From the Center
Diversity, equity, and inclusion (DEI) programs have become common as major employers recognize the importance and benefits of encouraging workplaces that better reflect society at large. These efforts, however, have overlooked an important element of the labor force: undocumented immigrants.
About 65 percent of the estimated 11 million undocumented immigrants living in the US are employed in some fashion. Among just the top five countries of origin, undocumented immigrants contributed almost $16 billion in federal, state, and local taxes for the 2019 tax year, had more than $140 billion in combined household incomes, and represented almost $125 billion in spending power.
If they had legal status and were allowed to fully participate in the economy, it would add an estimated $1.7 trillion to US GDP over the next decade.
However, these economic contributions are muted by the workplace realities many immigrant workers face — substandard wages and few workplace protections. Because many of the undocumented work in low-skilled or manual labor jobs, they are vulnerable to exploitation by unscrupulous employers. In the construction industry, where I have worked for 50 years, the problem is particularly acute.
Reform is necessary not just to improve working conditions, promote the fair treatment of employees, and root out abuse and wage theft, but also to enhance the sustainability of industries that depend on immigrants.
Companies are legally prohibited from hiring undocumented workers, but it is not as simple as it sounds. Changes to immigration laws in 1986 — the last major immigration overhaul by Congress — require employers to complete a Form I-9 for every employee hired and verify their residency with a Social Security number or other form of identification. The documents must “appear” legitimate, but employers are not required to verify authenticity, and few companies have forgery experts on the payroll.
The government created an online system called E-Verify that checks workers’ I-9 forms against other government records, but only about a third of employers use the system because it can’t reliably detect forged Social Security documents. Undocumented workers who want to clear E-Verify can simply buy a well-made fake Social Security card online or at the nearest flea market.
Only later, when the Social Security Administration or insurance providers find the documentation doesn’t match, are employers informed of workers’ true immigration status. At that point, they must terminate the employee.
However, the government doesn’t track those workers, and in most cases, they’re not deported. Instead, they frequently wind up working for less scrupulous employers, such as labor brokers, many of whom pay significantly lower wages in cash and forego benefits. Those labor brokers then compete against legitimate businesses, putting companies like mine at a competitive disadvantage for trying to follow the law.
Post-pandemic, companies are transforming supply chains into “ecosystems,” but monitoring these partnerships requires that all stakeholders comply with fair labor practices and environmental, social, and governance reporting requirements. Companies take steps to ensure suppliers aren’t employing child labor in Asia, for example. They should have similar vigilance in monitoring their own subcontractors at home.
Employers also must advocate for policy changes that allow legal status for undocumented workers. Congress has been unwilling to overhaul immigration laws for almost four decades, and there’s little sign of change amid our current political divisions.
However, there’s a simpler, non-legislative option: ID and Tax.
This program is designed to meet the critical labor shortage in essential industries such as construction, agriculture, and services. To be eligible for legal status, undocumented immigrants must have been in the U.S. for a specified number of years and pass a criminal background check. They would then be issued a tamper-proof ID.
Recipients could remain in the U.S. and work legally without fear of deportation, apply for a driver’s license, and buy insurance. Employers would be required to hire them as W-2 employees— rather than contractors— and pay their payroll taxes. This is a rule that currently applies to recipients of work visas such as H-1Bs.
But ID and Tax would not give the undocumented the right to vote, access to welfare programs such as food stamps, or guarantee them citizenship. It would, however, improve national security by collecting current data on undocumented residents — information we don’t currently have.
ID and Tax would add to the country’s economic growth and address the shortage of low-skilled labor, while also improving the livelihoods and working conditions of millions of immigrants.
It could be implemented by presidential order, and it is likely to gain broad public approval because the plan is patterned after the DACA program, which is supported by about three-fourths of Americans.
What’s more, employers and executives can support ID and Tax without ensnaring themselves in messy political debates. It’s a commonsense solution to a problem that’s been festering for far too long.
By extending DEI programs to initiatives such as ID and Tax, employers can become a powerful voice for fairer, more robust workplaces. At the same time, they can address the labor shortage and create a system that treats workers with respect and roots out unscrupulous and exploitive business practices. For companies like mine, it would level the playing field by allowing us to compete fairly while continuing to provide careers, good wages, and benefits for the working men and women who build the foundation of our economy.
Stan Marek is the CEO of the Marek Family of Companies, the largest interiors contractor in the southwestern U.S. He is the author, with Loren C. Steffy, of "Deconstructed: An Insider’s View of Illegal Immigration and the Building Trades."