This is the first of several excerpts from Deconstructed: An Insider’s View of Illegal Immigration and the Building Trades, co-written by Rational Middle executive producer Loren Steffy. To learn more about this project, listen to the latest episode of the Rational Middle podcast.
Hector had worked for the same company for 13 years. He’d been moved into a supervisory position overseeing as many as 35 subordinates. He was earning about $65,000 a year, which had enabled him to buy a house and provide for his wife and four children. One day, he got a call at the job site and was told to return the main office. His supervisor told him a review by the company’s insurance carrier found the Social Security number he’d given when he was hired didn’t match any in the government’s database.
Hector had three months to resolve the problem. As an illegal immigrant, he knew that whether he had three months or three years, he wouldn’t be able to solve the problem. “I said, ‘it’s not something I’m going to be able to fix,’” he recalls. (He asked that he be identified only by his first name.) Like so many others, he had bought his Social Security card at a flea market.
Over the years, Hector and countless others like him have had thousands of dollars in Social Security taxes withheld from his paycheck for a benefit he will never receive. The Social Security Administration collects billions of dollars a year in taxes from unknown people—those whose W2 forms from their employers don’t match any Social Security numbers. The agency has about 340 million unclaimed tax forms on record, and many of those are believed to belong to undocumented workers. Illegal immigrants contributed $100 billion to the retirement trust fund from 2004 to 2014, according to Stephen Goss, the administration’s chief actuary, yet many receive few if any benefits from their contributions. As aging Baby Boomers retire, putting a strain on entitlement programs, Social Security and Medicare have become increasingly dependent on this revenue. “You could say legitimately that had we not received the contributions that we have had in the past from undocumented immigrants … that would of course diminish our ability to be paying benefits for as long as we now can,” Goss told MSNBC in 2014.
A two-wage earner couple retiring in 2010, having paid Social Security and Medicare taxes their entire working lives, would contribute $722,000 in payroll taxes but will draw $966,000 in benefits, according to a 2012 study by the Urban Institute. In other words, citizens and legal residents will cost the system, on average, $244,000 per household, while Hector and other undocumented workers are contributing $12 billion.
Hector’s parents brought him to the U.S. from Matamoros, Mexico, in 1984, when he was five years old. His parents obtained legal status under the 1986 reforms, but they incorrectly completed his paperwork. He has lived in the country ever since, working for the same company for years, buying a home and raising four children. Various attempts to untangle his legal status have failed.
Hector worked “until the last minute” at the job he loved. When his three months ended, he took a two-week vacation, then got a job doing finishing work for a labor broker earning $12 an hour—half what he made before. After a few years of low pay and poor working conditions, he decided to start his own business renting party equipment. He now employs seven people, all with legal status. He has a tax ID number for his business and makes sure he pays payroll taxes for his workers. “I pay taxes,” he said. “I follow the rules. I have car insurance. I do everything I’m supposed to do. I even have a fishing license,” he said, pulling the folded document from his wallet.
Hector’s dilemma has played out thousands of times in similar situations across the construction industry. In response to increased scrutiny ushered in by 9/11, many employers simply moved more workers off the payroll. In the construction industry, commercial subcontractors followed the lead of their residential counterparts and began classifying more employees as independent contractors. The Shadow Economy began to swell.
Under President Donald Trump’s immigration crackdown, illegal immigrants like Hector live with a growing fear of deportation — something he didn’t worry about, even after his old employer fired him for being undocumented. Now, he fears he will be sent back to a country he barely remembers from childhood. All four of his children are American citizens, and none wants to leave. His oldest daughter was preparing to enter college with plans to become a nurse. His son wants to be an architect. Returning to Mexico would scuttle their dreams. His two younger children are frightened by the prospect of living in Mexico, a country they’ve never seen. As the enforcement actions have ratcheted up in recent years, so has their fear.