NJPP REPORT: Unemployment Insurance Taxes Paid by Undocumented Workers in New JerseyTop $1 Billion

NJPP REPORT: Unemployment Insurance Taxes Paid by Undocumented Workers in New JerseyTop $1 Billion
For Immediate Release

June 17, 2020 – As New Jersey faces unprecedented job loss due to the COVID-19 pandemic, hundreds of thousands of undocumented workers across the state are excluded from receiving unemployment benefits, despite paying into state and federal unemployment insurance trust funds.

Since 2010, undocumented workers in New Jersey have contributed more than $1.36 billion in unemployment insurance taxes, but have not received any unemployment relief, according to a new report by New Jersey Policy Perspective (NJPP). The report, Unemployment Insurance Taxes Paid by Undocumented Workers Top $1 Billion, outlines that approximately 344,000 undocumented workers in New Jersey contribute about $587 million in state and local taxes every year. A share of their sales, property, payroll, and income tax payments help support public services for all New Jersey residents, including programs like unemployment insurance that undocumented immigrants cannot access.

“Undocumented immigrants pay into unemployment insurance just like any other worker, the only difference is that they do not qualify for unemployment benefits when they lose their job,” said Vineeta Kapahi, Policy Analyst at New Jersey Policy Perspective and author of the report. “The reality is that immigrants need to pay for basic needs like housing, utilities, and groceries just like everyone else. There is no good policy rationale for undocumented workers to be excluded from a safety net program, let alone one they help fund. Unemployment insurance is just one of many ways that immigrants are being left behind in the nation’s response to the COVID-19 pandemic.”

The report, released on the 100 day anniversary of New Jersey’s stay at home order, highlights how immigrant households have been largely excluded from state and federal COVID-19 relief efforts, even though immigrant communities have been among the hardest hit from the pandemic. For example, federal lawmakers intentionally excluded immigrants who file their taxes using an Individual Taxpayer Identification Number (ITIN) from the $1,200 stimulus checks available through the CARES Act. As a result, 686,000 New Jersey residents, including family members of workers who are U.S. citizens, were excluded from this relief.

To ensure New Jersey has a strong and speedy recovery, the report urges state lawmakers to support immigrant communities and fill in the gaps in relief left by the federal government. Policy recommendations in the report include the creation of a new program that provides benefits similar to unemployment insurance for those who are excluded, and providing  payments comparable to the stimulus checks issued to many other Americans under the CARES Act. Efforts like this would support a stronger and more inclusive pandemic recovery that addresses, rather than contributes to, existing racial inequities.

“State lawmakers have an opportunity to step in where the federal government has fallen short,” Kapahi added. “Leaving any family behind in the state’s recovery — regardless of their immigration status — will only further the economy’s fall and slow the state’s recovery. Providing relief to New Jersey’s immigrant residents is not only the moral thing to do, but also a smart policy choice that supports the wellbeing of all New Jerseyans.”

Read the full report here.

New Jersey Policy Perspective (NJPP) is a nonpartisan think tank that drives policy change to advance economic, social, and racial justice through evidence-based, independent research, analysis, and advocacy.


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