The 1986 Law's Real Failure Was the Fake Document Industry It Created

In 1986 Congress told every American employer in the country to become an amateur forensic document examiner. Squint at a Social Security card. Judge a driver's license from a state you have never visited. Decide, in the time it takes to say "welcome aboard," whether a laminated piece of paper is real. And if you guess wrong in good faith, relax. You are not liable.

Then Congress sat back and was surprised that the paper got better.

What the law did

The Immigration Reform and Control Act of 1986, known as IRCA, was signed by President Ronald Reagan on November 6, 1986. Everyone remembers one part of it, the legalization of people who had lived in the country illegally. Fewer people remember that it was a bargain, and that the bargain was supposed to have two halves. Legalization for those already here, and in exchange, a new regime of enforcement to keep the problem from recurring.

The enforcement half had three main features:

1. Employer sanctions. For the first time, federal law made it unlawful to knowingly hire a person who was not authorized to work in the United States. The provisions are in section 274A of the Immigration and Nationality Act, codified at 8 U.S.C. 1324a. Employers who violated the law faced civil fines, and those who engaged in a pattern or practice of violations faced criminal penalties.
2. The I-9 form. Every employer had to complete a form for every new employee, within three business days of the start of work, attesting that the employer had examined documents showing the worker's identity and authorization to work. The worker also had to attest that he was authorized. The employer had to keep the form and show it to inspectors on request.
3. A good-faith standard. The employer was to examine the documents the worker presented, and if a document "reasonably appears on its face to be genuine," the employer had met the duty. An employer who examined a document in good faith and accepted it was not liable merely because it later proved false.

Read that third provision again. It is the whole story.

The employer's position

Put yourself in the owner's chair. You run a small manufacturing company. You have a job to fill and an applicant in front of you. The law tells you to look at a card and decide if it looks genuine. It does not give you a database. It does not give you training in the security features of the documents issued by fifty states. It does not give you any way to know whether the Social Security number on the card belongs to the person in front of you.

What it gives you is a safe harbor. If you looked and the thing seemed real, you are protected. A rational employer, and I do not say this as a criticism, will do the minimum that the safe harbor requires, which is to look. The law was drafted so that the employer's incentive was to be satisfied by appearance.

There was a second pressure. IRCA also created, in section 274B, a prohibition on discrimination in hiring on the basis of national origin or citizenship status, enforced through a special office in the Justice Department. The purpose was fair: no one should be refused a job because he looks or sounds foreign. But the combination was a trap. An employer who asked too many questions or demanded too many documents risked a discrimination charge. An employer who asked too few risked a sanctions charge. The safest course was to accept whatever was offered, so long as it looked all right. The result is easy to predict.

The fake document industry

A law that tells employers to accept anything that looks real creates a market for things that look real. The market formed quickly.

Counterfeit Social Security cards, fake permanent-resident cards and altered driver's licenses became a cottage industry, and in time something larger. The documents did not have to be perfect. They had to pass a glance. The law was written to require nothing more.

Notice what this did to the enforcement scheme. The employer sanction was supposed to deter illegal hiring by raising its risk. But the safe harbor meant the risk to the employer was close to zero when a document looked right, and the incentive shifted to the sellers of documents, who faced a risk that was also small, because the legal system was much better at prosecuting employers than at tracking down every counterfeiter. A worker who needed a job needed a card. A card cost money. Someone was happy to sell one.

The effect went beyond forgery. Some of the worst consequences fell on third parties. When a worker used a real Social Security number belonging to someone else, that someone could find wages credited to his record that he had never earned, and in the worst cases could face questions from tax authorities. Identity theft was folded into the machinery of immigration enforcement. This is a fair criticism of the system as a whole, and it is one reason that the later debates over verification focused on identity and not just on numbers, as discussed in The Conservative Split Over Mandatory E-Verify, Argued From Both Sides.

Congress eventually recognized part of the problem. In the 1990s it cut the list of acceptable documents from a long list down to a shorter set, and it moved toward verification pilots. Today the form lists documents in categories, with some proving both identity and work authorization and others proving one or the other. But the core design, an employer examining paper, remained. A shorter list of forgeable documents is still a list of forgeable documents.

The agricultural program and its problems

The other half of the story is about the fields.

IRCA contained a special legalization program for agricultural workers, known as the Special Agricultural Workers program, or SAW. It was meant to satisfy the farm lobby, which feared that enforcement would strip the harvest of its labor. Under SAW, a person could qualify for temporary and then permanent residence by showing that he had worked at least 90 days in "perishable agricultural commodities" during the twelve-month period ending on May 1, 1986.

The requirement for proof was thin. Workers could submit affidavits and letters from employers or crew leaders, and the government had a hard time checking them. The number of applicants was far larger than the Labor Department's projections, and in time, as the reviews and the scholarship that followed documented, there was widespread fraud: applicants who had never worked in a field got in on documents manufactured for the purpose. Applications numbered well over a million, and the great majority were approved. I will not quote a precise count of approvals or of fraud, because I am not certain of the figures and the numbers are disputed. The pattern is what matters: a legalization program whose proof was easy to manufacture drew fraud in the same way that a verification system based on forgeable paper did.

There was a fallback in the law, too. If the agricultural program turned out to leave farms short of labor, a second program, the Replenishment Agricultural Worker program, would admit more workers. In practice, the replenishment program was never triggered, because the SAW program had already supplied more workers than anyone had planned for. The farm labor story afterward is a long one, and its earlier chapter, the end of the Bracero program in 1964 and what California's growers did next, is in When the Bracero Program Ended, California Built a Tomato Harvester.

The steelman: the law was a good-faith compromise

A fair reader should hear the defense.

The law's drafters were working in a political landscape in which employers, civil-liberties groups, immigrant advocates and farm interests all had to be satisfied. A system that required employers to verify against a federal database was considered out of reach technologically and politically in 1986. There was no practical way to check names against records in real time. The Social Security Administration's records were not built for the purpose. The idea of a national verification system met opposition from those who feared a national identity card. Given those limits, a document-based system with a good-faith defense was the best that could be passed.

I accept that. It is a fair account of why the law was written as it was. It is not an account of why the law worked, because it did not. The drafters were making a trade, and the trade turned out worse than they hoped. The lesson is not that they were fools. It is that the incentive structure they wrote was predictable, and the people who warned about it at the time were proven right.

What went wrong, in numbered form

1. The duty fell on the party with the least ability to perform it. The employer was asked to detect forgery without tools. Putting the duty on the party with the least information guarantees that it will be performed by looking, not by checking.
2. The safe harbor removed the deterrent. An employer who accepted a good fake was protected. A rule that protects the person you are trying to deter does not deter him.
3. The penalties were rarely used. Employer sanctions require inspections, and inspections require officers. Resources went elsewhere, and a law that is rarely enforced teaches the regulated that it can be ignored.
4. Anti-discrimination rules and sanctions pulled in opposite directions. The employer who sought to be careful was exposed to one risk; the employer who was careless was exposed to another, and the safest course was to ask for nothing and accept anything.
5. Legalization came first and enforcement came later, and later never came. The sequence is the oldest complaint about the 1986 bargain. The amnesty was delivered. The enforcement was, in practice, hollow. A promise that is kept by one party only is not a bargain.

The constitutional point

The Constitution gives Congress, in Article I, section 8, the power "To establish an uniform Rule of Naturalization," and the Court has long recognized that the political branches hold broad power over the admission and removal of aliens, as in The Chinese Exclusion Case (1889), which is discussed in The Chinese Exclusion Case and How the Court Found a Sovereign Power to Exclude. So Congress had the authority to adopt a stronger system in 1986 if it had chosen to.

The deeper issue is the Founders' principle that laws must be capable of being executed. In Federalist No. 70, Hamilton argued that "a feeble executive implies a feeble execution of the government," and that a government ill executed, whatever it may be in theory, must be in practice a bad government. A statute that asks the employer to do something he cannot do, while giving the executive no practical way to enforce it, is a law drafted for the Congressional Record and not for the world.

What it teaches families and employers

The lesson for a person who is not in Congress is practical.

Verification, not paperwork, decides whether enforcement works. Paperwork is a ritual. A check is a test. When the law asks only for the ritual, the market produces the paper. When the law asks for the test, the market has to produce the identity. The difference is the difference between a law and a gesture.

Sequence matters. A reform that gives the benefit first and the enforcement later will deliver the first and not the second. If a future Congress considers a bargain of the same shape, the honest approach is to make the enforcement a condition, with a date and a measure, before the benefit arrives.

The honest employer needs help, not blame. The employer who does the right thing is entitled to a tool that works. The law that asks him to guess at forgeries and then penalizes him for guessing wrong is as unfair to him as to anyone. The case for holding those who knowingly hire off the books accountable is in The Employer Who Hires Off the Books Is Breaking the Law, Not Helping, and it is strongest when the honest employer has the means to comply.

The 1986 law is a case study in what happens when a legislature wants a result but does not want to pay for the machinery that produces it. It wanted workers legalized, farmers satisfied, employers unbothered and the border secure. It got the first two. The other two it left for another Congress. That Congress, in 1996, took a step with the pilot verification programs, and the argument has continued since.

The case in brief

1. IRCA, signed November 6, 1986, paired legalization with employer sanctions and the I-9 form, and the enforcement half failed because employers had to accept any document that "reasonably appears on its face to be genuine."
2. The good-faith safe harbor, combined with the anti-discrimination provision, made accepting appearances the safest choice, and a market in counterfeit Social Security and residency cards grew to supply them.
3. The Special Agricultural Workers program, which required only thin proof of 90 days of farm work, drew applicants far beyond projections and widespread fraud.
4. The defense that 1986 had no technology for real-time checking explains the design but does not change the result: the duty fell on the party least able to perform it.
5. The lesson is that verification, not paperwork, decides whether enforcement works, and that any future bargain should make enforcement a condition and not a promise.

What you can do: Download the current Form I-9 and its instructions from the Department of Homeland Security's website, read the list of acceptable documents, and ask your representative whether Congress should replace document inspection with a verification check.