Effect Upon The Labor Market
According to one study, the IRCA caused some employers to discriminate against workers who appeared foreign, resulting in a small reduction in overall Hispanic employment. There is no statistical evidence that a reduction in employment correlated to unemployment in the economy as a whole or was separate from the general unemployment population statistics. Another study stated that if hired, wages were being lowered to compensate employers for the perceived risk of hiring foreigners.
The hiring process also changed as employers turned to indirect hiring through subcontractors. "Under a subcontracting agreement, a U.S. citizen or resident alien contractually agrees with an employer to provide a specific number of workers for a certain period of time to undertake a defined task at a fixed rate of pay per worker". "By using a subcontractor the firm is not held liable since the workers are not employees. The use of a subcontractor decreases a worker's wages since a portion is kept by the subcontractor. This indirect hiring is imposed on everyone regardless of legality".
Read more about this topic: Immigration Reform And Control Act Of 1986
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