MUSINGS OF A CEO

Over the July 4 weekend the National Catholic Reporter, one of the most widely read newspapers among Catholics and other faiths, published my article about immigration on its front page.  The piece is a little bit more political than the blog I wrote on immigration because I point to the Republican Party as the main reason we will not get comprehensive immigration reform this year.

It is frustrating  that immigration reform has become such a political football.  Over 11 million people continue to live in this country without legal status while doing jobs other Americans largely do not want.  Hispanics toil in the fields of Salinas, for instance, bent over cutting iceberg lettuce using machetes, probably not too differently than Okies did in the 1930s.  There’s no line of Anglos waiting to take these jobs. In fact when one grower recruited welfare-to-work candidates in the 2000s they usually lasted a single day.

The left argues against immigration reform on the grounds that immigration depresses wages. This argument has been used against immigrants since the 1840s, when the Irish began coming in waves thanks to the potato famine.  But this position has been largely ignored by the Democrats for many reasons, including the hope that Hispanic voters would back the party.  But given the pro-life views of Hispanics there is no guarantee this would happen over the long-term.

Republicans simply seem hamstrung.  Speaker Boehner would like to move some sort of package through, but the Tea Party will not have it.  Their opposition stems from many beliefs, including worry that if those without status  became newly minted Americans they would end up on welfare or worse.  Instead, they argue for strengthening borders and deporting as many illegals as possible.  I heard Newt Gingrich talk once in a small group and he argued that those without status should return to their countries and apply to return.  But how would he deport 11 million people? I asked.  Rail cars?  Imagine that image.  He had no answer. Other manufacturers in the room asked him who would do the jobs those people performed. Again, no answer.

How ironic this article was published on Independence Day.  Today we celebrate the American spirit, which includes the acceptance of immigrants, those who typically drive the next generation of innovation and provide the labor that increases productivity.  It is not a day we celebrate closing our borders, disenfranchising and deporting 11 million people, a move which would wreck our history of welcoming those “yearning to breathe free” as the Statue of Liberty declares.

If you favor immigration reform please write or email your Congressperson.  Only by adding our voices will anything get done.  Since involvement in the political process is  something to be encouraged anyway, get involved if you don’t favor comprehensive reform.  But if you believe that, come up with a realistic plan to help those in our country who hide in the shadows.

Enjoy the article.

Published in National Catholic Reporter (http://ncronline.org)

 Immigration raids harm immigrants, employers

Kevin Kelly    |  Jul. 7, 2014   Immigration and the Church

As the current congressional session dwindles away, immigration reform looks dead. With the House Republican caucus in disarray following the electoral defeat of Majority Leader Eric Cantor of Virginia and the hardening anti-immigrant posture of the party, the Senate’s comprehensive reform package likely won’t get passed. This means any overhaul appears dead until after the presidential elections in 2016.

This is bad news for immigrants and terrible news for employers. Immigrants will continue to live in fear of deportation and companies will continue to be afraid of the “silent raids” by Immigration and Customs Enforcement (ICE) that have become so widespread under President Barack Obama.

About two years ago, our company, Emerald Packaging Inc., which manufactures plastic packaging for food, suffered a silent raid. ICE came to our Union City, Calif., headquarters without notice and hustled off copies of our I-9s, the forms employees must fill out detailing their right to work in the United States.

ICE checks social security numbers and work visa status. Anyone whose name does not match the declared social security number or whose work visa has lapsed must be terminated. Companies face stiff penalties for such technicalities as putting information in the wrong box on the form — a common error, since the I-9 is complicated. Owners can be charged with felonies if they knowingly hired those living in the U.S. illegally.

Our audit took three weeks but has left wounds that will never heal. We lost 18 people out of a staff of 200. They were some of our longest-tenured employees, the best machinists and operators. The result? Productivity fell and costs zoomed. Those affected lost well-paying jobs. Some suffered home foreclosures and battled depression and anxiety. I felt so helpless to protect them and so angry at the financial impact on our business that I sought grief counseling. It did not work.

We had no idea if we had on staff immigrants who were in the U.S. illegally. For many years, no system existed to check. The government now provides the E-Verify system, which matches social security numbers, but the law does not allow checking on current employees. Among our 180 factory employees, we have many immigrants. Many arrived years ago, bought homes, raised families, paid taxes and contributed mightily to our company.

Take Miguel Gonzales. He had worked with us for more than 20 years, maintaining and troubleshooting the toughest machines in our company. Miguel was a model employee, never missed a day, able to handle his machines without help from our overworked maintenance department. He was also a strong leader, willing to speak his mind when he felt employees weren’t being treated fairly or managers were playing favorites. He made more than $18 an hour plus full benefits, including medical coverage for his family.

Word of the raid spread through the factory. Within 48 hours, nine employees identified themselves as being in the country illegally. Because the law says we cannot knowingly employ such people, we had to let them go. Over the following weeks, a steady trickle confessed. By the time ICE came back and told us that 18 of our employees were not eligible to work, 17 had outed themselves, including Miguel. Fortunately, ICE found the company had done nothing wrong and we were not fined.

Without Miguel, bag department productivity fell, about 4 percent during the quarter after he left. Other departments suffered too. The head of our ink department, Sergio, who had worked with us for more than 15 years, ended up out the door despite living in the country since childhood. Sergio earned well over $20 an hour and was famous for finding unique ways to save money. The next quarter after we lost him our ink costs rose 10 percent. His replacement simply lacked his inventiveness. During the next two years, Sergio’s dismissal cost the company more than $600,000, money that could have been invested in equipment that would create jobs.

Fast-forward two years. Six of the 18 whom we had let go are back. They achieved legal status through various means. One received his work permit due to illness of a child. Another was already en route to a green card. Two achieved status through another family member.  Sergio, who promptly cut ink costs 10 percent upon his return, turned out to be a citizen whose status had been confused by the movement of his family back and forth across the border and improper record-keeping by our government. It took him two years to rectify the problem, during which he could have been deported anytime. His wife, overcome with anxiety, ended up on medication.

Most of the remainder, I think, found other jobs. I know two returned to Mexico, including Miguel. He simply decided he hated living in the United States. He told me he could not understand a country that persecuted hardworking, tax-paying individuals, a country that wanted Mexican labor but pretended otherwise. He was tired of looking over his shoulder. He took his family, including three American-born children, and left.

Why didn’t at least the six who gained status do so earlier? If you knew the immigration maze, you might understand. Many Hispanics do not trust the system. They are routinely gamed by lawyers who demand money up front and then never do anything. The client does not feel they can sue because they are without status. Then there is the system itself, which can take two identical cases and make completely opposite rulings, leading to a green card for one, and deportation for another. Cost is also a barrier. Getting status can cost more than $20,000.

Given my company’s experience, I wonder how many of the 11 million immigrants living in this country illegally have a path to legalization. Six of our 18 did, or 30 percent. It is a small sample pool, but what if 30 percent of such immigrants could gain status but are simply too afraid or confused? If so, more than 3 million people could be legalized today regardless of what Congress does.

I am the grandson of Irish immigrants who fled poverty and civil war during the 1920s. Undoubtedly, the door would have been closed to them under today’s system. Instead, my paternal grandfather, who had very little education, worked as a laborer and sent my father to college. He started a successful business and has contributed to society through extensive charitable activities. Clearly, our country would be poorer without his success and that of others like him, the sons and daughters of immigrants.

The irony is that silent raids have taken off under a Democratic president, one who says he favors immigration reform. Under the Obama administration, ICE I-9 audits have gone stratospheric. Since 2008, more than 12,000 raids have been conducted, with more than 300,000 people losing jobs. No other period in our history comes close.

Now the fate of immigrants waits on Congress. The Senate passed a good bill. It would provide a path toward citizenship for people like Miguel. Anything that keeps America productive cannot be so wrong. We need hard workers. Many Americans, especially in California, no longer want or have the skills for factory jobs, not even well-paying jobs like those we offer. Accepting this reality leads to only one answer: immigration reform. The House, especially Republican members, only cause pain to immigrants and harm to our economy the longer they refuse to act.

Kevin Kelly is CEO of Emerald Packaging in Union City, Calif., and a former reporter for Business Week.

About two years ago our company, Emerald Packaging, which manufactures plastic packaging for food, suffered a silent raid by Immigration and Customs Enforcement (ICE). Like thousands of companies over the last few years, ICE came without notice and asked for copies of our I-9s, the forms employees must fill out detailing their right to work in the United States, including proof of legal status. ICE takes the forms and checks social security numbers (SSN) and work visa status, and anyone whose name does not match the declared SSN or whose work visa has lapsed must be terminated. Companies themselves face penalties for such technicalities as putting the necessary employee information in the wrong box on the form, a common error since the I-9 is a complicated document. Worse, they can be charged with criminal penalties if they have knowingly hired illegal aliens.

Memories of this moment flood back into my brain as Congress muddles through a conversation about  immigration reform again.  The audit, which took three weeks, left scars on our company, the employees caught up in the fracas, and my soul.  We lost 18 people out of a staff of 200.  They were some of our longest tenured people, the best machinists and operators, friends.  Productivity fell and costs zoomed.  Those effected lost good paying jobs, and in some cases lost homes and suffered depression and anxiety. I felt so helpless to protect them, so angry at the financial impact on our business, that I sought grief counseling. It did not work.

We really had no idea if we had illegals on staff. For many years no system existed to check legal status. The government now provides the E-Verify system which matches social security numbers but the law disallows checking the status of current employees. Among our 210 factory employees who produce the plastic packaging we make, we have a mix of Asians, Hispanics and a smattering of Anglos and African-Americans, the two former groups including many recent immigrants. Some had immigrated years ago, bought homes, raised families, paid taxes and contributed mightily to the building of our company.

Take Miguel G. He had worked with us for over 20 years, maintaining and troubleshooting some of the toughest machines in our company, those that make plastic retail packaging that wrap lettuce, hold carrots or protect celery. Miguel was a model employee, never written-up, at work every day, able to handle his machines without help from our overworked maintenance department. He was also a strong leader, willing to speak his mind when he felt the company wasn’t treating people fairly or managers were playing favorites, as can happen. He made over $18 an hour and had full benefits, including medical coverage for his family and a pension program.

So off went the I-9s on which the fate of Miguel and others rested. Word of the raid spread through the factory and within 48 hours and nine employees immediately came forward and identified themselves as illegal aliens. Because the law says we cannot knowingly employ such people, we had to let them go on the spot. Over the following weeks, while ICE audited our documents, a steady trickle of employees came forward and confessed. By the time ICE came back and told us that 18 of our employees were not eligible to work in the United States, 17 had outed themselves, including Miguel. Fortunately, I suppose, ICE found the company had done nothing wrong and we were not fined. In our favor was the fact that most of the jobs affected paid well and offered full benefits, so the government could not find that we had hired illegals to keep our labor costs low.

I was devastated, as were many in the company. Most of those caught had worked with us for over 10 years, some for as much as 15 or 20 years. Overnight we lost their experience. Of course we replaced them, but in many cases their replacements did not measure up.  Either they did not have their predecessors drive or the same commitment. It’s not like we had a huge pool to draw from. As a company that prints on plastic and produces sophisticated packaging there just are not people with the skills living in the San Francisco Bay Area anymore.  Probably not the entire country either.

Without Miguel bag department productivity fell, about 4% during the three months after he left. Other departments suffered too. The head of our ink department, a young man named Sergio, who had worked with us for over 15 years, ended up out the door despite living in the country since childhood. Sergio earned well over $20 an hour and was a magician, finding unique and subtle ways to save money. The next fiscal quarter after we lost him our ink costs rose 10%. His replacement just did not have the inventiveness. During the next two years the loss of Sergio cost the company over $600,000, money that could have been invested in equipment that would create new jobs.

Fast forward two years. Six of the 18 who we had to let go are back. They achieved legal status through various means. One received his work permit through hardship status, thanks to illness of a child. Another was already in route to a green card when she was let go. She returned six weeks later. Two achieved status through another family member. Amazingly Sergio turned out to be a citizen — that’s right, a citizen from birth — whose status had been mixed up thanks to the movement of his family back and forth across the border and improper record keeping by our government.  But it took him two years to rectify the problem.  His wife, overcome with anxiety, ended up on medication to help her cope.

Most of the remainder, I think, found other jobs. I know two returned to Mexico, including Miguel. He simply decided he hated living in the United States. He told me he could not understand a country that persecuted hardworking, tax paying individuals, which wanted Mexican labor but pretended otherwise. He was tired of looking over his shoulder all the time and wondering if he would be deported, say if he was pulled over by a police officer while driving; without a driver’s license the likelihood he’d be shipped back to Mexico was high. So he took his family, including three American-born children, and left.  My company and our country lost a very productive man.

Why didn’t at least the six who gained status do so earlier? If you have not had experience with ICE you might not understand. Many Hispanics, especially Mexicans, do not trust the system. They are routinely gamed by huckster lawyers who ask for money up-front then never do anything. The client, taken for the ride, does not feel they can sue the attorney because they are without status. Then there is the system itself, which can take two absolutely identical cases and make completely opposite rulings, leading to a green card for one person and deportation for another. Many do not want to take the risk. Cost is another barrier. Getting status can run well over $20,000.

We helped some former employees find reputable lawyers who saw their cases through successfully. Everyone who gained status to work — we made sure they were legal by using the E-Verify to check their papers — was given their seniority back and any annual pay increases they may have missed. We did not let those we had hired to replace them go.  In some cases, like the ink department where Sergio has taken the reins again, we simply made the former manager his assistant. Ink costs have fallen 7% in the months after his return.

I cannot help but wonder how many of those others we had to let go could have achieved status. Think about it. Six of 18 did, or 30%. It is a small sample pool, but what if 30% of those supposedly illegally in our country could become legal but they simply are too afraid, uninformed, bilked by lawyers or trapped in the immigration system waiting for a ruling that sometimes can take years? If so, over 3 million people could be legalized today. How can we not stop and help them find their path to status? Especially if they have lived here peaceably, paid taxes bought homes and raised children.

Madness, really. As the grandson of Irish immigrants who fled poverty and civil war during the 1920s, I cannot wonder what might have become of them under today’s system. My paternal grandfather had some education, not much, worked as a laborer but sent his children to college and one of them, my father, started a successful business and has contributed to society through extensive charitable activities. What if the country had been denied his success?

Moreover, contrary to those who bleat about Mexicans taking jobs from Americans, usually they are doing things Anglos do not want. Factory work, even when it pays well and offers benefits, just is not attractive. They don’t like the dust, noise, or the working hours, like graveyard shift. They no longer want physical work. They don’t have the skills. Sad to say but most Anglos would rather collect unemployment or work at Home Depot than set foot in a factory. We know this because very few apply. When they are offered a job, they usually refuse because they have to start on the night shift.  Meanwhile those that want the jobs are being forced out.

The irony, of course, is that this policy of silent raids has taken off under a Democratic president, one who says he favors immigration reform. Under the Obama Administration, ICE I-9 audits have gone stratospheric. Since 2009 over 9000 raids have been conducted, with more than 300,000 people losing jobs. No other period in our history comes close. I wonder how many of those people could have been or were actually legal, maybe even citizens like Sergio? Perhaps the government should spend time finding out whether people have cases to stay in the United States rather than spending dollars to deport.

But that’s up to Congress, one dominated by Republicans hostile to reform. The Senate passed a good bill. It would create more slots for people who attained engineering degrees and the like to stay here. It would provide a path towards green cards and maybe citizenship for people like Miguel. But the House has so far baulked and instead mumbled on about doing something piecemeal.

I don’t understand this. Anything that keeps American companies productive, increases innovation here by making room for those who earn degrees not popular with current citizens — try and find an Anglo industrial engineer — and breaks the hold corrupt lawyers have over the immigration system cannot be wrong. We need hard workers. We need that next generation that will go to college and start the companies of the future. The question Congress must answer is whether we recognize that? If not, do we begin mass deportations of the Miguel’s, Sergio’s and countless others who have helped build the United States? Let’s hope someday they get the answer right.