of unauthorized workers found employment, mainly from identity theft. Second, the E-Verify database can be accessed by any identity thief to see if a stolen Social Security number is valid and attaches to a given name.

This list could be much longer. For those interested in the privacy issues associated with E-Verify, see my last two posts on the threat of E-Verify as a national identification system.