Thread: Illegal workers manage to skirt Ariz. employer-sanctions law

Illegal workers manage to skirt Ariz. employer-sanctions law

Borrowed identities, cash pay fuel an underground economy
by Daniel González - Nov. 30, 2008 12:00 AM
The Arizona Republic

Undocumented workers and employers in Arizona are finding ways to circumvent the state's employer-sanctions law by turning to the underground, or cash, economy.

Blocked by the law from getting payroll jobs, many illegal immigrants instead are performing services or selling items on the side for cash.

Others have tried a different strategy: borrowing the identities of citizens or legal residents to land jobs with employers.
The maneuvers are allowing many undocumented families to remain in the United States despite heightened enforcement of immigration laws and a battered economy that has erased many jobs.

There are no studies that estimate how many illegal immigrants have turned to cash-only work to survive in Arizona. But economists say one of the results is that much of the money immigrants earn is going unreported and untaxed. That deprives the state of income-tax revenue even as tax revenue in Arizona is plummeting because of the faltering economy.

Gabino, a Phoenix resident who asked that his last name not be used for fear of being deported, is among the undocumented immigrants who have shifted from the traditional economy to the underground one. A year ago, the 37-year-old man from Guanajuato, Mexico, was assembling electronic parts at a plant in Phoenix, a job he got using fake papers. He not only drew a paycheck but also paid state and federal income taxes.

But in 2007, Gov. Janet Napolitano signed legislation that toughens penalties for employers who knowingly hire illegal immigrants. Gabino was fired late that year.

Instead of leaving Arizona, as was intended by proponents of the sanctions law for immigrants such as Gabino, he began working mostly for cash. He sells used items at swap meets and puppies that he breeds in his north Phoenix trailer home. More recently, Gabino assumed the identity of a U.S. citizen who lent him his valid Social Security number to get jobs.

Some economists say that stories like Gabino's bear out their predictions that the employer-sanctions law is having negative consequences for Arizona's economy.

"It's an effect of the sanctions (law) that is exacerbated by the bad economy," said Elliott Pollack, an Arizona economist who regularly advises the state Legislature. "What you've done, because of that law, is taken tax-paying people" and shifted them off the tax rolls.

Supporters of the sanctions law argue that if the law is forcing some illegal immigrants to move to the underground economy, that is a sign the law is working.

"It's unfortunate that they continue to disrespect our laws by working off the books in addition to living here illegally," said state Rep. John Kavanagh, R-Fountain Hills. "But this is one step closer to driving them out of the state. . . . It's making it more uncomfortable for them" to get jobs.


E-Verify at work

Gabino said he has lived in Arizona for 10 years. Until the sanctions law went into effect, he had no trouble getting legitimate jobs on the books using a fake Social Security card with an invented number. Employers never checked to see whether the number he gave them was actually valid.

But that all changed in January when the sanctions law began requiring Arizona employers to verify the work eligibility of new hires using the federal online database E-Verify. The system usually confirms within minutes whether someone is authorized to work. As of the end of September, more than 22,000 employers in Arizona were using the system, according to the federal government.

At the electronics plant, Gabino said he was earning $13 an hour. With overtime, his paycheck came out to about $650 a week. From that, Gabino said his employer withheld about $123 in state and federal income taxes.

Gabino said that in December managers at the plant started getting nervous as the employer-sanctions law was about to take effect.

The managers told him and other immigrants that they were going to review their work documents and if their Social Security numbers didn't check out, the workers would be let go. About a week later, Gabino said, he lost his job.

"It forced us to do a lot more stuff underhanded to survive," Gabino said.


A cash economy

The state's underground economy existed long before the sanctions law was approved, but its size is unknown.

Although illegal immigrants constitute a significant portion of the black-market workforce, it is difficult to gauge how many of them have shifted from company payrolls to the cash economy, economists say.

Anecdotal evidence based on interviews with undocumented workers and immigrant advocates suggests the number is growing, mainly because of the sanctions law and the poor economy.

"I think it's widespread. I think it's more widespread than we know about it," said Hector Yturralde, president of We Are America, a coalition of Arizona pro-immigrant groups. "They (immigrants) knock on doors and ask for gardening work or they are doing handyman work. A lot of these are workers who were employed in construction and they lost their jobs, so this is what they are doing."

The state's cash economy is virtually unregulated. The state's Department of Revenue employs four criminal investigators whose main targets are employers who try to reduce their taxes by fraudulently filling out tax forms. The investigators don't focus on employers who pay employees in cash under the table, said Sandy Schwartz, who oversees the criminal investigations section.

"We haven't had any criminal investigations (of employers paying cash), but we haven't been out there looking for that, either," she said.

Several economists agree that a shift to the underground economy is probably taking place and is worsening Arizona's economic problems by further deflating income-tax revenues. The effect is adding to the state's $1.2 billion budget shortfall.

The impact could be substantial considering the size of the state's undocumented workforce. About 200,000 of the state's 2.6 million workers are undocumented, according to estimates by Judith Gans, a researcher at the University of Arizona.

"It is safe to say it is likely a contributor, but I can't tell you if it is a major contributor or a minor contributor," said Marshall Vest, a UA economist.

Arizona took in about $371 million less in individual income-tax collections from January to September of this year compared with the same period last year, a drop of 13 percent, according to the state's Joint Legislative Budget Committee.

However, sales-tax collections for some necessities have not fallen as precipitously, dropping 2.5 percent for food and 6.8 percent for clothing. That suggests more workers aren't paying income taxes but are still earning money to spend, a sign that Arizona's underground economy is growing, said Barbara Robles, an economist at Arizona State University's Center for Community Development and Civil Rights. Robles said an underground economy isn't all bad because it means workers are still buying goods and paying sales taxes, which is better than removing them from the economy completely.

Some economists believe sanctions-law supporters fail to recognize that illegal immigrants fill labor shortages in the economy and many of them work on the books and pay income taxes, said Vest, who supports temporary work visas.

Although Kavanagh supports a guest-worker program to help meet labor demands in some areas, he said allowing illegal immigrants to legalize their status would be a mistake because they tend to earn low wages and would pay less in taxes than the benefits they use, including emergency health care and education. Legalizing them would provide them access to even more benefits, he said.


Finding a way to stay

In some ways, the underground economy found Gabino.

After he was fired from the electronics plant, he tried getting other jobs using the same fake documents he used in the past. But the documents no longer worked. At job after job, employers ran his Social Security number through E-Verify and sent him on his way.

To earn money, Gabino started buying children's toys and clothing at yard sales and reselling them on Sundays at swap meets. A baby swing in his living room was an example: He bought it for $20 at a garage sale and re-sold it for $40 at a swap meet.

Gabino also sells small Pomeranian and Chihuahua dogs. He bent down in his living room and pulled a Chihuahua puppy out of a cage. "This little guy is worth $380," he said.

Gabino said in a good month, he makes about $800 profit at the swap meet and figures he'll make about $3,000 this year from selling the puppies.

That's not enough to support his family. Gabino and his wife, who does not hold a job, have four children, two of whom were born in the U.S. The oldest is 13, and the youngest 3 months.

But Gabino has still managed to find companies willing to hire him despite the sanctions law.

A few weeks after losing his job at the electronic plant, Gabino said he applied for a job at a factory that needed someone to paint iron gates. The boss offered Gabino the job, even though an E-Verify check showed he wasn't authorized to work, Gabino said.

"Since I didn't have a 'Social' to be able to work, the boss told me he would pay me with a check that belonged to another worker who didn't work there anymore. He said, 'You are now Pedro. You will get Pedro's check.' And he paid me as if I was Pedro," Gabino said.

There was only one catch. The boss was only willing to pay Gabino $7 an hour, 10 cents above the state's minimum wage. Gabino said he was desperate so he took the job. Cashing "Pedro's" check wasn't a problem at a check-cashing place.

"All you have to do is let them take your picture and bring a friend who vouches that you are the same person on the check," Gabino said.

After that job, Gabino quickly found a job at a furniture company willing to pay him $10 an hour in cash under the table.

Laid off there, he came up with a new scheme: He asked a U.S. citizen friend who isn't working if he could use his driver's license and Social Security number to get jobs.

"We are about the same age, and we look alike," Gabino said.

Gabino said he couldn't reveal why his friend didn't need his own documents to work.

Elias Bermudez, founder of the Phoenix-based advocacy group Immigrants Without Borders, said borrowing other people papers has become a common practice among illegal immigrants.

"Right now it's the mode of the day," Bermudez said. "Anyone who doesn't have documents is working for cash or is asking a family member or friend to lend them their paperwork so they can pass E-Verify."

Gabino said he considered himself fortunate. "Other people are charging (illegal immigrants) to use their papers," he said.

With the friend's papers, Gabino said he had no problem passing the E-Verify check for a construction job. Since July, he has been working as a laborer on a block-wall crew building a new strip mall. Gabino said he started off earning $11 an hour, but after two weeks the company cut his pay to $9.50 an hour because of the slow economy.

Still, as long as he can keep making money, Gabino said, he has no intention of leaving Arizona.

Reach the reporter at daniel.gonzalez@arizonarepublic.com or 602-444-8312.

http://www.azcentral.com/news/articles/ ... d1127.html

"lending them their paperwork" huh. You mean engaging in document fraud -- just another crime committed by those (supposedly) doing "jobs Americans will not do."

And if this reporter is so concerned about the state losing tax revenue, if our laws were enforced and the illegal aliens weren't here, the state would be saving much more tax revenue than if the illegals stayed and paid whatever minimal taxes they have been paying.

----

Take action today: Call/fax your Reps, NO form of any amnesty: "pathway" or otherwise.

http://www.alipac.us/ftopict-139332.html
duplicate post

now its changed.

Originally Posted by jamesw62

http://www.alipac.us/ftopict-139339.html
duplicate post

That article is titled

Illegal immigrants fear police-reporting policy

and has nothing to do with this article that I can see.

More recently, Gabino assumed the identity of a U.S. citizen who lent him his valid Social Security number to get jobs.

Both should be put in prison for several years for fraud.

"It forced us to do a lot more stuff underhanded to survive," Gabino said.

ILLEGAL ALIENS LIKE THIS ONE REALLY MAKES ME SICK! THIS GABINO GUY IS NOTHING BUT A WORTHLESS CRIMINAL!

I report under the table construction workers whenever I have the opportunity. It takes a little practice to ascertain when you encounter a situation that state investigators can act upon. Yet the fines to the employer---or to the guy doing the contracting ---can be huge. The state has an obligation to ensure that workers are covered by workmen's compensation policices. Employers are supposed to be paying for this insurance; temporary employment agencies are supposed to pay it, too. If they don't--and someone gets injured---then they may try to rush to cover they guy ("we just hired him, today!")and the state's taxpayers then pick up the bill with no premiums ever paid.

Don't illegal aliens from Mexico ever do anything the legal way?

That's not enough to support his family. Gabino and his wife, who does not hold a job, have four children, two of whom were born in the U.S. The oldest is 13, and the youngest 3 months.

Hmmm..he was making $13 an hour, wife didn't work and yet they have FOUR kids?!?!?! I can tell you that $13/hr cannot sustain a family of SIX without some heavy duty welfare.

Makes me even MORE determined to fight against illegal immigration. They have GOT to go!