Imagine a country of 146 million workers, where a massive database maintained by hapless bureaucrats determines who can hold a job. It's a place where simple statistical error alone can annually deny work to half a million of these workers, and those lucky enough to appeal the error must wait months, even years, to reenter the labor pool.
Such a system would ingrain and institutionalize identity theft, cause huge distortions in the labor market, and create a netherworld of illegal employment just like prohibition in the 1920s ingrained organized crime and created a subterranean economy based on illegal booze.
Sound far-fetched? Well, it’s far closer to reality than you think.
Rep. Michael R. McNulty, D-N.Y., chairman of a House Ways and Means subcommittee on Social Security, held a hearing this week on the New Employee Verification Act of 2008 (HR 1515). The act would create just such a database, maintained in Washington by the strapped Social Security Administration (SSA) and another agency you've likely never heard of, the U.S. Citizenship and Immigration Services (USCIS).
Every small business owner in the nation would be forced to participate or face stiff penalties, criminal prosecution, or worse, loss of their business license.
The legislation is an offshoot of the Department of Homeland Security's (DHS) controversial effort to toughen and enforce the government's current "no match" regulations. These regulations require employers to verify the citizenship of people they hire to avoid employing illegal aliens. The information is reviewed in Washington and if it doesn't match government records, such as SSA numbers, employers are notified.
To date, the no-match program has been a bureaucratic mess and has only been informally enforced. Typically, employers leave it up to the employee to straighten out the problem, or ignore it because penalties are light and the rules rarely enforced. In my column last August, New Immigration Regulation Will Hurt Small Businesses, I wrote about the DHS's efforts to toughen the law and impose a huge new burden on small businesses. Small business groups and unions sued, and a judge granted an injunction, forcing the DHS to examine how the change would impact small businesses.
The draconian new DHS policy requires employers who receive a no-match letter to terminate the employee or risk civil or criminal penalties, unless the discrepancy can be resolved within 93 days. In March the DHS announced that it had studied the change, found no material impact on small businesses, and began moving ahead with its plan. That spawned the current round of legislation.
Supporters of the new employee verification bill, sponsored by Reps. Sam Johnson, R-Tex., and Rep. Gabrielle Giffords, R-Ariz., include the National Federation of Independent Business (NFIB). They envision creating a seamless, Internet-based system where an employer can simply go to a central Web site, enter the appropriate information, and receive a quick response from the database regarding a potential job candidate's background.
In a utopian world, the bill might well be an improvement on the DHS's no-match program. But reality is far different. A pilot program in five states has created its own nightmarish snafus. But according to testimony at the hearing from computer experts, SSA managers, the U.S. Chamber of Commerce, and small business owners who have been dealing with the "model" program, a nationwide program would be truly Orwellian.
The pilot Employer Enumeration Verification System (EEVS) was created in 1996 to allow employers with a large volume of new hires to check their status quickly. It was launched in five states - California, Illinois, Florida, New York, and Texas - and later expanded to Nebraska. Last year, the program was updated. Legislatures in five states — Arizona, Colorado, Georgia, Missouri, and Oklahoma — voted to make the new program, called "E-Verify," mandatory.
In Arizona, which has zealously imposed the program, all employers, regardless of size, are required to use E-Verify, said Arizona business owner Mitchell C. Laird, who testified on behalf of the U.S. Chamber at the congressional hearing. Under state law, if an employer "knowingly" employs two unauthorized aliens in a three-year period, the employer's business license is permanently revoked, a "death sentence" for small businesses, said Laird. Since his company intends to hire 900 new employees this year alone, two bad hires over three years would be better than a 99.9% successful hire rate, he noted.
Despite the harsh sanctions, only 15 percent of the 145,000 state employers (or 25,000) had registered for the program as of April 2008, said John Trasviña, president and general counsel of the Mexican American Legal Defense and Educational Fund, a nonprofit group based in Los Angeles. The bureaucratic snafus that have occurred have been both comical in their absurdity and, in some instances, devastating.
Trasviña related the case of Ken Nagel, a restaurant owner in Phoenix, who recently hired one of his daughters, processed her information with E-Verify, and received a reply that she was potentially an illegal alien. In another instance, a naturalized U.S. citizen switched jobs as a car salesman and was told a few days later by his new boss that the E-Verify system classified him as a possible illegal. He was told at a local SSA office it would take up to 10 months to process the DHS paperwork. In the meantime, he is unable to find work because of his E-Verify status.
Laird noted that in his business, which operates 24 Burger King restaurants, more than 14 percent of the initial responses are something other than "employment authorized," forcing the company to begin a burdensome administrative process to clear the application. "Since E-Verify became mandatory in Arizona, applications are down. It is not uncommon for restaurants to have permanent or semi-permanent 'now hiring' signs," he testified.
As bad as that seems, the dislocations caused by a national E-Verify system would be far worse. Eugene Spafford, a professor of computer science at Purdue University, testified that SSA numbers, which would form the basis of the system, have a statistical error rate that ranges from 4 percent to as high as 10 percent, depending on the ethnic group. If the system were expanded to include all 146 million working Americans, 500,000 to 1.5 million workers a year could come under suspicion based on the statistical margin for error alone.
But the system, no matter how well it works, won't be able to detect the real problem -- identity theft. Two years ago, DHS officers raided a Swift & Company meat packing plant in Nebraska and detained nearly 1,300 workers. Even though Swift was using the pilot program, most who were illegal had fraudulent IDs. "Simply stated, unauthorized workers are using stolen Social Security numbers, fake certificates, and fraudulently obtained but 'legitimate' photo IDs to bypass the system," said human resources executive Susan R. Meisinger, who spoke on behalf of the HR Initiative for a Legal Workforce, a group that represents HR managers.
That means if the program went nationwide, the market for stolen identities (the only way to beat the "system") would soar. "E-Verify does not verify the authenticity of the identity being presented for employment purposes, but rather only that the identity presented matches information in the Social Security and Department of Homeland Security databases," Meisninger explained.
In the most bizarre twist of all, the program would be dumped on the SSA, which is already overburdened and suffering from seven straight years of budget cuts. For example, a wounded veteran returning from Iraq now must wait, on average, 517 days to get a hearing on a disability claim appeal, said Greg Heineman, president of the National Council of Social Security Management Associations, which represents SSA managers.
The U.S. Government Accountability Office estimates that it would cost more than $1 billion to implement the program over four years and would require hiring nearly 1,000 new government employees. But even then the SSA would be overwhelmed. More than 80 million baby boomers are just beginning to enter its system.
If anything, the debate over the bill and the DHS's no-match regulations shows just how distorted and desperate the debate has become over immigration policy. The right to a job is fundamental to the nation's continued growth and prosperity. To put the fate of millions of legitimate workers in the hands of federal bureaucrats is a high price to pay, not only in the cost it would impose on all businesses, but in the cost to our fundamental liberties. There has to be a better way.
I think that ultimately, our social security system is in a debacle. With the flood of baby boomers retiring, the government is going to have to leverage in on immigration laws for loss prevention. However, in our current economic situation, I do not think it is a feasable solution to the social security issue. Overall, the events leading up to this is non-effective management of the budget, lack of trained government personnel, and the lack of resources. Do we do the same with Canada?
Comment By: Mary | 5/8/08 at 7:18 PM New Immigration Bill an Orwellian Nightmare for Small BusinessThen, the scenario is...what is the biggest chunk of budget they can obtain? That is the answer, although not the solution, but a pole.
Comment By: Mary | 5/8/08 at 7:20 PM New Immigration Bill an Orwellian Nightmare for Small BusinessAny act that would worsen our already troubled unemployment problem, with no way of obtaining immediate "mistake" resolution - should NOT be implemented. With margins of error that wide and innocent, legitimate citizen's livelihoods on the line, a system with little to no error margin must be in place. Being homeless or destitute is bad enough when it comes upon you naturally. But when it's unjustly thrust upon you because of a government error - That's not ok! There should have been IMMEDIATE resolution for that guy who was flagged as a possible illegal.
Comment By: Wendy J. Roan | 5/8/08 at 7:56 PM New Immigration Bill an Orwellian Nightmare for Small BusinessYour analysis is dead on. I am going to write my congressman and two senators and voice my opinion against these measures.
Comment By: Sam Thacker | 5/9/08 at 8:11 AM New Immigration Bill an Orwellian Nightmare for Small BusinessBusiness big or small that has a need for nearly 20 million illegals over a period of 10 years - deserves what it gets. Business,farming, the hotel industry, restaurants, building trades, meat processing, etc etc etc. USED to get along quite well using American labor it was willing to pay a living wage. The problem is NOW they have become so used to cheap labor in never ending waves they can't stand the idea that they might have to cough up the funds to pay for years of being SUBSIDIZED by the taxpayers of the US. Identity scams BEGAN in earnest when we allowed the floodgates to open post Cold War but specifically since NAFTA helped destroy the Mexican economy and sent hordes of workers north. We have always had some Mexican labor in the US but now it is arriving - legally and illegally from all over the world. The COST of all this - which even Alan Greenspan and Milton Friedman called a business subsidy - is in the billions of dollars. The identity theft business has prospered THANKS to the US government and business failing to secure ports, borders, visas, and who gets the PRIVILEDGE of coming to the US. very month, month in and month out, year in and year out, your U.S. senators and House representatives along with President Bush allow 182,000 legal and illegal immigrants to move into America?give or take a few hundred thousand. By years end, they total 2.18 million virtually uneducated, unskilled and lack English language abilities while arriving with a plethora of diseases and other health care needs. Who pays? You do! How much? Each year, you shell out $346 billion in taxes to pay for those immigrants across 15 federal agencies. The Department of Health and Human Services spent $672.9 billion in 2007 according to financial analyst Edwin S. Rubenstein. ?Immigrants are poorer, pay less tax, and are more likely to receive public benefits than American citizens,? said Edwin Rubenstein, reporting on the National Research Council?s new book: ?The New Americans: Economic, Demographics and Fiscal Effects of Immigration.? The Social Contract Winter 2007-08. www.thesocialcontract.com ?Currently Congress considers an expansion of benefits to 400 percent of the poverty line--$83,000.00 for a family of four,? Rubenstein said. ?Approximately 6.7 million children and adults are covered. In 2006, federal expenditures totaled $5.5 billion. About $605 million was spent on immigrants.? Adding to this bombshell cost assessment for legal and illegal immigrants; the ?Emergency Medical Treatment and Active Labor Act of 1985? requires hospitals to serve illegal aliens who seek emergency care. Your tax collars pay $167 million for illegal aliens. Drug addiction and alcoholism make up the fastest ?disabilities? illegal aliens claim in our ER hospitals: In 1983: 3,000 cases In 1994: 101,000 cases In 2003: 325,000 cases ?EMTALA givers illegals more than medical treatment. A ?disability? diagnosis automatically qualifies them for immediate cash transfer payments,? Rubenstein said. ?The numbers are staggering.? 127,900 illegals on SSI in 1982 601,400 illegals in 1992 2,000,000 illegals in 2003 In the Southwest alone over 87 hospitals were forced to close courtesy of the flood of use by illegal migrants - an unfunded mandate for the states paid for by citizens losing hospitals and taxpayers paying the bill. Business should quit whining and make sure the dimbulbs in DC deal with the BORDERS and VISA system before they get their shorts in a twist about use of some sort of identity system by business. The rational behind this article is not poor small business having to work harder to make sure they are hiring those here either on a green card or legal residents. This article is about maintaining a free ride by business on the backs of taxpayers on one hand, and depressed wages that result from a never ending stream of cheap labor arriving to take jobs our blue collar and lower class used to do. The Orwellian part of all this is how fast a business type can tap dance in service to a corporate agenda on the backs of US taxpayers.
Comment By: Diane | 5/9/08 at 7:13 PM New Immigration Bill an Orwellian Nightmare for Small BusinessI Completely See Eye to Eye with You. I 100% understand where you are coming from, Diane. I am now unable to work after putting in many years with the government. And I have a six year-old daughter who needs medical and dental care -- and I am struggling to get her under the Oregon Health Plan. They actually created a "lottery" for gosh-darned-sake! If you didn't know about this "lottery" until it was too late, you are out of luck. And if you did know about it and you are not randomly selected, you are out of luck. I don't care about me... but every child in the U.S. should receive health and dental care - no exceptions. When I think of all of the money and resources illegal aliens (who don't pay taxes) are getting from those of us who have paid taxes and whatever else the government asks - and then think about how I am FIGHTING to get my daughter some health care and we are surviving on food boxes because "food stamps" are now a luxury too (also consumed by largely the illegal aliens)! -- it makes me sick. I am not proud. At the same time, while I realize this is a travesty and I know something must be done about it... I feel that implementing a system that will further injure innocent Americans is not the answer. I'd love for the U.S. to implement a system whereby if an individual is not a legal resident of our country and abiding by our laws and regulations, they do not get access to our systems, food, shelter, and medical funds. It's only fair... that's what the entire tax system was based on so very long ago, right? I love the overall idea of the new immigration bill. I just don't want anything to be implemented that is going to cause more harm American tax paying citizens. For me, the bottom line is not about business ethics and practices, cheap or free labor. At the end of the day, it's about whether or not we have something decent to eat and when my daughter needs medical attention, she is able to get it. Do you know what happens when you take your child into the emergency room for anything... here in Oregon... if you don't have insurance... you are billed hundreds of dollars. Then when you can't pay it, because you only get $230.00 a month to live on, (not even enough to pay 1/2 month's rent), within a couple of months of that hospital visit -- you are harassed by a collection agency for the money. A couple of months later you are provided with a summons that they are going to take your only money from you to pay that hospital bill. --- When you were forced to go there in the first place because you are unable to get your child any medical insurance. So now, your money can be forcefully taken from you, you become homeless, and God knows what after that! My heart is fluttering with anger and fear right now. Expressing my view about this matter is never easy. It causes terrible feelings to erupt. I was living comfortably in the lower to middle class sector prior to becoming painfully disabled. I had no idea what people were going through regarding poverty and medical needs until I experienced it myself. I once held my head up high and felt that I was a contributing member of society who didn't need anyone's help. Now, well, now I am struggling to even care about life any more. It's nothing but a battle, electric shut off notices, never knowing how we are going to make the rent, barely enough gas to get my daughter to and from school, eating macaroni and cheese every day, (you get the point). I feel disregarded. It shouldn't be this way. What happened to Big Brother and Uncle Sam. I know that if every illegal alien was removed from receiving government resources, my daughter would have medical care today. That's the thing -- most of our American citizens (rich or poor) know this. So why don't we just ABSOLUTELY DEMAND that something be done! Why? Could it really be that the business owners and the rich are so selfish as to not take action because it benefits their pocket books? This is an unacceptable state of affairs. Unbelievable.
Comment By: Oregonian in Protest | 5/10/08 at 7:56 PM New Immigration Bill an Orwellian Nightmare for Small BusinessI can tell you that the Federal Government already has laws in place. One of which says that if an employer employs an illegal alien that he(she) can be fined up to 11,000 Dollars per event. I'm familiar with a number of small businesses in the construction indutry that utilize illegals only. If the feds would enforce this law and fined the employers that amount of money, the employers would effectively be paying for the return of the illegals to their homeland. That would free up money in the system (both State and federal) to help the Oregonian in Protest. Frankly Keith, I don't agree that it's either Orwellian or impractical to expect small business owners to uphold the current law. I don't understand why your position is to negate what has worked in the past when our leaders cared more about the people that elected them rather than new, albeit improper voters. I realize that small businesses would have to decide to obey or not to obey. The difference is pretty easy to spot. when a service company or a construction outfit arrives and no one speaks English. It's a pretty good sign that they weren't brought up in our school system. Maybe you could address accountability for small businesses when they hire illegals. Thats a bigger problem than Phony ID cards and americans that fall into the cracks in the system.
Comment By: Bill | 5/10/08 at 9:41 PM New Immigration Bill an Orwellian Nightmare for Small BusinessOregonia in Protest, I definitely feel for your difficult situation, but blaming illegal immigrant for all your problems is called "scapegoating." Adolph Hitler used it to great effect.
Comment By: diego | 5/13/08 at 11:58 AM New Immigration Bill an Orwellian Nightmare for Small Business