From the May/June 2006 issue of
Wisconsin Restaurateur Magazine

The immigration debate and Wisconsin’s economic future
On behalf of its members, WRA lobbies for comprehensive reform
that addresses “real-life issues”

by Sonya Bice

When thousands of marchers rallied for immigration reform at Milwaukee’s lakefront on May 1, WRA President and CEO Ed Lump was one of those on the stage. His message to the crowd: “We join you in opposing HR 4437, the bill that was passed by the U.S. House of Representatives.” Because it focuses on enforcement only, he said, “It is short-sighted and fails to realistically address the real-life issues.”

One of those real-life issues is Wisconsin’s changing demographics and shrinking workforce. The outcome of the debate about the fate of the thousands of illegal workers in its borders will have economic repercussions for state businesses for years to come.

Wisconsin operators have lobbied Congress on related issues, such as temporary visas for seasonal employees, but this marks the first time that WRA has waded into the national debate on illegal immigration.

The stakes for employers were raised dramatically with the passage in December of a bill that would make it a felony to be in the country illegally and would impose heavy fines on employers for violations of a stringent new employment verification system. The bill, sponsored by Wisconsin Rep. Jim Sensenbrenner, passed on a vote of 239-182, with the state’s congressional delegation split on a party line vote, four Republicans in favor and four Democrats opposing. Currently a compromise for more comprehensive reform is being negotiated in the U.S. Senate. The National Restaurant Association, representing the industry in the negotiations, is fighting hard for a more workable reform package that would include President Bush’s proposed guest worker program, a path to citizenship for those who earn it, and an overhaul of the employment verification system that would not put all of the weight of enforcement on the shoulders of employers.

Sensenbrenner issued a statement following a March immigration reform rally, saying that granting a path to citizenship to illegal aliens “would be a slap in the face to all those who have followed the law and have come to America legally.” At a town meeting in West Allis in May, he described HR 4437 as more punitive toward employers than toward illegal immigrants, adding, “if it is harsh and punitive, so be it.”

That kind of talk infuriates one Wisconsin restaurant owner, a small operator with about a dozen workers who have received SSA no-match letters and who have so far failed to provide further documentation of their legal status. The operator, who spoke on condition that he not be identified, resents that employers were being targeted and sees harsh tactics as impractical.

“They can’t take it out on us,” he said. “Once again they want us to be the police of the world.”

He ticked off a list of industries, including restaurants, that rely heavily on the immigrant workforce and said that the American economy could not withstand the loss of 11 million workers. “America would be done for,” he said. “You saw how many companies shut down for the protest marches.”

As WRA noted in a statement to the press, it does not condone lawbreaking. This operator, like most, completed the documentation for each employee, including an I-9 Employment Eligibility Form. When he received the SSA no-match letters, he informed the employees. The letter he received explicitly says it cannot be used as grounds to fire an employee. If, however, an employee were to say that he or she is actually unauthorized to work, the employer must, according to the law, fire the employee. The law forbids knowingly employing unauthorized workers.

WRA’s position
WRA agrees with Sensenbrenner, a longtime ally of small business, on two points: 1) the current U.S. immigration system is not working, and 2) security at the nation’s borders must be tightened.

But WRA believes that proposed reforms that focus narrowly on enforcement—such as plans to deport the country’s estimated 11 million undocumented workers and put employers in the position of enforcing immigration law—would make a bad situation even worse, crippling the economy and punishing small businesses directly and indirectly for a problem that they did not cause and cannot fix.
The association supports reforms that accomplish the following goals:

• strengthen border security;
• permit employers to hire from abroad when U.S. workers are not available; and
• create a path to legal status, and eventually citizenship, for undocumented workers who declare themselves, remain employed, learn English, and pay back taxes.

“The restaurant industry supports comprehensive immigration reform and a path to citizenship for those who are willing to earn it,” Lump says.

“There is a need for these people,” says WRA member Glenn Fieber, owner of Solly’s Grille in Glendale. “Because for some reason, we are running out of American-born people to do the work that needs to be done. And these people want a chance to work.” The best solution to the immigration issue, Fieber says, is one that allows people to come here to work and gives the federal government control over the flow of immigrants.

As for a policy that takes punitive measures against employers, Fieber says bluntly, “we need that like we need a hole in the head.”

Employers often caught in the middle
The association believes the current system puts employers between a rock and a hard place: the law requires employers to verify an employees’ eligibility to work and prohibits them from discriminating on the basis of race or national origin. As small businesses, desperate for reliable help, have increasingly turned to immigrants, they have encountered a system of classifying people that is far more complicated than most people realize.

Take, for example, the simple terms “legal” and “illegal.” According to U.S. Census Bureau figures as of 2004, the 285 million people who live in the U.S. included about 20 million non-citizens. Non-citizens include people who are here legally on a permanent basis (such as those with Permanent Resident cards, or green cards) and those who are here legally on a temporary basis (such as those with time-limited work or study visas), as well as those who have overstayed their authorized stays and those who never had authorization to begin with. There are other sub-classes, too, such as those granted refugee status by the U.S.

Some opinion surveys have shown that high numbers of respondents favor harsher penalties for employers who hire illegal workers. But those numbers in part reflect a lack of understanding of the realities facing employers who are trying to abide by the law. The law, the Immigration Reform and Control Act (IRCA), is clear that knowingly employing unauthorized workers is illegal.

But how and when does an employer know?

After an employee has provided an employer with any of the documents that are required for an I-9 work eligibility form at the time of hire, the employer is not permitted to demand further verification or specific documents, except when a document used for the I-9 has expired. Even if an employer later receives a “no-match” letter from the Social Security Administration regarding an employee, the steps he or she must take are highly regulated to avoid unfairly firing someone who is merely the victim of a clerical error. The letter clearly warns against illegal discriminatory action. (See article on page 22 for more details on SSA no-match letters.) Once an employer actually knows that an employee is unauthorized to work— for example, if an employee admits he or she is unauthorized to work— the employer is obligated to fire the employee. One thing is made clear by the SSA no-match letter: merely receiving such a letter does not mean an employer knows that an employee is unauthorized to work.

Given the difficulty of verifying documents, Fieber says it’s unrealistic to ask employers to serve as enforcers of immigration laws.

“I consider that an impossibility, until the federal government comes up with a way to supply the employer with some sort of an easy-to-use check and foolproof system,” he said. “If an illegal alien presents me with a Social Security card, which some are known to be buying, how do I know if it is a fake? That’s one thing I would worry about, that the government would start making employers responsible all of a sudden. We just can’t do it. It’s too much paperwork and too much time, and anyway, we don’t know for sure if the person is illegal or legal because there is no foolproof check.”

SSA does provide the Employee Verification Service, a system for checking employee Social Security numbers, but employers are expressly forbidden to use it to screen applicants or to determine employees’ immigration status.

Without specialists on staff, paperwork and enforcement requirements of HR 4437 would be close to impossible for small independent operators. “Most do not have highly trained human resources directors with staffs of their own to cross all the t’s and dot all the i’s,” says Lump. “In many cases the owner or manager is doing the hiring, firing, book work, cooking and generally running the business. Their reaction to all this may be to stop hiring anyone who looks like they might be illegal—including legals—thus inviting a lawsuit.”

Wisconsin’s looming labor crisis
Ultimately, the resolution of this debate will have an enormous impact on the state’s economy for years to come. The influx of Hispanic and other immigrant workers—both documented and undocumented— has happened in the larger context of a looming labor shortage in the state. Economists predict that the problem of increasing demand and decreasing supply of labor is only going to get worse.
Eric Grosso is a state labor economist with the Office of Economic Advisors in the Wisconsin Department of Workforce Development. Grosso studies changes in the state’s workforce population. He provided the following snapshot of Wisconsin’s labor pool and predictions, based on birth rates and other demographic information:

• The state’s total population is projected to grow 15 percent by 2030, but the number of those in the “prime working years” (20-59) won’t grow by the same amount. This means, he says, “in many parts of Wisconsin, there will be more people leaving the workforce than entering it.”
• Wisconsin’s birth rate ranks among the bottom of states. Its population is older than average. “We cannot count on a younger workforce catching up to those exiting the workforce and ‘correcting’ potential labor shortages,” he said. “The answer to these shortages will have to be attraction and retention of workers into Wisconsin.”
• Fourteen counties, mostly in northern Wisconsin, have a far higher percentage of jobs in the food service industry than the statewide average of seven percent. Four counties (Florence, Door, Vilas, and Bayfield) have more than double the average—between 14 and 18 percent employment in this industry. “Noteworthy is the fact that these counties have considerably older than average populations (and rising) due to the continued influx of older residents and retirees, coupled with an out-migration of younger residents,” he said.

Things are projected to get even tighter as the industry grows, he says. Food services and drinking places employment is projected to grow 13 percent by 2012, meaning an increase of over 23,000 jobs. “Labor shortages are currently one of the most pressing issues in this industry and they are likely to become much more severe in the coming years as the state’s population contains relatively fewer younger people and adds more retirees, who are a large consumer of this industry.”

Public support for alternatives to mass deportation
While the issue of illegal immigration is a highly divisive one, surveys generally show a majority supports the kind of path to earned citizenship endorsed by WRA, even for those who arrived without documents.

According to a Gallup Poll taken in early April and published in USA Today, fewer than one in five Americans think all illegal immigrants should be deported; by contrast, 63 percent say there should be a way for illegal immigrants to stay and earn citizenship by meeting certain requirements.

The numbers are roughly the same in surveys compiled by the Pew Research Center, a non-partisan research center, for a report entitled, “America’s Immigration Quandary: No Concensus on Immigration Problem or Proposed Fixes,” released March 30: “Overall, the public divides about evenly among three main approaches for dealing with people who are in this country illegally: 32% think it should be possible for them to stay permanently; 32% believe some should be allowed to stay under a temporary worker program under the condition that they leave eventually; and 27% think that all illegal immigrants should be required to go home.”

The same report indicated that survey respondents who had greater contact with immigrants were more likely to have positive opinions of them.

Enforcement actions against employers
Those employers who operate with actual knowledge of the unauthorized status of their workers are at risk of being targeted in an increasingly aggressive enforcement campaign by Immigration and Customs Enforcement (ICE).

Last year, a Green Bay operator was fined and sentenced to six months’ home confinement and five years’ probation for knowingly hiring illegal workers and loaning them money to buy false documents.

At a press conference in late April, Secretary of Homeland Security Michael Chertoff announced that three Baltimore restaurant owners who had employed undocumented workers had recently pled guilty to federal charges and forfeited more than $1 million. He pledged to continue to target employers: “We target those organizations, we use intelligence to define the scope of the organization, and then we use all of the tools we have — whether it’s criminal enforcement or the immigration laws, to make sure we come down as hard as possible and break the back of those organizations.”

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This article is reprinted with permission from Wisconsin Restaurateur magazine. Wisconsin Restaurateur is a bimonthly publication of the Wisconsin Restaurant Association and is sent to all WRA Members as a member benefit. The magazine keeps members up to date on the latest industry trends.

For information on becoming a WRA member, call 800.589.3211