Suman Raghunathan

Employer Sanctions: The Tail Wagging the Dog

Here we go again: more ham-handed attempts at immigration reform via shortsighted enforcement-only policies.

As I said last week, Arizona is the latest (and biggest) to get in line on this one with a new statewide billthat would suspend the business license of a firm that ‘knowingly’ hires undocumented workers the first time it does so, and would then revoke the license if the business was caught employing undocumented workers a second time.

The current enforcement flavor of the month is: (drumroll…) employer sanctions. Yup, we’ve moved from raiding immigrants’ houses at dawn to targeting employers who hire undocumented immigrants. What is new are the considerably steeper penalties many state and local governments want to impose upon employers for hiring undocumented workers.

News flash, folks. The problem isn’t undocumented immigrant workers, it’s government’s lackadaisical attitude toward enforcing labor laws already on the books.

Focusing on employer sanctions to address immigration policy is misguided and doesn’t get at the real root of the issue: the need to fight against employers who trample upon the rights of all workers (immigrant and native born). Sanctions will not eradicate a two-tier labor market that pushes undocumented immigrant workers into a shadowy world of low wages, employer harassment, and nonexistent labor protections. It will simply push undocumented workers further underground, continuing a race to the bottom in terms of wages for all workers, including the American middle class and those who hope to join it.

We’ve heard many horrific accounts of how immigrant workers (documented and undocumented) take the lion’s share of workplace abuses across many industries, and it’s borne out by a fantastic Brennan Center for Justice report on New York City’s unregulated economy. From Filipina domestic workers literally imprisoned in palatial New Jersey mansions without pay to workers owed $2 million in illegally withheld wages by Manhattan’s Associated supermarkets, it’s clear many worker abuses go hand in hand with exploiting workers’ immigration status (or lack thereof). But the real root of the problem here is the poor enforcement of worker protections and labor laws, which apply to workers regardless of their immigration status. If employers knew wage and hour and workplace safety laws would be enforced, there would be no attraction in hiring undocumented workers just to exploit them, so enforcing workplace laws gets at the problem more effectively than immigration enforcement.

The government’s dismal track record of investigating workplace abuses doesn’t help much. The US Department of Labor just can’t keep up with the skyrocketing numbers of workers and businesses they are responsible for monitoring: a 112% growth in workplaces, and 55% more workers in the US over the past three decades. In fact, wage and hour enforcement has weakened over the past 30 years, even as the number of workers and workplaces has shot up: the number of workplace investigators decreased by 14% between 1975 and 2004 and number of citations against employers for not following wage and hour laws went down by over a third. There’s a direct link between workers’ poor wages and lack of government enforcement: a study (employer-backed, no less) estimated workers would make an extra $19 billion annually if employers obeyed workplace laws.

Disappearing workers’ rights in the unregulated economy that employs undocumented workers is the real problem here – not least because the steady erosion of workplace rights, unionization rates, and wage rates hurts American workers and the middle class in particular. Why, you might ask? Without the equalizing force of a union, the domino effect that stems from abusing and underpaying undocumented immigrant workers ends up affecting all American workers. Many industries and companies employ US citizens, immigrants with legal status, and undocumented immigrants all at the same time. The (mis)treatment of one worker will likely spill over onto that of his or her fellow workers.

Problem is, sanctions give employers a chip to use against undocumented workers when they prove too ornery by, say, demanding protective equipment or a lunch hour, or for wanting to join a union. Workers who demand their rights are threatened with firing or worse with being reported to the immigration authorities. Faced with losing income (however meager it may be) or standing up for wage and hour protections, many immigrant workers actually don’t have much of a choice. We know this from the 1986 immigration overhaul (The Immigration Reform and Control Act, or IRCA, which made it a crime to work without proper immigration status)and its segregation of undocumented immigrant into a second class of workers subject to widespread abuse and workplace violations.

A recent Brennan Center report on the unregulated economy in New York City makes the right connection between employer sanctions and their sinister impact on immigrants’ rights in the workplace by tipping the balance of power toward employers:

IRCA created incentives for employers to use cash payment, subcontractors, employee status misclassification and other strategies in order to escape liability for hiring undocumented workers. It also formally criminalized lack of documentation in the workplace, which increase the power of employers over their undocumented workers. Specifically, undocumented workers were illegal in the eyes of the law, but employers were rarely punished for hiring them. As a result, employers could threaten to report workers and their families to immigration authorities if anyone complained about working conditions, with a very real likelihood that deportation would result. Employers could also more safely fire undocumented workers who complained or tried to organize – while retaliatory hiring is illegal, employers could simply argue they complying with IRCA’s ban on hiring undocumented workers.

Without enforcement, firms don’t stop hiring workers who are frequently forced by their immigration status (or lack thereof) to accept whatever wages are offered to them. Faced with a toothless immigration verification system, employers simply take the bait to escape liability for hiring undocumented workers and pay their workers off the books.

Using employer sanctions as part of a nonsensical effort to address the nation’s need for immigration reform will not solve the current disconnect between our labor system’s needs and immigration policy. It also does nothing to honor the economic contributions of the immigrants (documented and undocumented alike) who are already living and working hard in our nation, in addition to sustaining growing consumer markets and shoring up the Social Security system and tax bases. Our economy is built upon an immigrant workforce. Imposing steep penalties on employers will only result in one thing:

Immigrant workers will get pushed further underground, thereby further eroding wage and hour protections and workplace safety, all while pushing down wage rates for all workers – including the American middle class

What we do need are policies that crack down on employers who exploit workers, NOT policies that punish employers who hire undocumented workers in a two-tiered labor system that’s a by-product of our flawed immigration system. If employers knew wage and hour and workplace safety laws would be enforced, there would be no attraction in hiring undocumented workers just to exploit them, so enforcing workplace laws gets at the problem more effectively than immigration enforcement. The Brennan Center for Justice recently released a great report that outlines how this two-tiered system perpetuates an underclass of undocumented immigrant workers who are regularly denied wage and hour protections, safe working conditions, and the right to unionize to demand an end to such exploitation.

A prime example is the supermarket and greengrocer industry in New York City, which employs over 60,000 workers. As the number of unionized supermarkets has declined, so have annual earnings in the food retail industry as a whole: down by 9% in the 1990s. Much of this decline falls upon the shoulders of undocumented immigrants working in non-union grocery jobs, where the ‘going rate’ for a 60 hour more work week is $250-$300 per week – adding up to a meager $4-$5 per hour, well below the current $7.15 per hour minimum wage in New York State. A recent lawsuit against a non-union Brooklyn supermarket tells the story of nine baggers who said they were paid only in tips: they earned as little as $100 a week for 50-66 hours of work. These lucky workers earned a generous $1.50-$2 per hour.

Hurray for a fair week’s work.

(updated)

Suman Raghunathan: Author Bio | Other Posts
Posted at 8:00 AM, Jul 18, 2007 in Immigration
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