Weekly Update on Immigration: As the Economy Dives, DHS Targets the "Engine of Our Economy"

I. Immigrants continue to head south, Prop. 202 in Arizona remains under scrutiny, and here's an interesting op-ed by Jorge Castañeda linking trade, the economy, and immigration.

II. Fear and loathing continues at McCain rallies.

III. What Constitution? Charlie Savage and the New York Times report (surprise, surprise) the Bush administration has informed Congress that it is bypassing a law intended to forbid political interference with reports to lawmakers by the Department of Homeland Security. The August 2007 law requires that the reports on activities that affect privacy be submitted directly to Congress "without any prior comment or amendment" by superiors at the department or the White House.

IV. DHS Can't Sit Still: Not happy with the results of their brilliant "Deport Yourself" initiative or the outrage caused by USCIS detainee conditions and the mistaken detention of U.S. citizens during ICE raids, on October 23, the Department of Homeland Security (DHS) issued a final administrative rule that sets new procedures for employers who receive "no-match" letters from the Social Security Administration (SSA). Each year, SSA sends businesses ''no-match'' letters with the names of workers whose Social Security number on W-2 forms don't match SSA records. The DHS rule would require employers to correct the discrepancy or fire the worker within 90 days. Failure to comply could bring prosecution and heavy fines.

Setting aside the flawed policy behind this rule for a moment, could Secretary Chertoff have picked a worse time to issue this rule? Definitely not. This rule, made public 11 days before a Presidential election during which minorities and naturalized citizens have the power to swing numerous battleground states, and during which the incumbent Administration's candidate is far behind in the polls, could be interpreted by Hispanics (native and foreign-born) and immigrants of all races and ethnicities as another expression of the Republican party's anti-immigrant stance. Additionally, this "enforcement-only" approach places greater financial and legal burdens on employers, while simultaneously putting workers at risk of losing their jobs during a time of severe economic crisis - the federal government is spending hundreds of billions of dollars trying to rescue the nation's banking, credit and housing markets, yet Secretary Chertoff is pushing ahead with a potentially job-crippling program that, at the end of the day, is ineffective in curtailing undocumented immigration.

Luckily, a court injunction will remain in place against the rule until the Court issues its final decision. The next hearing in this litigation is set for November 21, 2008 to set a schedule to present arguments, so this case won't be resolved anytime soon. Accordingly, SSA will not send any no-match letters to employers until the matter is resolved. Therefore, notify the American Civil Liberties Union (ACLU), the AFL-CIO, or the National Immigration Law Center (NILC) if you know of any employer trying to implement this rule.

This final rule is basically unchanged from its original version, issued in August 2007, despite a court ruling in June of this year that: a) Questioned whether DHS had a reasoned analysis to change its position in regards to employer liability, b) Found DHS had exceeded its authority by interpreting anti-discrimination provisions in immigration law (IRCA), and c) Violated the Regulatory Flexibility Act (RFA) by not conducting the analysis of the rule's impact, as required by law (doh!, that pesky analysis thing).

This rule is misguided, too costly, and ineffective:
1. Originally
SSA no-match letters were an attempt by SSA to correct discrepancies in their records that can prevent workers from getting credit for their earnings. These letters were never intended to be used as an immigration enforcement tool--no-match letters are not evidence of an immigration violation. As stated in a judicial opinion, no-match "does not automatically mean that an employee is undocumented or lacks proper work authorization. In fact, the SSA tells employers that the information it provides them ‘does not make any statement about . . . immigration status.'"

2. The implementation of this rule is far from a solution - it will only increase unemployment at a time of severe economic crisis.
a. According to DHS, it would cost $36,624 a year for the largest small businesses to comply, not including the costs of termination and replacement of workers. It could have a staggering impact on businesses caught between the financial and legal liability they would face if they fail to comply, and the financial and legal liability they would face for wrongly firing a worker whose name was listed in error. If implemented, the rule also could have a chilling effect on millions of immigrant workers in construction, agriculture and service industries at a time when the U.S. economy can ill afford it. Many businesses, too, fearing government prosecution will decide to dismiss or not hire workers that they suspect may have an immigration problem.

b. An economic analysis by the U.S. Chamber of Commerce estimated that under the new rule, 165,000 lawful U.S. workers could lose their jobs, at a cost to employers of approximately $1 billion per year. In her testimony before the Immigration Subcommittee, U.S. Representative Gabrielle Giffords discussed the effects of mandatory use of E-verify at the state level in Arizona, and reported that between October 2006 and March 2007, 3,000 foreign-born U.S. citizens were initially flagged as not authorized to work.

c. Under a mandatory E-Verify program, USCIS has estimated that annual employer queries of newly hired employees would be an average of 63 million. A GAO study from June 2008 found that about 7% of the queries initially appear as a "no-match" to SSA, and about 1 percent cannot be immediately confirmed as work authorized by USCIS, and:

The majority of SSA erroneous tentative nonconfirmations occur because employees' citizenship or other information, such as name changes, is not up to date in the SSA database, generally because individuals do not request that SSA make these updates.

Taking the modest estimate of 63 million queries per year, at the 7% initial error rate found by GAO, that translates to 4.41 million potential no-matches, i.e. persons who could be pushed to unemployment, again, at a time when the national unemployment rate is above 6%. If we extrapolate 7% unconfirmed queries to the existing civilian workforce - over 154 million people - the number jumps to 10.7 million people in danger of losing their jobs.

3. Mandatory e-verify would require an increase in capacity at USCIS and SSA to accommodate the estimated 7.4 million employers in the U.S. The GAO study found that e-verify would cost a total of about $765 million for fiscal years 2009 through 2012 if only newly hired employees are queried through the program and about $838 million over the same 4-year period if both newly hired and current employees are queried.

A study performed by Dr. Richard Belzer, former official of Office of Management and Budget, concluded that this program would cause an estimated increase of 610,000-2.7 million visits per year to SSA. He also pointed out that DHS made no estimate of the authorized worker unemployment that would result from erroneous no-match letters.

4. The rule is ineffective because it ignores unintended consequences:
a. Instead of discouraging undocumented immigration, the rule will only increase identity theft by making it more valuable for unauthorized workers to have genuine social security numbers.
b. The rule will have to be followed by more rounds of rulemaking, for example, how to deal with duplicate instances of SSA numbers, in addition to "no-match."
c. The rule will shift unauthorized workers into independent contracting and the "underground" economy, which will only risk pushing wages down during a time of economic crisis.

5. E-Verify is vulnerable to acts of employer fraud and misuse. GAO found:

- The current E-Verify program cannot help employers detect forms of identity fraud, such as cases in which an individual presents genuine documents that are borrowed or stolen.
- As USCIS works to address fraud through data sharing with other agencies, privacy issues may pose a challenge. In its 2007 evaluation of E-Verify, Westat reported that some employers joining the Web Basic Pilot were not appropriately handling their employees' personal information...and anyone wanting access to the system could pose as an employer and obtain access by signing a MOU with the E-Verify program.
- Westat reported that some employers used E-Verify to screen job applicants before they were hired, an activity that is prohibited. Additionally, some employers took prohibited adverse actions against employees-such as restricting work assignments, reducing pay, or requiring employees to work longer hours or in poor conditions-while they were contesting tentative nonconfirmations.

We've tried the enforcement-only approach for decades, and it has not curtailed undocumented immigration. Rep. Zoe Lofgren said it best during our latest forum on Immigration, as DHS has focused its resources on raids, there's been a 38% decline in prosecution of organized crime at the border, so "we've ended up with an expensive, stupid system that has not solved" the issue of a broken immigration system.

A verification program without comprehensive reform is ineffective. NDN has long advocated for the importance of matching legal immigration visas with the economic need for immigrants as a way to curtail undocumented immigration. Only by moving immigrant workers through legal channels, providing immigrants already here with an earned path to citizenship, reducing the backlog in family visas, and developing a sensible system for future flow will immigration will become manageable, and enforcement at the border and at the workplace will become more effective.

Even the Chief of the Border Patrol, David Aguilar agrees, "We cannot protect against the entry of terrorists and the instruments of terror without also reducing the clutter....To most effectively secure our border, we must reform our immigration system to relieve this pressure. We need comprehensive immigration reform."