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I-9 Audits and Immigration Policy Failure July 16, 2011

Posted by Afflatus in Economics, immigration, Politics.
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Last week in the New York Times, there was an article about how the Obama Administration’s immigration policies are affecting small businesses around the country. It explains that while the Bush Administration focused on headline-making raids that resulted in arrests of immigrant workers, the Obama Administration has gone after employers with Immigration and Customs Enforcement’s I-9 audits.” These audits consist of requiring employers to verify the eligibility to work in the United States of all its employees. The theory behind the policy is that employers who hire undocumented workers create the demand that produces the influx of illegal immigrants.

While I certainly applaud the Obama Administration for halting the inhumane practices of raids and deportation of immigrant workers, I don’t think I-9 auditing is a good approach to solving our country’s immigration problem. The article details how burdensome and detrimental to production these requirements are on small businesses. Businesses are forced to fire good employees they otherwise would not fire. Business are also required to complete onerous paperwork.  Many even hire lawyers, further increasing their costs. One business owner said he had reduced his 2011 sales goals by 15% after the disruption caused by ICE’s I-9 audit.

Now, I understand that this “onerous paperwork” is attempting to ensure compliance with the law. It is illegal to hire workers that are ineligible to work in the United States, and the Justice Department should enforce the law. But the program is a abject failure. It’s goal – reducing employer demand for illegal workers – is not being achieved, and long-term progress towards the achievement of this goal seems far-fetched. It’s quite clear from the article that the illegal workers whom ICE requires businesses to fire have found other willing employers to give them jobs. So what is really being achieved besides burdensome regulations that hamper economic growth? Demand for undocumented workers is only reduced marginally, while economic growth is reduced substantially.

To me the I-9 audit program seems like a political tool employed by the Obama Administration to provide itself with cover for its support of immigrant-friendly policies such as the DREAM act. Whether this suspicion is true or not, the I-9 audits are yet another example of how our failure to address immigration reform in a comprehensive and smart way weakens America’s economy.

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