Business, Political, and Faith Leaders in Houston Push for ID and Tax, Practical Immigration Reforms

Business, political, and faith community leaders met recently at the Center For Houston’s Future for an event titled Securing the Texas of Tomorrow: Building through Practical Immigration Reforms to examine how the broken U.S. immigration system is negatively impacting the U.S. and Texas economies and to build consensus behind the practical immigration policy solutions.

A panel of speakers led by Linda Lorelle, Founder of Linda Lorelle Media, brought together Kristin Etter, Director of Policy and Legal Services at the Texas Immigration Law Council, Tony Payan, Director, Baker Institute Center for United States and Mexico, and Stan Marek, Founder and CEO of MAREK Construction, to discuss the impacts of Texas SB4 and to push lawmakers to support needed immigration reforms including expanding legal pathways of immigration and an ID and Tax policy.

The event was kicked off with an educational video, episode 16 of the Rational Middle of Immigration Docuseries, “Exploring Solutions: The ID and Tax Proposal.” The video examined challenges associated with the U.S. having a large population of unauthorized immigrant workers and highlighted the numerous economic, fiscal, and societal benefits that would result from Congress passing an ID and Tax policy to create a method for long-time unauthorized immigrants to earn legal status.

One topic that speakers discussed was that workforce shortages across Texas and the nation are stunting economic growth and driving up inflation. With the U.S. birth rate below replacement level, immigrants play a critical role in helping to fill jobs in key industries. However, the restrictive U.S. immigration system has not allowed for the legal entry of enough workers, resulting in the incentivization of illegal immigration to meet market demands.

Marek explained that the construction companies who hire workers as employees, pay employment taxes, and check immigration statuses during the hiring process simply cannot find enough legal workers.

“The job needs in this state are critical. We’ve got $25 billion of work to do in the medical center, I don’t know where the labor is going to come from. We’ve got housing shortages, I don’t know where the labor is going to come from. The only people who are getting into the industry are immigrants, and a lot of them aren’t going to come to Texas. The infrastructure bill has created demand all over the country. Houses are going to cost more, churches are going to cost more, roads are going to cost more, everything is going to cost more until we can get legal workers that we can train and keep safe. We have people come by every day and we have to ask them if they’re legal and they say no they’re not and we can’t hire them. We could put 500 workers to work tomorrow if we could get them. I know there are thousands of workers out there who have been in this trade a long time and they’re very good but I can’t hire them,” said Marek.

Payan cited some numbers that highlight the critical role that immigrants are already playing in the U.S. economy.

“We underestimate the importance of immigration to the U.S. economy. There’s about 15 million naturalized citizens in the U.S. The workforce here is about 165 million people working. That’s almost 10 percent, then you’ve got another 13-14 million greencard holders. So that’s around 18% of workers in the U.S. that are immigrants…and that doesn’t include an estimated 20 million undocumented workers. This country relies on almost one out of four workers as immigrants to support the economy. Take away those workers and the economy would severely shrink,” said Payan while also noting that studies have shown that the net fiscal impact of immigrants is positive.

Speakers emphasized the need for sensible policy solutions to increase legal pathways of immigration to help alleviate workforce shortages. Etter explained that the current pathways to obtain legal status are much more restrictive than many Americans may realize, and that legislation like Texas SB4 will make workforce shortages worse in Texas.

“Policies like ID and Tax are just a part of expanding legal pathways of immigration. People often say ‘why don’t they just come the right way’ but the problem with the ‘right way’ is that it’s akin to winning the lottery, we don’t really have the right way for immigrants to come here,” said Etter, while also pointing out that unauthorized immigrants who entered the U.S. illegally because they lacked legal pathways to do so have no way to even attempt to apply for legal status unless they leave the U.S. for 10 years.  

“It’s really unfortunate because our workforce depends on it, our economies would be destroyed if immigrants where to leave Texas because of anti-immigrant legislation such as SB4. We’re struggling in Texas with a disconnect between economic values of immigration and how much we benefit both socially and economically from having immigration into Texas, with this disconnect of criminalizing immigrants. That has culminated in the recent passage of SB4 which further criminalizes immigrants here in Texas by targeting them for arrest, prosecution, and deportation at the state level for immigration offenses. Effective solutions are about expanding legal immigration pathways, expanding work permits, making it easier for people to work, for example allowing the undocumented spouses of U.S. citizens to work…so that illegal immigration does not happen,” she added.  

Payan also explained that solutions are needed to reduce chaos at the border, but that the most effective solutions involve federal action to increase legal pathways of immigration and surge resources to expedite the processing of migrants at the border so that those who qualify to enter under current asylum laws can do so with work permits and those who don’t qualify are removed more quickly. He did not support Governor Abbott taking border matters into his own hands in the wake of federal inaction and also stated that Abbott's Operation Lonestar benefits the Governor politically and is making immigration more of a nationwide issue. 

“Under Operation Lonestar the governor has pushed a number of bills through the Texas Legislature that amount to about $11 billion. It’s an enormous amount of money when you think about what we need at the Texas border is really an increased capacity to process these migrants and quickly send those who don’t qualify to stay home, and those who do qualify into Texas, I think it’s really a waste of taxpayer money…It’s all about enforcement. The Governor is throwing money and making a great deal about enforcement, even though he knows that Texas needs the workers. I think the real purpose behind operation Lonestar and the money that is being thrown at it is politics…he’s heard from the business community over and over again, in agriculture, food processing, construction, and just about every industry that we are short of labor and need the workers. And yet the Governor chose to profit politically instead of working with the federal government to address the issue of immigration, create visa paths for immigrants to bring them in, whether it’s new or existing paths, because it pays off. He’s creating a huge political circus and he’s been quite successful because if you think about the fact that he’s been bussing people to Chicago and Washington and New York, it’s paid off in a sense that this moral panic has caught on in places that otherwise wouldn’t be concerned about immigration. The Governor has been successful in spreading that out into the middle of the country and this is going to be a top issue in the elections,” said Payan.  

“SB4 empowers local police officers to ask for immigration papers. They’re not going to do it in Dallas, Houston, Austin, San Antonio, El Paso, or Fort Worth even, so it’s useless. Maybe in the rural areas the police will cooperate a little, they may implement it in counties along the border, but I don’t think the cities in Texas are going to do it because I think mayors and police forces in Texas understand the need for migrants. The main effect that it might have is there might be a lot of migrants who will leave the state and go to friendlier states who are going to benefit from their labor. It’s quite unfortunate that the governor has chosen politics over policy,” he added.  

Currently, SB4 has been put on pause as it awaits a ruling on questions about its constitutionality in the 5th Circuit Court of Appeals before it will ultimately make its way to the Supreme Court. 

Lorelle said that a recent bipartisan attempt to pass a border security bill in the Senate would have improved the situation at the border, but that Republican lawmakers refused to support the bill.

"Clearly this issue has been politicized to the point to where lawmakers refuse to do anything. There was a bipartisan bill that was tied to Ukraine funding that failed to receive enough Republican support to pass because Trump said ‘don’t do it, I want to campaign on this.’ It’s a political football being used as a talking point. We need to push our legislators to actually solve the problem because it is solvable," said Lorelle. 

On border security, Marek explained that the best way to disincentivize illegal immigration would be to increase enforcement against employers that are exploiting unauthorized immigrant labor. However, such an initiative would have to be coupled with an ID and Tax policy to create a method for unauthorized immigrants to earn work permits so that they can work as employees for employers who deduct and match taxes.

“The main contributor to the fact that we’ve had 20+ million people come into this country illegally since the last immigration reform act of 1986 is the jobs. People don’t realize that to go to work in a construction site, restaurant, or a landscape crew, you don’t need an ID, you just show up and tell them you’re ready to work and you get paid in cash or paid as an independent subcontractor, but you’re not going to pay payroll taxes, you’re just going to work. This is true all over the country. They come for the jobs. I’ve talked to so many people in Washington and said ‘don’t build a wall, that’s not going to stop them, have some type of enforcement at the jobsite, if you come to work you need to have a valid ID and work permit. It’s simple,’” said Marek.

“So we have 20 million people here and they’re working, they’re being paid less, they don’t have worker compensation when they get hurt, they don’t have payroll taxes or social security when they retire, but they’re working,” he added.  

Lorelle also pointed out some of the negative impacts of the underground economy in the construction industry that results from a lack of opportunities for workers to obtain work permits.

“Our broken immigration system has created a fake documents industry, it’s been a boon to organized crime, it has created government loss of tax revenue and horrific working conditions. Taxpayers are footing ER bills when workers get injured. It has created higher insurance premiums to cover the costs of indigent care, and it’s created increased costs for construction companies that have to do rework because workers aren’t being properly trained as employees,” said Lorelle.

When it comes to solutions, speakers called for increasing legal pathways of immigration, legislating a permanent solution for DACA recipients and Dreamers who came to the U.S. as children, and passing an ID and Tax policy.

Payan explained that DACA is the proof that allowing unauthorized immigrants to obtain work permits is beneficial to the U.S. economy.

“DACA is an experiment…and it’s been very good. It has allowed 700,000 young folks to join the workforce, and we know how productive they can be, we know that they’re law abiding, they’re committed to staying here, they grew up here. These people pay into the system, they’re very educated, upskilling their contributions to the labor market. DACA shows that providing undocumented immigrants with work permits works,” said Payan.

Marek also expressed support for a legislative solution for DACA and Dreamers, pointing out that it could be a politically feasible first step to further reforms.  

“The low hanging fruit is DACA, those who qualified for the program before it was shut down are working as productive members of society and paying taxes. There are 1.7m more dreamers that can’t get in the program, so they can’t get good jobs and they’re working for cash. We spend billions on education for these people and then they can’t work legally when they graduate high school or college. So that’s number one, we’ve got to get DACA,” said Marek.

Marek also emphasized that an ID and Tax policy is needed to create a method for long-time unauthorized immigrants to earn legal status while simultaneously cracking down on businesses that misclassify workers as independent subcontractors and hire unauthorized immigrants.

“We’ve got at least 2.5 million undocumented immigrants in Texas and we need to come up with a way for them to earn legal status. Not a path to citizenship – it’s not going to happen, but at least a way to get them legal status to get them on the same level as DACA recipients to where they can work and pay payroll taxes, get workers comp, come out of the shadows and quit worrying about getting deported, it’s a very simple concept,” said Marek.

Some of the benefits of such a policy, which he outlined, include that it would:

• Disincentivize illegal immigration
• Reduce worker misclassification
• Alleviate workforce shortages
• Increase tax revenues without raising taxes on law abiding U.S. workers and businesses ($4.75B into Social Security annually for every 1M workers who are allowed to work for tax-paying employers)
• Level the playing field for U.S. workers and businesses playing by the rules

Marek, who has been building support for ID and Tax, explained that the best way for ID and Tax to achieve legislative success is if the leaders of big businesses hold themselves and lawmakers accountable.

“I’ve come to the conclusion that the only way we’re going to solve this is the businesses. Businesses have to step up and demand change. Think about building a city, you’ve got the people building the buildings, the people doing the cleaning, the people doing the landscaping, the people cooking the food. If there are any undocumented workers being exploited in that process, who is responsible? It should be the building owners, big businesses, the people who lease these buildings. They don’t know who is building their buildings and they don’t care, because they hire a general contractor and say it’s your problem, then the general contractor hires a subcontractor and says it’s your problem, and they just keep pushing it down and pushing it down. Now in the last 20 years they have what’s called labor services, where one man can get you 100 people, and ‘oh yeah they’re legal, just don’t check them’. And guess what? Nobody checks. Homeland Security doesn’t go to projects and check if the workers are legal, the IRS doesn’t go into companies anymore asking if people are being misclassified as independent subcontractors. Nobody is doing anything about it because what would you do if you really found out you had 20 million undocumented people working on jobs throughout the U.S. Are we going to deport them all? Shut the city and state down? No. So to solve this it’s going to have to become an issue in the boardrooms of big businesses to where companies say wait a minute, lets be sure that nobody on our project is being misclassified and by the way they have to be legal. If everybody said well they have to be legal, then we’re going to have to find a way to change it so they will be legal because we can’t live without them,” he said.  

Speakers and anttendees echoed Marek’s calls for business leaders to speak up on the need for sensible immigration policy solutions and emphasized the importance of business leaders showing up in Austin and Washington to help prevent the enactment of legislation like SB4 in the future.