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E-Verify’s Perverse Effects

Summary:
Last week, President Trump announced that his immigration plan would not mandate that employers use E-Verify, the employment verification system that checks new employees against government databases. While the president felt it was too “tough” on illegal workers, he is wrong. Nearly all illegal workers passed the system last year. In reality, E-Verify is tough on legal workers who have had nearly 760,000 jobs held up by the system since 2006. This is from David Bier, “E-Verify Errors Harmed 760,000 Legal Workers Since 2006,” Cato at Liberty, May 30, 2019. Read his whole piece to see how the system messes up. It’s often employer error, but the employee has very little time to go to a government office and correct the error. To put the 760,000 number in

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Last week, President Trump announced that his immigration plan would not mandate that employers use E-Verify, the employment verification system that checks new employees against government databases. While the president felt it was too “tough” on illegal workers, he is wrong. Nearly all illegal workers passed the system last year. In reality, E-Verify is tough on legal workers who have had nearly 760,000 jobs held up by the system since 2006.

This is from David Bier, “E-Verify Errors Harmed 760,000 Legal Workers Since 2006,” Cato at Liberty, May 30, 2019.

Read his whole piece to see how the system messes up. It’s often employer error, but the employee has very little time to go to a government office and correct the error.

To put the 760,000 number in perspective, 760,000 legal workers being harmed over 12 years is not a large number. It averages to about 64,000 a year. And to put that 64,000 in perspective, in 2018 of the 100 million new hires in the U.S. economy, 37.6 million were covered by E-Verify.

David Bier concludes by considering what would happen if E-Verify were mandated:

In 2018, only about 37.6 million of the more than 100 million new hires went through the E-Verify system. If every employer used E-Verify, the number of legal workers receiving errors would explode to a projected 200,000 annually or 2 million over a decade based on E-Verify’s current error rate. This would include more than 32,000 legal workers who would receive FNCs and lose out on their jobs completely each and every year.

Even on its own measure of success—ending illegal employment—E-Verify fails miserably. In 2018, E-Verify confirmed 86 percent of illegal hires. While proponents see the 14 percent who don’t get confirmed as worth it, they ignore entirely the cost: the tens of thousands of legal workers who suffer. Americans should not need to “prove their innocence” to get a job. The government has the responsibility to prove guilt. E-Verify cuts against this fundamental principle, and it undermines the rights of every American. Trump was right to reject the system, even if he did so for the wrong reasons.

I think David understates the number of legal workers who will suffer. Why? Because of selection bias. First, I would bet that the employers who voluntarily comply with E-Verify currently tend to be larger employers, and larger employers who are voluntarily complying are probably more careful than small employers who don’t want to be part of the system. Second, and related to the first, I would bet that, size of employer held constant, those who voluntarily comply do a better job than those who don’t want to be part of the system.

One other point that my Hoover colleague John Cochrane stresses and that I have also stated my concerns about is that once E-Verify becomes mandatory, its use will spread beyond the issue of whether the potential employee is legally in this country.

David Henderson
David Henderson is a British economist. He was the Head of the Economics and Statistics Department at the OECD in 1984–1992. Before that he worked as an academic economist in Britain, first at Oxford (Fellow of Lincoln College) and later at University College London (Professor of Economics, 1975–1983); as a British civil servant (first as an Economic Advisor in HM Treasury, and later as Chief Economist in the Ministry of Aviation); and as a staff member of the World Bank (1969–1975). In 1985 he gave the BBC Reith Lectures, which were published in the book Innocence and Design: The Influence of Economic Ideas on Policy (Blackwell, 1986).

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