STATEMENT
of the
Honorable Nydia M. Velázquez, Chairwoman
House Committee on Small Business
Hearing on Immigration Policies Impacting the Small Business Workforce
May 10, 2007

Our economy faces many obstacles in fostering small business growth, but one of the forgotten challenges has been the economic affects of our broken immigration system.  Whether it is a visa system that doesn’t meet industry needs, or a verification system that is unworkable, the failures of our current immigration policies are weighing down our nation’s 26 million small businesses.

As we will hear today, immigration plays an enormous role in providing that necessary workforce.  U.S. small business owners are responsible for employing many of the million immigrants to fill their workforce needs.  And yes, some of these 37 million workers are undocumented – many of them unbeknownst to their employers. 

These documented and undocumented workers can be found in nearly every sector of the economy.  It is clear their services are needed but with the current system, it is hindering entrepreneurs’ ability to grow and is creating enormous paperwork burdens.

As job creation increases at a pace faster than our workforce, small businesses will require even more immigrants to continue to innovate and develop their companies.  In the coming decades, worker shortages are expected to grow across the economy and impact sectors that are vital to the health of our society.  

The businesses that produce and harvest our food already rely heavily on millions of immigrants.  There is a critical sector that is here only temporarily to fill seasonal needs during harvest time and others that are part of a permanent workforce.

In the high-tech industry, H1-B visas provide a pipeline for needed highly-skilled workers.  However, demand for these visas routinely outstrip the limited supply.  For proof of this shortage, one only has to consider that the application cap for H1-B visas was reached this year in only the first few hours of the process. 

The current visa system is clearly not accommodating the needs of small businesses.  Visa programs are not only failing to direct enough workers to the right industries, they have also become so bureaucratic that small firms cannot compete with larger businesses for those employees.  Large firms are better equipped to navigate the complicated systems that ask companies to predict their staffing needs months in advance and to pay high compliance costs and fees.  

For some industries, it is clear that a temporary workforce is an inadequate solution to their labor shortage. Those sectors, such as the construction and health sectors, that need additional permanent workers to be successful must also be part of the discussion.  Small construction companies rely heavily on immigrant labor to meet the demand for their services, but the industry still faces an inadequate labor supply. 

Although entrepreneurs share national concerns about the weaknesses of our immigration system, they cannot be its primary policing mechanism. Small businesses don’t have the resources, the technology, or frankly, the responsibility to be that first line of defense.

Instead, we need a sensible employment verification system.  It must not place an undue regulatory or financial burden on them.  Nor can it create so much uncertainty that small firms will chose not to participate and therefore not expand.  Unfortunately, under this broken system, many small companies know they are up against competitors who are breaking the rules.

As the broader immigration debate continues, small businesses must have a seat at the table because they face unique workforce challenges and make enormous contributions to the economy.  Small companies need reforms to take into account the rate at which they are growing and will address their needs for short- and long-term employees. 

Entrepreneurs are ready to work with a fair and accessible system. I look forward to hearing from the witnesses before us today about what we can do as the debate over comprehensive immigration reform moves forward.  We must ensure that willing workers are matched with the employers who need them to expand their businesses, develop their communities, and create even more jobs.