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The Impact of E-Verify on New York’s Economy

Some members of Congress have proposed making it mandatory for all employers to use E-Verify—the federal, web-based program through which U.S. businesses can verify the work authorization of new hires.  However, mandatory E-Verify without immigration reform is not a solution to the problem of unauthorized immigration.  Addressing the reality of a workforce that relies on unauthorized immigrants requires a more comprehensive package of reforms—including a legalization program that brings unauthorized workers out of the shadows, and the creation of sufficient legal visas for the immigrant workers America needs.  Mandatory E-Verify alone is likely to harm the economy and U.S. workers.

Immigrants in New York.

  • New York was home to 4,178,170 immigrants in 2009.
  • The foreign-born share of New York’s population rose from 15.9% in 1990 to 21.4% in 2009, according to the U.S. Census Bureau.
  • Immigrants comprised 26.6% of the state’s workforce in 2009 (or 2,673,904 workers), according to the U.S. Census Bureau.  Unauthorized immigrants comprised 4.7% of the state’s workforce in 2010 (or 450,000 workers), according to a report by the Pew Hispanic Center.

Mandatory E-Verify without immigration reform will result in lost tax revenue for New York.

  • Households headed by unauthorized immigrants in New York paid $662.4 million in state and local taxes in 2010, according to estimates prepared for the IPC by the Institute for Taxation and Economic Policy.
  • If E-Verify is made mandatory, unauthorized workers will move into the unregulated, underground economy where they will be paid under the table.  As a result, New York will lose $104.4 million in income tax revenue from these workers.

Unemployment in New York will likely INCREASE as a result of mandatory E-Verify.

  • Surveys of E-Verify have found that between 0.8% and 2.3% of workers received an erroneous response from E-Verify, meaning they had to either correct their records or lose their jobs. Applying the error rates to New York, we estimate that between 76,643 and 220,349 U.S. citizens and legal workers in New York would either have to correct their records or lose their jobs.
  • An estimated 0.5% of workers receive an erroneous final non-confirmation.  In New York, 47,902 U.S. citizens and lawful workers could receive an erroneous final non-confirmation and lose their jobs.

E-Verify without comprehensive immigration reform will burden New York businesses.

  • Currently, only 7,768 businesses in New York are enrolled in E-Verify, which amounts to 1.7% of all New York businesses.  Mandatory E-Verify would mean a 5,600% increase in the number of businesses using E-Verify in a short time period.
  • Bloomberg estimated that E-Verify would cost small business $435 per year.  That amounts to more than $190 million per year paid by small businesses in New York to maintain E-Verify.

Published On: Wed, Jul 20, 2011 | Download File