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By the Numbers: Business, E-Verify and the California Economy

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If someone tried to force you to pay $312 million for a faulty product, you'd probably be upset.

That is exactly why the business community has joined with labor and civil rights organizations in asking California Governor Jerry Brown to sign a piece of legislation called the "Employment Acceleration Act of 2011" and better known by its bill number, AB 1236.

AB 1236 protects California's businesses and workers from the ill-conceived efforts of some local jurisdictions to force a costly, job-killing federal program called "E-Verify" on private employers; in many locations, the bill would overturn E-Verify mandates that cities have enacted.

Why the widespread uproar? E-Verify is a web-based system that checks employees' work authorization against the social security database. Currently, it is a voluntary program, except for federal contractors, and most businesses don't use it.

Those pushing E-Verify say it identifies workers who do not have authorization to work in the US. But because the social security files are error-ridden, E-verify instead kills jobs, slaps burdens on small businesses, and hurts taxpayers.

According to government data, E-Verify correctly detects unauthorized workers only about half the time. Meanwhile, false positives abound. Consider the testimony of a U.S. citizen and former U.S. Navy captain (with 34 years of service) at a town hall meeting in Ashtabula, OH, a few years back. E-Verify flagged him as not eligible for employment -- and even though his wife is an attorney, it took them two months to clear things up.

Indeed, final error rates in a report commissioned by the US Government suggest that up to 90,000 US citizens and authorized immigrants in California could eventually lose their jobs -- more than the entire population of Santa Barbara, California. Nationally, the figures add up to 770,000 US workers out of work, hardly the right recipe for our economic problems.

Worse yet, small business owners would have to spend hundreds of dollars each in training and certification costs -- adding up to a cumulative total of $312 million for all of California's small businesses.

And it could shrink the coffers of an already stressed state budget. In Arizona, which mandated E-Verify for all businesses, the Arizona Republic newspaper reports many workers have continued to work, but simply been shifted off the tax rolls -- depriving local governments of needed revenue.

The federal government does need to fix our broken immigration system. But mandating E-Verify is just the latest of a series of ideas driven more by emotion than common sense.

Comprehensive immigrant reform should involve integrating workers who are already here, rather than driving them further underground. Meanwhile, forcing job-killing red tape on California's businesses and depriving the state of needed revenue is counterproductive.

It's time for clear thinking and clear action. It's time for Governor Brown to sign AB 1236.

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Manuel Pastor
Professor, American Studies & Ethnicity
Director, Program for Environmental and Regional Equity
Director, Center for the Study of Immigrant Integration