Testimony prepared for:
State, Veterans and Military Affairs Committee
January 31, 2007
Jessica M. Vaughan
Senior Policy Analyst, Center for Immigration Studies
Thank you for the opportunity to submit this testimony in connection with Senate Bill 07-029. The bill would help prevent the employment of illegal aliens in Colorado by requiring employers in this state to participate in the federal electronic status verification program known as Basic Pilot. This program enables employers to electronically verify the work eligibility of new hires directly with the appropriate federal agencies, and is widely considered to be one of the most promising tools available to foster increased compliance with immigration laws. Employers enrolled in the web-based program report that it is easier to use than the I-9 paperwork system, and brings no disruption to employers and legal workers. However, the potential impact of Basic Pilot is now stunted, because it is voluntary; those employers who are deliberately ignoring immigration laws can choose not to participate. Requiring all Colorado employers to use this system will disrupt illegal hiring practices that disadvantage law-abiding employers.
Background. I am a Senior Policy Analyst with the Center for Immigration Studies (CIS),1 based in Washington, DC. The Center is a non-partisan, independent research institute devoted to the study of immigration's impact on American society. We support initiatives that contribute to the transparent, predictable and fair enforcement of immigration laws. I have worked with federal lawmakers and with agencies and legislators in several states on immigration policy issues.
Illegal immigration is a serious and growing problem. The Center estimates that a population of roughly 12 million illegal aliens lives in the United States, with at least 225-275,000 residing in Colorado,2 representing roughly 50 percent of the foreign-born population.3
Our research shows that the costs to government of this large illegal alien population are substantial. We estimate that in 2002, the cost to the federal government was roughly $10 billion per year, even after accounting for any taxes paid by illegal aliens. These costs are primarily for Medicaid, health care for the uninsured, food assistance programs, the federal prison and court systems, and education funding. The taxpayers of Colorado incur millions of dollars of additional annual costs from illegal immigration, primarily for Medicaid, education, health care, and public assistance in various forms, including public housing. Illegal aliens account for more than half of those in poverty in Colorado and represent 24 percent of the uninsured population. Eighteen percent of the households headed by illegal aliens in Colorado are using a major welfare program. In addition, every year Colorado taxpayers paid about $564 million to educate children in illegal alien households, and nine million dollars in uncompensated costs for incarcerating illegal aliens.4
Moreover, illegal workers take jobs that could be filled by the large number of native or legal immigrant workers who are currently un- or under-employed. Illegal immigration contributes significantly to the size of the population living in poverty and needing social services. Our research shows that they do not take jobs Americans won't do, but mainly take low-skill jobs at lower wages than employers would have to offer to legal workers, causing labor market distortions and depressing wages in low-skill sectors.5
Immigration policy is a largely a federal responsibility. However, the prospects for meaningful reforms at the federal level that would ease the fiscal, economic, and social burdens imposed on the states by illegal immigration appear remote at this time. The Bush Administration has stepped up enforcement modestly, but conditions further efforts on the adoption of a temporary workers program that is bitterly opposed by many in Congress. Even with new leadership, members of Congress remain polarized over legislative options. Despite disagreement over a comprehensive approach, mandatory participation in Basic Pilot was approved by both House and Senate in the last Congress. It is the one policy tool that has been endorsed by lawmakers and opinion leaders across the spectrum of opinion.
Colorado need not wait for the U.S. Congress to sort out the larger issues. Any jurisdiction is free to take advantage of the Basic Pilot Program in order to prevent illegal employment practices. Research indicates that this action would result in a noticeable decline in the size of the illegal alien population in this state, without placing an unreasonable burden on Colorado employers.6 Equally important, by providing confirmation of work authorization directly from the Social Security Administration (SSA) and/or the Department of Homeland Security (DHS), Basic Pilot takes the guesswork out of determining a new employee's status, so that employers do not have to become quasi-immigration agents, making judgments regarding an applicant's immigration status that they are not qualified to make. Further, Basic Pilot helps ensure that businesses have a stable workforce that is less susceptible to identity fraud and less likely to be disrupted by the increasing level of federal workplace enforcement activity.
History of Basic Pilot. It is widely recognized that employment is the most common incentive for illegal immigration to the United States. In 1986, with the passage of the Immigration Reform and Control Act, it became illegal for employers to knowingly hire illegal aliens. The law required employees to produce documents establishing eligibility for work, but provided no way for employers to ascertain if the documents are legitimate. This spawned a huge counterfeit document industry and enabled employers who deliberately ignore immigration laws to get away with accepting fraudulent documents, while holding out the specter of discrimination charges against those conscientious employers who might inspect documents too closely.
In 1997, the bipartisan blue-ribbon Commission on Immigration Reform, headed by Barbara Jordan, former Democratic Congresswoman from Texas, concluded: Reducing the employment magnet is the linchpin of a comprehensive strategy to deter unlawful migration. . . . Strategies to deter unlawful entries and visa overstays require both a reliable process for verifying authorization to work and an enforcement capacity to ensure that employers adhere to all immigration-related labor standards. The Commission supports implementation of pilot programs to test what we believe is the most promising option for verifying work authorization: a computerized registry based on the social security number."7
Three pilot programs were introduced in 1997 and the most successful, known as Basic Pilot, was reauthorized and expanded by Congress in 2004. An independent evaluation carried out by Temple University's Institute for Survey Research and the private research firm Westat found that Basic Pilot did reduce unauthorized employment among participating employers (the program is currently voluntary).8 The study said that the program did this in two ways. It identified illegal aliens who had submitted false Social Security numbers or immigration documents and it deterred illegal aliens from seeking jobs at employers who participated in the program. A majority of the participating employers surveyed (64%) said that the number of illegal workers applying for work had been reduced under Basic Pilot and nearly all (95%) felt that the program had reduced the likelihood that they would hire illegal aliens.
According to the Department of Homeland Security (DHS) Verification Office, as of January 23, 2007, approximately 1,200 Colorado companies, employing more than 400,000 workers, were registered for Basic Pilot. There are more than 13,000 employers using Basic Pilot nationwide.
How Basic Pilot Works. Participating employers must electronically verify the status of all newly-hired workers within three days of hire, using information that an employee is already required to provide on the Form I-9. Employers key information (name, date of birth, and Social Security number or immigration documentation) into a simple form accessible on the DHS web site and transmit it to DHS. DHS then transmits the information to SSA, which checks the validity of the Social Security number, name, date of birth, and citizenship provided by the worker. The data on non-citizens is confirmed by SSA, and then referred back to DHS to verify work authorization according to that agency's immigration records. Most queries (87%) receive a positive response within three to five seconds.
If the system cannot immediately verify status, the query is referred to other DHS offices in the field that process immigration applications, in case the non-citizen has very recently been approved to work. Currently, between 18 and 27 percent of these queries will require a manual records search by SSA or DHS, although this number will be reduced significantly by June, 2007 (see below).
If neither agency can confirm work authorization on the individual, the employer receives a tentative non-confirmation response. The employer is supposed to check the accuracy of the information it submitted (e.g. for misspellings or transposed numbers) and either resubmit to DHS or ask the employee to resolve the problem with SSA or DHS. If workers do not contest or resolve the non-confirmation finding within eight working days, Basic Pilot issues a final non-confirmation notice, and employers are required to either immediately terminate the employee or notify DHS that they are continuing to employ the person (possibly inviting an investigation and penalties).
Employers Positive About Basic Pilot. An independent evaluation of Basic Pilot commissioned by DHS found that participating employers overwhelmingly report positive experiences with the program 96 percent think that it is an effective tool for status verification.9 Among other findings:
- 92 percent of employers thought the verification did not overburden their staff.
- 93 percent of employers thought Basic Pilot was easier than the existing I-9 process.
DHS provides a variety of options for administering the program that are designed to accommodate all types of employers (a complete description is available at www.uscis.gov/graphics/services). Training tutorials and manuals are available on the DHS web site. Some employers choose to contract with one of 310 approved Designated Agents, who can complete the verification process on their behalf, much as they would provide other services, such as payroll, accounting or background checks.
Basic Pilot is Free. Enrollment in Basic Pilot is free to employers. The system is web-based, and requires only a personal computer and Internet connection, which the vast majority of employers already have and use. DHS provides a software patch to enable the user's computer system to compile and transmit data. The only indirect cost is the time spent on the initial set-up and the tutorial. According to the Verification Office, the average time spent learning how to use the system is one to two hours.
Recent Upgrades to Basic Pilot. A common objection to mandating employer participation in Basic Pilot is that the system works fine with the relatively small numbers of employers now participating on a voluntary basis, but it cannot handle a large volume of inquiries. In 2006, the Basic Pilot system handled over 1.7 million queries. In response to growing interest and the possibility of a federal mandate, the Verification Office recently tested the system to determine its capacity or breaking point. It was determined that the system can handle up to 40 million queries annually.10 The Verification Office plans to add additional servers to meet the demand well before it would approach the breaking point.
Another frequently-mentioned criticism of Basic Pilot is that the system is slow to confirm the status of some eligible workers, especially recently-arrived immigrants, authorized temporary guestworkers, or other legally present non-citizens who may be in a relatively new or exotic-but-legal immigration status. Currently, about 27% of the initial queries to Basic Pilot involving non-citizens cannot be answered automatically, and required manual confirmation involving a DHS investigator. The Verification Office acknowledges that this is an unacceptably high, and has taken steps to improve its connectivity and access to four other DHS databases to achieve a larger number of automated confirmations. The program received $114 million from Congress in FY2007 for these four upgrades, and they are expected to be completed by June, 2007.
Impact of Basic Pilot. The implementation of a mandatory version of the Basic Pilot program has the potential to affect a large share of the illegal alien population within just a few years. Research suggests that between 50 and 60 percent of employed illegal aliens are working on the books."11 Many of these workers are employed in sectors such as construction, food service, hospitality, and farming, where the turnover rates are high. This suggests that a mandate to verify all new hires could potentially deny employment to as many as half of the illegal alien job-seekers within two to three years.
A number of scenarios are likely to result. Some illegal aliens will seek employment off the books to avoid the screening, and undoubtedly there will be employers willing to hire in this way. Existing state labor laws can help address this problem. Others will resort to identity theft instead of counterfeit documents; that is, seeking employment using the name and Social Security number of a U.S. citizen or permanent resident. However, a new federal enforcement initiative launched jointly by the Social Security Administration and DHS in August, 2006 will help close off that option. These agencies will compare information in their databases, check for multiple uses of numbers, and notify employers, who will be obliged to act on the information.
Undoubtedly, a large share of the illegal population, when denied easy access to employment, will choose to reside in other states or return home voluntarily. One recent study found that employment status verification programs had the potential to reduce the illegal Mexican population by as much as 40 percent over five years12
Conclusion. This legislation is a reasonable approach to a difficult problem, and is consistent with the direction many states are moving, and eventually federal government, I believe. The state of Georgia has already enacted a law making participation in Basic Pilot near-mandatory. The Arizona and Rhode Island legislatures will be considering full mandatory participation this year, and a similar Indiana bill passed a committee vote on January 18, 2007.
Mandatory verification of immigration status for new employment is not a silver bullet. Rather, it should be considered as one key part of a larger strategy to address illegal immigration that relies on partnerships between federal and state authorities, and between government agencies. This strategy acknowledges that the population of more than 12 million illegal immigrants realistically cannot be apprehended and deported one by one. Nor is the federal government likely to enact a mass amnesty to legalize this population. Instead, lawmakers should rely on an array of policies to increase the day-to-day enforcement of immigration laws, prevent employment, and encourage voluntary compliance with immigration laws. Other proven tools include electronic status verification for public benefits, immigration law training for state and local law enforcement and public agency employees, strict standards for drivers licensing, and rigorous identification standards for financial institutions. Adoption of these policies will convince a large number of illegal aliens that they would be better off returning home on their own, thereby easing the burden on local communities, and enabling federal authorities to concentrate their resources on the most problematic cases.
Respectfully submitted by:
Jessica M. Vaughan
Senior Policy Analyst
Center for Immigration Studies
3 Immigrants at Mid-Decade: A Snapshot of America's Foreign-born Population in 2005, by Steven A. Camarota, Center for Immigration Studies, December, 2005, http://www.cis.org/sites/cis.org/files/articles/2005/back1405.html.
4 Immigration Data for Colorado, a page on the web site of the Federation for American Immigration Reform, http://www.fairus.org/site/PageServer?pagename=research_research0072.
5Dropping Out: Immigrant Entry and Native Exit From the Labor Market, 2000-2005, by Steven A. Camarota, March, 2006, http://www.cis.org/sites/cis.org/files/articles/2006/back206.html.
6 Attrition Through Enforcement: A Cost-Effective Strategy to Shrink the Illegal Population, Jessica M. Vaughan, Center for Immigration Studies, April 2006, http://www.cis.org/sites/cis.org/files/articles/2006/back406.html.
8 Findings of the Basic Pilot Evaluation, Institute for Survey Research (Temple University) and Westat, June 2002 and Report to Congress on the Basic Pilot Program, Department of Homeland Security/U.S. Citizenship and Immigration Services, June 2004, p. 3. Available at www.uscis.gov/graphics/aboutus/repsstudies.
9 Temple/Westat study, p. 102.
10 The total number of new-hires nationally is estimated by the Bureau of Labor Statistics to be approaching 60 million, so even considering the growing popularity of this program, we are still well within the system's capacity.
11 See Camarota, The High Cost of Cheap Labor, by Steven Camarota, p. 17.
12 Migrants Networks: An Estimable Model of Illegal Mexican Immigration, by Aldo Colussi, University of Pennsylvania, November, 2003.