Dallas Fed Worries About E-Verify Costs

Jumping into the immigration debate, the Federal Reserve Bank of Dallas is attempting to throw cold water on the federal E-Verify employee-screening program.

A new “working paper” by the Fed branch acknowledges that E-Verify has had a positive impact in reducing employment of illegal aliens. The study notes that participation by U.S. employers was higher in states that adopted universal E-Verify mandates, and that fewer illegal aliens live and work in those states.

Researchers also affirmed the obvious — that mandating the use of E-Verify increases employer participation more than any government-contractor requirements.

Texas does not require E-Verify, and, not surprisingly, workplace enforcement actions by ICE have netted large numbers of illegal workers in the Dallas Fed’s backyard. Last month, a local company agreed to pay a $3 million fine and submit to criminal charges for illegal hiring.

Overlooking and rationalizing such misbehavior, the Fed’s working paper fixates on E-Verify’s purported “costs.” 

“Although E-Verify is free to use, it creates an administrative burden for employers, who must take the time to enter the information into the system and then deal with any non-confirmations,” the paper states. “The penalty for non-compliance is substantial in most states — typically, the business’s license is revoked, but the likelihood of being caught is low.”

Then, this incredible conclusion:

“A strictly enforced nationwide mandate that all employers use an employment eligibility program like E-Verify would be incompatible with the current reliance on a large unauthorized workforce.”

Though putatively non-partisan, Dallas Fed boss Robert Kaplan has opined on immigration policy, taking positions in opposition to the Trump administration. Applying a lopsided cost-benefit analysis to illegal activity while setting odds against enforcement, the working paper reflects Kaplan’s biases. In its 45 pages, the speculative assessment makes no mention of the real costs that illegal labor imposes on law-abiding companies and society at large.

After some checking, we found the Dallas Fed’s 1859 working paper that concluded: “Abolishing slavery is costly for employers in terms of compliance and difficulty in hiring workers. A strictly enforced nationwide mandate that all employers use free human beings would be incompatible with the current reliance on a large slave labor workforce.”

That last paragraph is in jest, of course. Unfortunately, the Dallas Fed appears to be taking itself oh so seriously today.

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