The Impact of E-Verify on Virginia’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 Virginia.

• Virginia was home to 805,742 immigrants in 2009.

• The foreign-born share of Virginia’s population rose from 5.0% in 1990 to 10.2% in 2009, according to the U.S. Census Bureau.

• Immigrants comprised 13.4% of the state’s workforce (or 562,454 workers) in 2009.   Unauthorized immigrants comprised 3.9% of the state’s workforce (or 160,000 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 Virginia.

• Households headed by unauthorized immigrants in Virginia paid $165.3 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, Virginia will lose $47.1 million in income tax revenue from these workers.

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

• Virginia’s civilian labor force is 4,208,200 workers, and Virginia’s current unemployment rate is 6.0%. 

• 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 Virginia, we estimate that between 33,665 and 96,788 U.S. citizens and legal workers in Virginia would either have to correct their records or lose their jobs.

• An estimated 0.5% of workers receive an erroneous final non-confirmation.  In Virginia, 21,041 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 Virginia businesses.

• Currently, only 7,770 businesses in Virginia are enrolled in E-Verify, which amounts to less than 5% of all Virginia businesses.  Mandatory E-Verify would mean a 1,900% increase in a short period of time.

• Small businesses would be hardest hit.  In Virginia, there are more than 151,000 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 $65.6 million per year paid by small businesses in Virginia to maintain E-Verify.

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