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Immigration Reform
Monday, Jun 21, 2010 07:01 ET

E-Verify and the unintended consequences of immigration reform
The push to root out undocumented workers is feeding an underground economy -- and starving the public treasury

By Miranda Simon

EAST PALO ALTO, Calif. — About seven of them are idly kicking the curb of the Home Depot parking lot on a Sunday. The lot is empty except for a few cars parked in the spaces near the entrance. They scan pickup trucks for wooden planks, tools, and a rolled-down window through which they can call, What are you building? Do you need help?

Alejandro (who asked to be referred to by his first name only, because he’s an illegal immigrant) is sitting on the curb, letting his flannel shirt rattle in the breeze. His baseball cap hides his eyes, but the unease is in his voice. His life is difficult enough as it is, he says; he hasn’t gotten a job in two weeks. "I have three sons and I’m stone broke," but anything, he says, is better than returning to his home in the poverty-stricken, war-torn state of Sinaloa.

He used to earn $9 a day working at a local restaurant, for three years, until his employer started using E-Verify, a computer system provided by the Department of Homeland Security meant to detect illegal immigrants. Employers run a query with an employee’s name and Social Security number, and E-Verify matches it with information on government databases. Alejandro’s query delivered a message of "tentative non-confirmation," so his employer asked him to provide a valid set of documents or to go to a Social Security office to solve the glitch.

The next day, he was at the Home Depot parking lot, waiting for a contract job. After Alejandro broke the ice, the rest of the day laborers began volunteering stories of their own encounters with E-Verify and how it had delivered them here.

E-Verify became a requirement for all federal contractors last September — but any business can use it. Already, more than 200,000 of the country’s 7 million employers are enrolled in the program, according to DHS, and approximately 1,400 new employers are registering per week. And its use could expand significantly in the near future: E-Verify is an essential component of the immigration-reform proposals unveiled by congressional Democrats in April.

There are plenty of holes in the E-Verify authentication system, but that doesn’t seem to matter all too much. Westat, a contract-based research organization, found that 54 percent of illegal immigrants were not flagged by E-Verify when their information was run. Roberto, a day laborer at the East Palo Alto Home Depot, said he was informed of the system during his job interview and was asked to consider whether he wanted to continue to the next level. He didn’t return, lest his true status was detected. Others who have heard of E-Verify through other means simply don’t apply.

E-Verify has left millions without proper, tax-paying jobs — either because immigrants are flagged or because it deters them from applying. According to figures from the Pew Institute, an estimated 11.9 million unauthorized immigrants were in the U.S. in 2008. In some states, they make up more than half of the workforce in construction and other service industries.

An expansion of E-Verify would put many of these workers on the street or in jobs where they won't be paying taxes. Friedrich Schneider’s 1996 calculation that the underground economy accounts for 8.8 percent of the national gross domestic product is still considered authoritative by academics.

The increasingly violent drug war across the border is deterring illegal immigrants who want to return to Mexico. "Rather than self-deporting, some illegal immigrants are resorting to more informal forms of earning money," wrote Judith Gans, who manages the Immigration Policy program at the University of Arizona, in a 2008 report. This means getting paid in cash as day laborers or buying and reselling whatever products they can get — puppies, strawberries or garage-sale paraphernalia — or taking on jobs where, due to their illegal status, they receive little or none of the benefits of their regular co-workers.

Marie Sebrechts, spokesperson for the U.S. Citizenship and Immigration Services, thinks extending E-Verify may not have as dire consequences as the data suggests. After all, none of these issues is new. "The best scenario would be for employers to petition to get appropriate work visas for valuable employees," she said.

But others have a more pessimistic forecast. “If E-Verify were expanded nationally, some sectors of the economy would have some serious labor problems,â€