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The Impact of E-Verify on Pennsylvania’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 Pennsylvania.

  • Pennsylvania was home to 691,242 immigrants in 2009.
  • The foreign-born share of Pennsylvania’s population rose from 3.1% in 1990 to 5.5% in 2009, according to the U.S. Census Bureau.
  • Immigrants comprised 6.4% of the state’s workforce in 2009 (or 419,715 workers), according to the U.S. Census Bureau.  Unauthorized immigrants comprised 1.7% of the state’s workforce in 2010 (or 110,000 workers), according to a report by the Pew Hispanic Center.

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

  • Households headed by unauthorized immigrants in Pennsylvania paid $135 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, Pennsylvania will lose $34.9 million in income tax revenue from these workers.

Unemployment in Pennsylvania 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 Pennsylvania, we estimate that between 50,753 and 145,917 U.S. citizens and legal workers in Pennsylvania would either have to correct their records or lose their jobs.
  • An estimated 0.5% of workers receive an erroneous final non-confirmation.  In Pennsylvania, 31,721 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 Pennsylvania businesses.

  • Currently only 5,357 businesses in Pennsylvania are enrolled in E-Verify, which amounts to 2.3% of all Pennsylvania businesses.  Mandatory E-Verify would mean a 4,300% increase in a short period of time.
  • Bloomberg estimated that E-Verify would cost small business $435 per year.  That amounts to more than $101.3 million per year paid by small businesses in Pennsylvania to maintain E-Verify.

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