A Project of The Annenberg Public Policy Center

Stimulus for Illegal Immigrants?


Q: Will 300,000 illegal immigrants get construction jobs through the stimulus package?

A: There’s no way of knowing how many illegal immigrants may or may not end up with a job from stimulus funds. But this inflated estimate comes from conservative groups concerned about the absence of employee verification requirements in the final bill.

The Center for Immigration Studies and the Heritage Foundation, both conservative organizations, have put forth this estimate, saying that 300,000 of the construction jobs created by the stimulus package "could go" or "would" go to illegal immigrants. Media reports in early March quoted their studies. To be clear, there is no provision in the American Recovery and Reinvestment Act that sets aside construction jobs for illegal immigrants. In truth, no one knows how many workers who are here illegally might end up with a job funded by stimulus money. But the calculations behind the 300,000 figure are highly questionable. The number is more than half the number of infrastructure jobs the White House says will be saved or created.

Here’s where it comes from:

CIS said in early February (before final passage of the act) that $104 billion in the Senate version would go to construction projects. The group then cites an April 2008 estimate from the Federal Highway Administration, saying that $1 billion in construction spending creates 19,584 jobs. A little bit of math shows that’s just over 2 million construction jobs. A 2006 CIS report said that 15 percent of construction and extraction jobs are held by illegal immigrants in the U.S., and a Pew Hispanic Center report that year similarly found that 14 percent of construction workers were here illegally. Using its 15 percent figure, CIS determined that 300,000 of the 2 million construction jobs from ARRA could go to illegal immigrants. (The calculations from the Heritage Foundation are the same.)

Here’s what’s wrong with the math:

White House job-creation estimates for ARRA come nowhere close to that. The Obama administration has released job estimates for both "highway construction" and "infrastructure," neither of which come anywhere close to the 2 million jobs figure. On March 3, the White House announced that $28 billion of ARRA funds would go to highway construction, creating or saving 150,000 jobs by the end of next year, only 95,000 of which are actually highway construction jobs. The rest are "indirect" jobs created when these workers spend their wages in the marketplace. The White House has also said that $150 billion from the act would go to "infrastructure," a category that includes "roads, bridges, public transit, housing and broadband." And that $150 billion, which certainly would fund high-tech and engineering positions as well as lower-wage construction ones, would "save or create nearly 400,000 jobs." Even digging back to an early January report doesn’t produce a figure in the millions. Back then, White House economists predicted, using another economist’s analysis, that a stimulus bill that was similar to what Obama supported would create or save about 678,000 construction jobs.

These job estimates, as
we’ve explained before, are fraught with uncertainty. But one would reasonably expect to see a higher job estimate from the White House, which has vigorously backed the stimulus, than conservative-leaning groups. (In fact, in other reports the Heritage Foundation called the administration’s job estimates "flawed" and "audacious," saying that there are reasons to doubt them.) In addition, economist Mark Zandi, whose industry estimates served as the basis for the White House’s original jobs figures, has downgraded his total projection to 2.2 million jobs. We can’t say whether Zandi’s figure is correct, but it’s worth noting that his total job estimate isn’t much larger than CIS’ and Heritage’s projection for construction jobs alone.

The Federal Highway Administration says its estimate shouldn’t be used to calculate job creation under ARRA.
The April 2008 report isn’t on the FHA’s Web site, but spokesman Doug Hecox told us that somewhat different estimates that are on the site are the most up-to-date. That Web page, however, warns: "This estimate does not represent an estimate for the highway construction expenditures under the American Recovery and Reinvestment Act. FHWA is reviewing the parameters of the legislation and will up date this estimate as necessary." For 2007, the more recent stats say, a $1 billion federal highway investment supported about 15,000 construction or supporting industry jobs (with another 15,000 jobs being supported by the wages those workers spend.) Hecox cautions that these figures "are based on one moment in time" and fluctuate depending on market conditions, such as material costs and the labor pool.

Even if the highway construction estimate was correct now, it can’t be automatically applied to funds for railway, housing or other construction projects. Hecox referred us to the White House’s Office of Management and Budget, which he said was coordinating job creation estimates under ARRA for various agencies. Federal agencies, he explained, were all doing their own respective math, such as using different levels of income to equal one job. Trying to apply these estimates to things that aren’t rail-specific or highway-specific, he says, results in "awkward math." (We contacted OMB but have not received more specific construction job figures.)

 The Root of the Issue

Behind this questionable number, is an issue worthy of debate. CIS and Heritage are concerned that the Senate version, and final bill, did not include a requirement that employers who get money from ARRA use E-Verify, an electronic system operated by the Department of Homeland Security and the Social Security Administration to verify legal work status of employees. The House bill contained such a requirement.

The E-Verify site says that more than 87,000 employers are enrolled in the "free and voluntary" program, with that number growing "by over 1,000 per week." CIS and Heritage argue that without a requirement to use E-Verify, 15 percent of construction workers paid with stimulus dollars would be illegal immigrants. As we noted, they have no way of knowing how many illegal immigrants might be hired, nor can anyone say with certainty if some number of contractors who get ARRA money might already be using E-Verify or be planning to do so. Some business groups, however, aren’t so keen on the idea.

An executive order signed by President George W. Bush said that federal contractors and subcontractors must use the system, a requirement that would have gone into effect in late February, but the Obama administration, at the request of the U.S. Chamber of Commerce, has pushed that back until May 21. The Chamber of Commerce, the Associated Builders and Contractors, and other groups have filed a lawsuit to block the requirement.

The Immigration Policy Center, the research arm of an immigrant rights group, also argues that E-Verify isn’t ready for widespread use. The group points to a December 2006 report from the inspector general of the Social Security Administration, which estimated there were errors in about 17.8 million (or 4.1 percent) of its records which "could result in incorrect feedback when submitted" to E-Verify. The nonpartisan Congressional Budget Office said in 2008 that if the system were greatly expanded, tax revenue would decline, as workers and employers did business off-the-books to avoid using the verification program. The government would also incur costs at DHS and SSA to expand the system.

We take no position on whether a requirement to use E-Verify should have been part of the bill. That’s something for advocacy groups to wrangle over. We do take issue with the 300,000 jobs estimate being presented as a legitimate figure.

— Lori Robertson


Update, March 19: CIS has sent us a response to this article. We’ve posted a pdf of the full letter
here

Sources

Camarota, Steven A. "Senate Stimulus: 300,000 Jobs for Illegals? – 1 in 7 New Construction Jobs Could Go to Illegal Immigrants." Center for Immigration Studies, Feb. 2009.

Camarota, Steven A. “Dropping Out: Immigrant Entry and Native Exit from the Labor Market, 2000-2005.” Center for Immigration Studies, March 2006.

Passel, Jeffrey S. “The Size and Characteristics of the Unauthorized Migrant Population in the U.S.” Pew Hispanic Center, 7 March 2006.

Rector, Robert E. “Senate Stimulus Bill Would Provide 300,000 Jobs for Illegal Immigrants.” Heritage Foundation, 4 Feb. 2009.

The White House. “Highway Spending from Recovery Act Expected to Create or Save 150,000 Jobs By End of 2010.” Office of the Press Secretary, 3 March 2009.

The White House. “American Recovery and Reinvestment Act: A $150 Billion Investment in Our Nation’s Infrastructure – The Largest New Investment Since the Construction of the Interstate Highway System,” 17 Feb. 2009.

Romer, Christina and Jared Bernstein. “The Job Impact of the American Recovery and Reinvestment Plan,” 10 Jan. 2009.

U.S. Department of Transportation, Federal Highway Administration. “Employment Impacts of Highway Infrastructure Investment.” FHWA.dot.gov, accessed 13 March 2009.

Interview with Federal Highway Administration spokesman Doug Hecox, 12 March 2009.

The Office of the Inspector General, Social Security Administration. “Accuracy of the Social Security Administration’s Numident File.” Congressional Response Report, Dec. 2006.

Congressional Budget Office. Letter to Rep. John Conyers. Jr, 4 April 2008.