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Overdue Payday

How undocumented workers pay the country's bills but receive little benefit

By Vrinda Normand

SURROUNDED BY QUIET, manicured neighborhoods on North Seventh Street in San Jose, the white Goodwill building opens into a bustling processing center for what most would consider junk. The sounds of forklifts and rolling carts echo off the plastered walls of the darkened warehouse. A cold draft escapes from the high wooden rafters as dozens of Latino men steadily go about their jobs.

They heave bundles of used clothing into cardboard bins the size of small swimming pools. One man packs a barrel full with plush stuffed animals. The workers sort incoming donations into piles: one for dusty books and forgotten board games, another for the odd plastic ends that were once part of complete toys, still another for the heaps of old fur coats, T-shirts, sweatpants and whatever else went out of fashion 10 years ago.

It was here that Buenaventura Beza, a 48-year-old immigrant from Guatemala, spent four years wading through mounds of unwanted stuff. He worked 40 hours a week at minimum wage, pulling in just enough money to pay for his tiny rented room, survive on a simple diet and send something home to his wife, three children and three grandchildren. Then on Sept. 3, he received a letter from human resources saying there were possible discrepancies with his Social Security number.

Beza had to provide a Social Security Administration receipt showing the information had been corrected within two weeks or else his employment would be terminated. "We must have valid information to process payroll and properly report employees' earnings," the letter explained. "I didn't know what I was going to do," Beza says in Spanish. He felt sad that he would lose his job, because he knew he couldn't correct the false Social Security number he had been using.

Berza's story is not uncommon in the South Bay, where the number of undocumented immigrants is estimated at 100,000, according to Richard Hobbs, director of Citizenship and Immigrant Programs for Santa Clara County. Like many other workers trying to slide under the radar with false documents or Social Security numbers, Beza is caught in a vicious cycle.

He worked for years at a low-wage, dead-end job, paying taxes to the U.S. government, only to be disposed of when his employer received a Social Security Administration no-match list. On the surface, Beza's case seems pretty straightforward—he got fired because he couldn't prove the validity of his SSN. But the same Immigration and Control Act of 1986 that made it illegal for him to work without authorization also gave him certain protections. And the gray areas of immigration law make Goodwill's role in this incident questionable in the eyes of several immigration attorneys.

Trish Dorsey, director of People for Goodwill of Silicon Valley, says a "credible person" (she won't say who, but confirms that the person is not an INS official) alleged that the majority of people working at the processing center on Seventh Street were undocumented. Goodwill considered this comment enough to provide "reasonable suspicion" and felt obligated to verify Social Security numbers for the entire work group at that location. Shortly after, Goodwill received a list of names that didn't match the SSA's records. Beza says he was one of approximately 35 people who received the termination letter. Dorsey could not confirm or deny this number.

"We're really trying to do what is right," Dorsey says. "It does not help Goodwill at all to have to let our employees go. It damages our ability to do the job that we're here to do. But we want to be in compliance."

Goodwill's law-abiding intention, however, might not have been enough for them to understand the precise letter of law, which, indeed, isn't as clear as it should be, explains Anita Sinha, a staff attorney for the National Immigration Law Center based in Oakland. "It's a dance," she says. "It's very delicate."

The SSA started the no-match program merely to inform employees whether they were receiving credit for their retirement accounts (potentially due to a clerical or technical error). Social Security taxes paid with a number or name that doesn't match the system's records go into an earnings suspense file, which held some $374 billion in 2002, according to a report by the Center for Urban Economic Development at the University of Illinois at Chicago. Efforts to reduce the size of this file backfired, as the no-match letters became entangled with immigration enforcement. "Employers started freaking out," Sinha says, thinking the letters were proof of illegal status. Some fired their workers on the spot. Others saved the letters to use as weapons.

"It's a huge issue," says Ron Lind, president of Local 428 United Food and Commercial Workers Union. "Employers get or instigate no-match letters, using them as an excuse to fire people who are trying to organize a union."

Union contracts often use specific language regarding how to respond to no-match letters, Lind says, which can sometimes prevent their abuse.

In Goodwill's case, the company was apparently trying to avoid trouble and keep its records straight. But while it is unlawful to knowingly employ undocumented immigrants, SSA no-match letters do not constitute "constructive knowledge." An employer can ask an employee to correct the information, Sinha explains, but failure to do so is not adequate cause for termination. An INS letter stating this fact is posted on the National Immigration Law Center's website, along with an IRS notice that no-match letters should not result in penalties.

"If the employee never says anything, and if the green card is valid on its face, even though there is a no-match, there is no reason for the employer to let the employee go," Hobbs explains, who is also an immigration attorney. Sinha adds that employers often come to her for advice, and she tells them, "If you do the minimum, you're not going to get in trouble."

In other words, employers should pass the letter on to the employee and make a note they did so. "If they ever get audited by the Department of Labor, they're not going to get fined," Sinha says. "If they start doing a little more, they open the doors to race discrimination, document abuse and other things that can lead to liability."

Federal Rules

Undocumented immigrants, however, often have little recourse to fair treatment. "Typically immigrant workers don't sue their employers unless they really do have a green card, because for one, they don't have any money to sue," Hobbs says. A lawsuit would also attract unwanted attention from the government. "They just want to move on to the next job," he adds.

Which is exactly what Beza did. He now works for a construction company making $8 an hour, a slight improvement from his wage at Goodwill. And while he is happy with the change, he never feels fully secure it won't happen again.

Advocates for legalization programs point out that people like Beza, who are paying taxes and contributing to the economy regularly, earn the right to work here legally. In the 52 months that Beza was employed at Goodwill, receiving an average of $6 an hour, he paid at least $7,488 in payroll taxes.

In fact, a September report published by Working Partnership USA researched the economic effects of immigration in Santa Clara County. The study found that immigrants are a "deal" for the economy, each person paying $1,800 to $80,000 more in taxes than he or she receives in government expenditures. Moreover, immigrants participate in the labor force at a slightly higher rate than U.S.-born citizens, taking manual jobs that complement rather than compete with positions citizens usually hold.

Immigrant labor is also supporting a weakened Social Security system as the "baby boom" generation begins to collect benefits. Since 95 percent of immigrants are below retirement age, they continue to feed the system. Many undocumented immigrants also pay taxes, usually with false Social Security numbers, and are less likely to file for a tax refund or collect future Social Security payments. Though the government criminalizes undocumented immigrants, it clearly benefits from the economic advantages they bring.

Immigrants who are not eligible for Social Security numbers can easily get what is called an Individual Tax Identification Number (ITIN) in order to file taxes each year. Even contract work done "illegally" can be taxed by the IRS with this number.

Eduardo Santos, a Peruvian immigrant, has been filing taxes with an ITIN for the past three years. Despite his meager income from sporadic construction jobs, he forks over hundreds of dollars to the government. In 2003, his tax return showed that he paid $671 in three installments, deducted from an annual income of $4,700.

"I have to follow the federal rules," he says in Spanish. "I have to fulfill my obligations." Keeping a clean record, he thinks, will give him a greater chance of someday obtaining legal status or a permit to work in the United States.

Since the ITIN program began in 1996, 5.3 million people have enrolled for the number, according to the Working Partnerships report. Because it looks like a SSN (though it begins with the number 9), some immigrants have used it to apply for jobs. ITINs have also been accepted to apply for bank loans, purchase auto insurance and, in some states, receive drivers' licenses.


Though it might be difficult to find strong anti-immigrant sentiment in a county where citizens are 36 percent foreign-born, alternative arguments thrive on the national stage. In the past 10 years, books like Alien Nation: Common Sense About America's Immigration Disaster and Death of the West: How Dying Populations and Immigrant Invasions Imperil Our Country and Civilization have caught the public's attention.

A Fresno State University professor and fellow for the conservative Hoover Institute at Stanford University, Victor Davis Hanson published a book in 2003 called Mexifornia: A State of Becoming. Lacking footnotes and scientific research, Hanson's book draws most of its data from personal anecdotes, concluding that immigrants are compromising the greatness of American culture.

The Center for Immigration Studies based in Washington, D.C., studies the impacts of immigration with a vision that seeks "fewer immigrants and a warmer welcome for those admitted," the official website says. CIS author Marti Dinerstein argues "illegal aliens" are using ITINs as identification to "meld unnoticed into our society." As far as tax benefits go, "illegal aliens" are simply not entitled.

For some, the transgression of sneaking across the border or overstaying a visa trumps all the ways an undocumented immigrant might aid U.S. society. The Working Partnerships study estimated the total fiscal contribution made by immigrants in the United States (not only by those who are undocumented) to be between $23 billion and $33 billion each year.

Standing in the doorway of the Goodwill processing center, it is obvious that every visible worker is of Latin American decent. The only language spoken is Spanish. Apparently, American-born citizens have not replaced the crew terminated in September. Watching the workers rummage through the cardboard boxes with weary expressions, clad in faded sweatshirts and stained jeans, one can't help but wonder, How many people are waiting in line for this job?

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From the December 15-21, 2004 issue of Metro, Silicon Valley's Weekly Newspaper.

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