Why employers may not know whether a new hire is undocumented

Summary

Marketplace Morning Report – July 22, 2025

Hosted by David Brancaccio

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1. Housing Market Stagnation Amid High Mortgage Rates

The episode begins with an update on the U.S. housing market. Treasury Secretary Scott Besant recently stated that lower interest rates from the Federal Reserve would "unlock the mortgage market," potentially revitalizing home buying and selling activities (01:01). However, contrary to expectations, mortgage rates have remained steady, with the average 30-year fixed rate at 6.75%, mirroring last year's figures (01:48).

Selma Hepp, Chief Economist at Totality, attributes the stagnant rates to several factors, including persistent inflation and a robust economy that has resisted rate cuts (02:02). Additionally, new initiatives by the current administration have played a role in maintaining higher rates.

Despite the overall sluggishness, there are regional pockets of improvement. Hepp notes that states like Florida and Texas have experienced some price relief due to increased housing inventory (02:12). Nevertheless, Robert Dietz, Chief Economist at the National Association of Home Builders, expresses pessimism, highlighting that sentiment among home builders has been in negative territory for 15 consecutive months (02:36). He suggests that prospective homebuyers may need to adjust their expectations or anticipate longer wait times, predicting that mortgage rates may gradually decrease to around 6% over the next two to three years (02:50).

2. Universal Music Group Eyes U.S. Stock Exchange Listing

Transitioning from the housing sector, the report delves into the corporate world with Nancy Marshall Genzer discussing Universal Music Group’s (UMG) recent move to list shares on a U.S. stock exchange (03:26). UMG, the world's largest music corporation, has a storied history, evolving through several ownership changes—from Matsushita to Seagram, and eventually merging with Vivendi. Currently, Chinese conglomerate Tencent holds a roughly 20% stake, alongside investments from American hedge fund manager Bill Ackman's Pershing Square Capital.

UMG has already been listed on the Euronext Exchange in Amsterdam and is now submitting a proposal to the Securities and Exchange Commission (SEC) to expand its trading to the U.S. market. Genzer highlights the uncertainty surrounding the number of shares to be offered and their pricing, emphasizing that the offering is pending SEC approval (04:30).

3. Employment Verification Challenges: Undocumented Workers Amid Changing Policies

The focal point of this episode centers on the complexities employers face in verifying the legal work status of new hires, a topic of increasing relevance due to recent policy shifts.

David Brancaccio introduces the issue by explaining that employers are legally mandated to verify new employees' eligibility to work in the U.S. through the I-9 form and the E-Verify system (05:25). Historically, employers conducted this verification once during the hiring process, assuming that work authorization remained constant. However, the landscape has changed significantly.

Under the Trump administration, numerous work authorizations for immigrants from countries like Haiti, Cuba, and Venezuela were rescinded, leaving many without legal permission to work despite previous statuses (06:01). This sudden revocation has affected not only recent immigrants but also individuals who have been part of the U.S. workforce for decades.

Madeline Zavodny, an economics professor at the University of North Florida, underscores the unpredictability employers now face, stating, "What their employers are going to do, I have no idea" regarding employees who may lose their authorization (06:23).

In response to these changes, the Department of Homeland Security (DHS) issued new guidelines this summer, urging employers to recheck the work status of employees from affected groups using E-Verify (06:36). Glenn Wasserstein, Managing Partner at an immigration law group in D.C., criticizes this directive, noting that it imposes a significant additional burden on employers. He points out a conflict with existing agreements that restrict employers to initial status checks during hiring, highlighting that "it is unclear because the two seem not to match" (07:25).

Emily Dickens, Head of Government Affairs at the Society for Human Resource Management, echoes these concerns, emphasizing the need for "clear, consistent and compliance-oriented guidance" from DHS (07:43). Efforts to obtain clarity from DHS have so far been unsuccessful.

Adding to the challenges, Alex Neurasta, Vice President at the Cato Institute, comments on the ineffectiveness of E-Verify, stating that "The evidence overwhelmingly shows that E-Verify approves most workers who are unauthorized to work in the United States" (08:07). He explains that the system is easily circumvented through fraudulent documents and that employers often lack the incentive to thoroughly verify authenticity during the hiring rush.

Supporting this view, a Cato report from a few years prior revealed that E-Verify flagged fewer than 1 in 6 unauthorized workers, underscoring its limited efficacy in preventing undocumented employment (08:35).

4. Conclusion

David Brancaccio wraps up the episode by highlighting the broader implications of these employment verification challenges, particularly for public media funding. With the elimination of federal funding, local public radio stations face financial strains that could impact their ability to broadcast vital programs like Marketplace. He urges listeners to support their local stations and donate directly to Marketplace to sustain essential journalism (08:47).

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This episode of the Marketplace Morning Report provides a comprehensive overview of the current economic climate, touching upon persistent challenges in the housing market, significant corporate developments with Universal Music Group, and the intricate issues surrounding employment verification in the wake of shifting immigration policies. Through expert insights and detailed analysis, listeners gain a nuanced understanding of how these factors interplay to shape the business and economic landscape.

Transcript

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[David Brancaccio]

Why employers may not know if a new hire is undocumented or documented I'm David Brancaccio in Los Angeles. Good morning to you. First, treasury Secretary Scott Besant said yesterday lower interest rates from the Fed would, quote, unlock the mortgage market. That also means the market for buying and selling homes. Tomorrow we'll hear about sales of used houses and apartments. Sales figures on new ones come the day after. Things have been sluggish. Marketplace's Kristen Schwab reports. Spring and summer of 2025 were supposed to mark the beginning of the housing market comeback. Selma Hepp, chief economist at Totality, says that was dependent on one important factor.

[Selma Hepp]

You know, economists have been saying for the last couple of years, you know, mortgage rates are going to get lower, mortgage tickets are going to get lower.

[David Brancaccio]

But they haven't gone down. The average 30 year fixed is 6.75%, which is about where it was this time last year. And then it's probably not budging anytime soon because, well, there's a whole list of reasons why.

[Selma Hepp]

Persistent inflation, you know, pretty strong economy given how much rates have gone up. You know, some of the new initiatives by the current administration.

[David Brancaccio]

But there are some regional bright spots. There's been some price relief in Florida and Texas, where inventory is up. In general, though, Robert Dietz, chief economist at the national association of Home Builders, says sentiment among home builders is down. That has been in negative territory now for 15 straight months between hesitant homebuilders and the high cost of borrowing. Dietz says people who have been waiting to enter the market may need to wait longer or adjust their expectations. The current rate environment is likely to be the new normal. He thinks longer term mortgage rates will move closer to 6% over the next two or three years. I'm Kristen Schwab for Marketplace. There's a difference between the White House trying to call the shots on interest rate policy versus reforming the way the guardians of interest rates at the Fed make decisions. That discussion will be in the Marketplace morning podcast feed later this morning. If you miss it on the air, Universal Music Group, World's biggest, is one step closer to selling shares on a US Stock exchange. It's now filed a proposal at the securities and Exchange Commission. This icon of American music has had overseas headquarters for years. Marketplace's Nancy Marshall Genzer has that.

[Nancy Marshall Genzer]

Universal Music Group helped launch the careers of Taylor Swift and Lady Gaga. Its history goes Back to the 1960s, when Music Corporation of America bought Decca Records. That company was purchased by the Japanese electronics company Matsushita, which then sold it to the Canadian liquor conglomerate Seagram's. Seagram renamed it Universal Music Group. Eventually, Seagram merged with Vivendi, a French utility group. Since then, the Chinese company Tencent has acquired about a 20% share of Universal. American hedge fund manager Bill Ackman's Pershing Square Capital also has a stake. Universal shares are already listed on the Euronext exchange in Amsterdam. The company is based in the Netherlands. It's not clear how many Universal shares will be offered in the US or how much they'll cost. The offering is subject to review by the sec. I'm Nancy Marshall Genser for Marketplace.

[Kimberly Adams]

Foreign.

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[David Brancaccio]

This Marketplace podcast is supported by Mercury. Mercury offers banking and financial software to help businesses send money, create invoices, pay bills and more all in one place. Learn [e-mail] to get a job, your employer is required by law to get you to fill out a form the old i9 as you show that you have a legal right to work in the US and since the mid-1990s employers are using an online system to verify this, but that system has problems. Market Marketplace's senior Washington correspondent Kimberly Adams reports.

[Kimberly Adams]

The system's called E Verify. And until recently, employers would just check a new hire's document when they first came on board because once people had work authorization, for the most part they kept it. But the Trump administration has been canceling the work authorizations for hundreds of thousands of immigrants from Haiti, Cuba, Venezuela and several other countries.

[Madeline Zavodny]

People who have had temporary protected status who have had that revoked. So large groups of relatively recent immigrants.

[Kimberly Adams]

Madeline Zavodny is an economics professor at the University of North Florida.

[Madeline Zavodny]

But in some cases, people who have been here for decades as well have suddenly lost their legal rights to work and live in the United States. So what their employers are going to do, I have no idea.

[Kimberly Adams]

The Department of Homeland Security issued new guidance this summer encouraging employers using E Verify recheck employees from these groups. Glenn Wasserstein is managing partner of Immigration law group in D.C. they're placing a new burden on the employers that they have to keep checking the E Verify for their current employees to make sure that their status hasn't been changed within the system, which isn't something that was done prior to now. It's also a problem, according to Wasserstein and other experts, because the agreement that employers sign when they agree to use E Verify says they can only check employees work status when they're first hired.

[Nancy Marshall Genzer]

It is unclear because the two seem not to match.

[Kimberly Adams]

Emily Dickens is the head of government affairs at the Society for Human Resource Management. She says it's also not clear if these rechecks are a requirement or just an option. Her group sent a letter to DHS trying to get clarity.

[Nancy Marshall Genzer]

So we've got to hear from them what they are going to scrutinize, what are the things that they're looking for. And so we need clear, consistent and compliance oriented guidance for them.

[Kimberly Adams]

We reached out to DHS for comment as well and didn't hear back. But even if businesses do get that clarity and keep using E Verify, it's not particularly reliable.

[Alex Neurasta]

The evidence overwhelmingly shows that E Verify approves most workers who are unauthorized to work in the United States.

[Kimberly Adams]

Alex Neurasta is a vice president at the Cato Institute. He says it's easy for folks to present documents that aren't theirs and employers often don't have an incentive to look too close when they want to make a quick hire.

[Alex Neurasta]

It is not an effective means to weed out unauthorized immigrant workers from the labor force.

[Kimberly Adams]

A Cato report from a couple of years back found that E Verify flagged fewer than 1 in 6 unauthorized workers. In Washington, I'm Kimberly Adams for Marketplace.

[David Brancaccio]

And in Los Angeles, I'm David Brancaccio. It's the Marketplace Morning Report from apm, American Public Media. Yeah, federal funding for public media was just eliminated. And without federal funds, local public radio stations across the country will struggle to acquire and broadcast Marketplace. That has a big impact on our bottom line. So we're turning to you at this critical time. Individual donations are so important right now. Give to your local station, and if you can, please donate directly to Marketplace. Go to Marketplace. Org. Donate and thank you.