From the onset, let me just say, I am not trying to be political. I’m just scratching my head and pondering the repercussions of things. Since President Trump has taken office there have been a lot of changes happening at a dizzying rate; chief among them – immigrants entering the United States illegally. Here is a stat President Trump shared in January. America went from over 2,000 undocumented migrants caught at the border every day under Biden to less than 150 per day under Trump. That’s a 93%+ reduction.
What comes to mind when I hear about this reduction of undocumented migrants (which is NOT to be conflated with those who enter the country legally) is how does all of this impact the job market? Sure, fewer are coming in but there are a LOT of undocumented workers inside the country now. Well, there are positive and negative implications to be sure.
On the positive side:
- Labor Force Diversity: Undocumented workers contribute to a diverse and dynamic labor force, bringing a variety of skills, talents, and experiences that enrich the economy.
- Key Industries: They play a crucial role in sectors such as agriculture, construction, hospitality, and service industries, helping meet demand and sustaining economic growth.
- Consumer Spending: Undocumented workers participate in local economies by spending on goods and services, which helps stimulate local businesses and supports economic development.
- Social Security Contributions: Even though undocumented workers may not be eligible for benefits, they contribute to the Social Security system through payroll taxes, which helps support the retirement of others.
- Population Growth: They help counteract declining population trends, which can have positive effects on economic growth and development.
On the negative side:
- Strain on Social Services: Some argue that undocumented workers could strain public resources such as healthcare, education, and social welfare programs, potentially affecting the availability of these services for legal residents.
- Wage Suppression: The influx of undocumented workers in certain industries could lead to downward pressure on wages for both low-skilled and skilled workers, potentially impacting job opportunities and income levels for native-born and legal immigrant workers.
- Tax and Fiscal Impacts: While many undocumented workers do pay taxes, some might also engage in off-the-books or under-the-table work, leading to potential revenue loss for government agencies.
- Legal and Security Concerns: Critics raise concerns about potential national security risks and the difficulty of tracking individuals who may be involved in criminal activities due to their undocumented status.
- Unfair Competition: Some argue that undocumented workers might create unfair competition for legal workers, particularly in industries where there is a surplus of labor.
Undocumented workers come to the USA for a variety of reasons, chief among them is economic opportunity. I understand immediately how it benefits the worker, but what does it bring to the employer? At a glance, an exploitable labor force. Here are a few examples…
- Lower labor costs: Undocumented workers are often willing to work for lower wages than native-born workers or legal immigrants. This can be beneficial for employers who are looking to cut labor costs.
- Increased profits: By hiring undocumented workers, employers can reduce labor costs and increase profits. This is especially true for industries that rely heavily on undocumented workers, such as agriculture, construction, and hospitality.
- More flexible workforce: Undocumented workers are often willing to work long hours, weekends, and holidays, which can make them a more flexible workforce than native-born workers.
- No need to provide benefits: Employers are not required to provide benefits such as health insurance, paid time off, or retirement plans to undocumented workers. This can save employers money and reduce their administrative burden.
- No need to pay payroll taxes: Employers are not required to pay payroll taxes for undocumented workers, which can save them money.
While these advantages can be catnip to some fat cat employers, the legal consequences can be severe should they be discovered. Some key considerations…
- Civil fines: The Immigration Reform and Control Act of 1986 imposes civil fines on employers who unlawfully hire undocumented workers. The fines can range from a minimum of $375 per unauthorized worker for a first offense up to a maximum of $1,600 per worker for a third or subsequent offense.
- Criminal prosecution: Employers who knowingly hire undocumented workers can face criminal prosecution. The penalties can include a maximum penalty of six months imprisonment and a fine of $3,000 per worker.
- Factors considered in determining fines: The size of the employer, good faith of the employer, seriousness of the violations, previous violations, and actual involvement of unauthorized aliens are factors that can be considered in determining the fines.
- Other legal claims: Employers may also face legal claims such as harboring an illegal immigrant or conspiracy to defraud government officials if they knowingly hire undocumented workers.
So, do the advantages to employers outweigh the disadvantages and thereby, incentivize risk? Several major corporations think so as evident by the penalties they have paid.
- Tyson Foods: In 2019, Tyson Foods was one of several large companies that were raided by immigration authorities for hiring undocumented workers. The company was accused of knowingly hiring undocumented workers and was fined $2 million.
- Chipotle: In 2010, Chipotle was fined $1.3 million for hiring undocumented workers. The company was accused of not properly verifying the work authorization of its employees.
- Walmart: In 2011, Walmart was fined $11 million for hiring undocumented workers. The company was accused of knowingly hiring undocumented workers and failing to properly verify their work authorization.
- Swift & Company: In 2006, Swift & Company, a meatpacking company, was raided by immigration authorities for hiring undocumented workers. The company was accused of knowingly hiring undocumented workers and was fined $200,000.
- Abercrombie & Fitch: In 2005, Abercrombie & Fitch was fined $1 million for hiring undocumented workers. The company was accused of not properly verifying the work authorization of its employees.
So, do these employer perks really overshadow the looming specter of hefty fines and legal jeopardy? As we’ve seen, even corporate giants haven’t been immune to the reach of immigration authorities. It’s enough to leave anyone scratching their head, especially when lower labor costs and flexible hours meet the very real threat of raids and million-dollar penalties. Ultimately, whether you view the lure of cheaper labor as an economic necessity or a slippery slope, one thing is certain: the dance between employers, undocumented workers, and the law is a complex waltz—one that will continue to shape our economy, our workforce, and our national conversation for years to come.