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A misguided crackdown

ECONOMICS 101

Administration measures targeting illegal immigrants will end up hurting longtime citizens.

August 11, 2007

It's not often that an administration will introduce new measures by advertising upfront their "negative economic consequences." But illegal immigration has a way of turning politics and policymaking upside down, so now the White House has taken the unusual step of punishing the country for failing to back immigration reform. It's an interesting intellectual exercise, but it may prove disastrous for workers, employers and swaths of the economy.

On Friday, Homeland Security Secretary Michael Chertoff and Commerce Secretary Carlos M. Gutierrez -- the administration's most enthusiastic lobbyists for comprehensive immigration reform -- announced a package of strict measures designed to mollify populist resentment over what Chertoff called "30 years of lip service" to enforcing immigration law.

Effective immediately, employers who receive "no-match letters" from the Social Security Administration informing them that some of their workers' names do not match their Social Security numbers have 90 days to clear up the matter or face fines and possible criminal charges. The SSA will send out approximately 140,000 such letters this year, covering more than 8 million people.

This might seem sensible on paper, especially to those who have long accused the federal government of looking the other way while deep-pocketed farms, factories and service companies knowingly hired waves of undocumented workers. But consider this: One of the more routine causes of names not matching numbers is women who take their husbands' last names without duly reporting the change to the SSA.

As ever, rules intended to target illegal immigrants end up hurting longtime citizens. And if previous immigration restrictions are any guide, the sudden flood of paperwork generated by this provision alone will overwhelm federal record-keepers, creating processing delays that will make 90 days go by awfully fast.

There are dozens more measures in the package, including a requirement that all federal contractors use the new E-Verify system for pre-screening employees, plus some streamlining of visa and background-check backlogs and a push toward strict "exit requirements" for foreigners leaving the country. Added together, the moves will almost certainly cut down on existing document fraud, but at the expense of adding bureaucracy, herding citizens through a demanding new set of legal hoops and turning business owners into immigration agents.

Chertoff and the administration are open about calling the bluff of "enforcement only" as a philosophy. They acknowledge that the changes may hurt the economy, increase the black market and choke off the estimated $7 billion a year that goes into the Social Security trust fund via numbers untethered to future recipients. As an economics lesson, their thought experiment is long overdue and might claim the backing of the majority. As policy, it will move the U.S. further away from being the land of the free.

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