The Impact of E-Verify on Ohio’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 Ohio.

• Ohio was home to 433,330 immigrants in 2009.  

• The foreign-born share of Ohio’s population rose from 2.4% in 1990 to 3.8% in 2009, according to the U.S. Census Bureau.

• Immigrants comprised 4.4% of the state’s workforce in 2009 (or 259,979 workers), according to the U.S. Census Bureau.  Unauthorized immigrants comprised 1.2% of the state’s workforce (or 70,000 workers) in 2010, according to a report by the Pew Hispanic Center.

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

• Households headed by unauthorized immigrants in Ohio paid $103.9 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, Ohio will lose $25.1 million in income tax revenue from these workers.
  

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

• Ohio’s civilian labor force is 5,893,400 workers, and Ohio’s current unemployment rate is 8.6%. 

• 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 Ohio, we estimate that between 47,147 and 135,548 U.S. citizens and legal workers in Ohio would either have to correct their records or lose their jobs.

• An estimated 0.5% of workers receive an erroneous final non-confirmation.  In Ohio, 29,467 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 Ohio businesses.

• Currently only 4,450 businesses in Ohio are enrolled in E-Verify, which amounts to 2.2% of all Ohio businesses.  Mandatory E-Verify would mean a 4,400% increase in the number of businesses using E-Verify in a short time period.

• Small businesses would be hardest hit.  In Ohio, there are more than 195,000 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 $84 million per year paid by small businesses in Ohio to maintain E-Verify.

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