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The Impact of E-Verify on Massachusetts’ 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 Massachusetts

  • Massachusetts was home to 943,335 immigrants in 2009The foreign-born share of Massachusetts’s population rose from 9.5% in 1990 to 14.3% in 2009, according to the U.S. Census Bureau. 
  • Immigrants comprised 17.5% of the state’s workforce (or 637,339 workers) in 2009.   Unauthorized immigrants comprised 3.7% of the state’s workforce (or 130,000 workers) in 2010.

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

  • Households headed by unauthorized immigrants in Massachusetts paid $138 million in state and local taxes in 2010.
  • 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, Massachusetts will lose $38 million in income tax revenue from these workers.

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

  • Massachusetts’s civilian labor force is 3,497,500 workers, and its unemployment rate is 7.6%. 
  • 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 Massachusetts, we estimate that between 27,980 and 80,443 U.S. citizens and legal workers in Massachusetts would either have to correct their records to keep their jobs.
  • An estimated 0.5% of workers receive an erroneous final non-confirmation. In Massachusetts, up to 17,488 U.S. citizens and lawful workers would receive an erroneous final non-confirmation and lose their jobs.

E-Verify without comprehensive immigration reform will burden Massachusetts businesses.

  • Currently, only 4,064 businesses in Massachusetts are enrolled in E-Verify, which amounts to 2.9% of all Massachusetts businesses.  Mandatory E-Verify would mean a 3,400% increase in the number of businesses using E-Verify in a short time period.
  • Small businesses would be hardest hit. In Massachusetts, there are 138,846 small businesses, and 98% of all state employers are small businesses. 
  • Bloomberg estimated that E-Verify would cost small business $435 per year.  That amounts to more than $60,398,000 per year paid by small businesses in Massachusetts to use E-Verify.

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