US Labor Dept's Cruel Policy Punishes Immigrant Workers Who Pay Billions

The U.S. Department of Labor’s latest directive, issued by Secretary Lori Chavez-DeRemer, doubles down on a troubling stance: blocking undocumented immigrants from accessing unemployment insurance. In a letter to governors, Chavez-DeRemer insists states use the Department of Homeland Security’s SAVE database to verify immigration status, threatening to cut federal funding for those who don’t comply. This move isn’t just bureaucratic muscle-flexing; it’s a deliberate choice to exclude millions of workers who fuel our economy from a safety net they help fund. For a nation built on immigrant labor, this feels like a betrayal of our values.

At its core, this policy assumes undocumented workers are a drain, not a driver, of prosperity. Yet these workers—roughly 5% of the U.S. labor force—pay billions in payroll taxes, including into unemployment insurance funds they’re barred from accessing. When job loss hits, they’re left with nothing, despite their contributions. This isn’t fairness; it’s a system rigged to exploit. The directive’s timing, amid economic uncertainty, makes its cruelty even starker, targeting vulnerable families who are already struggling to stay afloat.

Advocates for workers’ rights see this as more than a policy misstep. It’s a continuation of decades-long efforts to scapegoat immigrants for economic woes while ignoring their essential role. From harvesting crops to cleaning homes, undocumented workers keep industries running. Denying them benefits doesn’t just harm them; it destabilizes communities and undermines the economic recovery we all depend on. The human cost is real: children go hungry, rents go unpaid, and local businesses lose customers.

What’s worse, the directive cloaks itself in the language of fiscal responsibility and legality. But enforcing such exclusionary measures through systems like SAVE, while technically precise, ignores the broader moral and economic fallout. It’s a policy that prioritizes punishment over progress, and it’s time to call it what it is: a failure of compassion and common sense.

Let’s talk numbers. Undocumented immigrants contribute about $79 billion annually to the U.S. economy, including $27 billion in federal and state taxes. A chunk of that goes to unemployment insurance trust funds—money they’ll never see returned. When these workers are laid off, often through no fault of their own, they can’t access the benefits that could stabilize their households. This isn’t just unfair; it’s economically shortsighted. Families without income cut spending, hurting local businesses and slowing recovery.

Historical evidence backs this up. The 1996 welfare reforms, which barred many legal immigrants from benefits, led to spikes in poverty and food insecurity among immigrant families. One in four U.S. children has an immigrant parent, and policies like these ripple outward, increasing hunger and health disparities. Studies show that restricting benefits doesn’t save money in the long run—it raises costs for local health systems and schools as families spiral into crisis. The Department of Labor’s directive risks repeating these mistakes, prioritizing short-term optics over long-term stability.

Contrast this with state-level experiments that prove a better way. New York’s Fund for Excluded Workers, launched in 2021, provided up to $15,600 to workers ineligible for federal unemployment aid. California and Colorado followed with similar programs, offering weekly payments to undocumented workers. These initiatives didn’t just help families pay bills; they boosted local economies by keeping money circulating. Workers could buy groceries, pay rent, and support small businesses. The results were clear: inclusion strengthens communities, while exclusion weakens them.

Opponents argue that extending benefits to undocumented workers encourages illegal immigration. But this ignores reality. Most undocumented immigrants come for work, not handouts, and they’re already here, embedded in our economy. Denying them benefits doesn’t deter migration; it just ensures more suffering and less economic resilience. The Department’s focus on verification systems like SAVE, while framed as protecting taxpayer dollars, sidesteps the bigger truth: these workers are taxpayers, too.

Beyond economics, there’s a moral dimension. Undocumented workers aren’t faceless statistics; they’re people who risk everything to build better lives. They’re the farmworkers who feed us, the caregivers who tend to our elderly, the construction workers who build our homes. Barring them from unemployment insurance when disaster strikes isn’t just unjust—it’s a denial of their humanity. Policies like Chavez-DeRemer’s directive send a message: your labor is welcome, but your survival is not.

Some argue that strict enforcement of immigration laws, including benefit restrictions, upholds the rule of law. But laws aren’t sacred just because they exist. They must serve justice, and this one doesn’t. It punishes workers for a broken immigration system they didn’t create, while letting employers who profit from their labor off the hook. True reform would pair benefit access with a pathway to citizenship, recognizing the dignity and contributions of all workers. Until then, state-funded excluded worker funds are a vital stopgap, and the federal government should take note.

The Department’s reliance on SAVE and threats to cut funding also raise practical concerns. Verification systems, while improved, aren’t flawless. Eligible citizens and legal immigrants have faced delays or wrongful denials due to bureaucratic errors. Tightening these systems risks further harm, especially for mixed-status families who fear engaging with government programs. The result? More kids without healthcare, more families without food. This isn’t efficiency; it’s exclusion by design.

The Department of Labor’s directive is a step backward, but it’s not the final word. States can resist by expanding their own excluded worker funds, as New York and California have done, to support all workers who contribute to their economies. These programs aren’t charity; they’re investments in stability and fairness. At the federal level, advocates for workers’ rights must push for immigration reform that includes access to social insurance for all who pay into it. Anything less is a betrayal of the American promise.

We stand at a crossroads. One path leads to division, poverty, and weakened communities; the other to inclusion, resilience, and shared prosperity. By rejecting policies that exclude and embracing those that uplift, we can build an economy that works for everyone. The choice is ours, and the time to act is now.