The Hidden Costs of Illegal Elbonian Cash Employment. By Thomas Cole JD, Charts and Graphs by Charles Cole

Many people think illegal Elbonians taking American jobs is no big deal. We don’t want to pick crops or do manual work or other such jobs as the rationale for this view. But the truth is, shunting these jobs to illegals for cash really costs our state a lot of money. Not only do illegal Elbonian immigrants cost society in welfare, schools, housing and government services while they are living here. Cash payments for illegal employment deprive our nation of the necessary taxes and services that the rest of us working people have to make up for.

Summary

Illegal aliens are being paid cash by American employers estimated at over $700b/year and this also costs Americans in lost taxes, FICA, SSI, workers comp support...$400b per year. The total fraud is over a trillion per year, every year. That's a thousand billions.

MIT/Yale Study: 

This MIT study is on the real numbers of illegals in the US as of 2016. It came out in 2018 and was of course roundly criticized by mainstream and government outlets because MIT’s numbers were twice what the Census Bureau predicted. And when you add in the last ten years from 2016- 2026.. well, try adding another 15 million to the figure.

That means MIT is talking about 38 million illegals in the USA. Shall we argue with MIT now?  This author will accept their numbers over any government, NGO or church group numbers.

“The MIT study estimated the undocumented immigrant population in 2016 to be 22.1 million (mean estimate), nearly double the commonly cited estimate of 11.3 million from Pew Research Center, which relies on survey data like the American Community Survey (ACS)” GroK

“The 2018 study’s high estimate (22.1 million) challenges the establishment narrative (Pew’s 11.3 million) by modeling inflows/outflows rather than relying on surveys, which may miss undocumented immigrants due to distrust or nonresponse (e.g., 2020 Census PES undercounts). Its academic rigor (published in PLOS ONE) lends credibility, but critics like CIS argue it overstates the population due to assumptions about inflows. The study’s 2016 focus limits its applicability to 2025, but it remains a landmark for questioning survey-based estimates”Grok

This study “applied demographic principles, using data on legal admissions, deportations, and population changes from the Department of Homeland Security (DHS) and ACS.” Thus MIT was using real numbers from independent government agencies like DHS.

And they “simulated parameter ranges to account for undercounts and uncertainties, producing a probability distribution for the population estimate.”

  This is a better approach then the Census Bureau’s antiquated,  Please fill out our form approach. 

“The (MIT) approach differed from survey-based methods (e.g., Pew, ACS) by modeling inflows and outflows directly, aiming to capture populations missed by surveys due to underreporting or nonresponse.”Grok

So this is what we’re talking about here. Illegals will naturally not fill out forms. The government knows it and hides the errors. Most can’t read or write in the first place, and are not going to turn themselves in. To get honest numbers we cannot rely on the biased DEI census people, but instead look to outside unbiased studies by absolute professional data scientists like MIT and USC. As usual we are finding the government incompetent, politically biased and irascible.

CA Employment Taxes 

For instance if we run the employment numbers for California taxes and other employment expenses we get the picture. It costs a lot to employ a person in CA and maybe that’s why so many employers choose to pay cash. And that means employers will pay cash to illegal aliens who do not want government scrutiny.

Say we have a guy working at a pot farm in Camarillo making $15/hr. Maybe he’s an illegal guy, maybe not. He takes home $600 a week, $2,400 a month and has two months off so $24,000/ year. Barely enough to live on in coastal CA. But that’s not our point.

Citizens and Local Government Committing Felonies

Our point is the employer is paying cash and calling it expenses and not calling it employment on his tax forms to the state and IRS. And thus saving himself approximately 39% in employment expenses, on the backs of America's workers and legal employers who must make up the difference by paying all their employment taxes. So these local employers are willing to commit tax fraud, a felony, to avoid a 40% hit to their bottom line. And these employers are American citizens as in the recent Camarillo pot farm raids, where the local pot farm farm owners were white, US citizens, an ex-cop and big democrat donors. 

Employers Willing to Commit Felonies

These employers are the Americans willing to risk felonies to protect their income. And now, as seen on national media the local city councils and even (some) county supervisors (and not Bob Nelson) in Santa Barbara County, (site of the recent pot farm raids) are supporting the pushback against legal ICE raids. Even authorizing government payments of our tax dollars to local NGOs to aid the illegal Elbonians to evade ICE raids. The Feds found and arrested over 350 illegal elbonian employees including 14 unaccompanied children. These children working in the fields bring up the ugly spector of child slave labor in the USA.

Raid was Authorized With a Federal Warrant.

It's worth noting that in this raid, ICE went in a few days before asking for access and the farm denied them access without a warrant. So ICE brought evidence of cash payments to illegals, (The owner Glenn Farrar openly admits to this in a previous glowing magazine article about the farm) And there was evidence of illegal child employment, illegal alien employment, employment of criminal aliens and even employment of known cartel afiliats to a Federal judge who issued the warrant.

This is a $300 million dollar operation and is possibly the largest pot farm in the nation. It is also interesting to note that the county where this raid occurred worked tirelessly to set up pot farms all over the county. Even placing Glass House pot farms adjacent public schools and million dollar beach cities like Carpinteria. The county was supposed to receive 4% of all pot sales and yet somehow the county has only gotten $6million in taxes so far from all county pot farms. If this pot farm the Glass House and their five or more pot stores throughout the county are now worth $300 million, as the owner claims, then why haven't they paid the county at least $12 million in sales taxes? We have suggested the county impanel grand juries and thoroughly investigate this multi million dollars tax discrepancy. Any other person or business would be up their eyeballs in tax fraud investigations, but not Glass House, who gives heartly to a certain political parties coffers, the same party that controls county government and it's legal systems. Very interesting.

Government Officials Stand With Child Traffickers 

And yet some local governments, newspapers and elected officials are valiantly protecting the child slave employers from ICE, protecting the cartel supervisors at the farm from ICE, and are standing up for the employers as 'good citizens' . Local newspapers like The Santa Barbara Independent, Noozhalk and the SLO Tribune are all onboard with stopping all ICE raids, and supporting the illegal cartel affiliated workers at local pot farms. Even local congressman Salud Carbajal  (CACD24) was filmed pushing his way, unidentified, into the line of armed agents at this pot farm bust. And the congressman then doxed several agents and that resulted in more rocks being thrown and even guns being fired by ‘protestors’ at Federal agents. This open rebellion is reminiscent of the 1850’s pre-war, democrat south, where federal agents were regularly attacked by pro slavery, southern democrat forces. Local mayors and state assemblyman Gregg Hart also made statements in support of blocking the federal raids on illegal employees at local pot farms. 

Finally - The Numbers - Chart 1 (These numbers correspond to Chart #1)

And so back to these employers who are avoiding employment expenses by paying cash to illegals.  The list of these many employment taxes and safety net items is; 

1. State taxes on employees for that amount of income is 4%, 

2. Medicare is 3%, 

3. Federal tax is 12%, 

4. FICA is 15.5%, 

5. SSI is 6.2%, and 

6. Workers comp for farm workers can be 30% of wages.  Workers compensation is a required expense that employers must pay every quarter and big employers must pay every few weeks. For roofing, the workers compensation insurance cost is 100% of wages, or more. General construction is 35% of wages so it doesn’t take much to double wage costs, and the employer must pay all this expense. It’s a write off of course but still, that is your profits going straight out the door. Believe me, I’ve been there. 

7. Totals in taxes and fees unpaid - The total of these employment expenses is 66% on top of wages, so it’s no wonder employers pay cash to avoid them. When you add these losses up, California is losing $84.5b  a year in lawful employment fees every year. This is on estimated California cash wages of $130b per year.   Just to reiterate how we got these numbers. We took 10 million illegals in CA, took half of those to be working for cash 40 hours a week at $15/hr + $600/wk for 43.3  weeks a year (10 Months) comes to  = $600 X 43.3 X 5,000,000 =   $130b per year in cash illegal cash employment. And that’s just California. If we extrapolate to the national level. Here we made the assumption that the nation has 50 million illegal Elbonians and that is 5X the CA level. So we show a likely national level of illegal cash employment that came to about $650 billion in cash payments nationwide. With a loss of $396.5b to employment taxes and health and safety payments, SSI, FICA..

8. Cash Wages - State and National.  Using our methods we estimate there are $130b in cash wages being paid in California and $649b nationwide. Sure this money goes into our US economy to some extent, but much of it also goes to Elbonia as remittances and so is a drain on the US economy.

9. Total Illegal Wages-Taxes - Here we just show what the cash employment payments and the lost fees are combined. $214b in CA and a cool trillion nationally. These numbers represent approximately 10% of the legal CA economy. And we are only counting half the illegals in California (5 million instead of the 10 million that are here.) And just 25 million nationally instead of the actual 50 million that are here. It is likely these numbers are under-reporting the illegal cash employment economy.

10. Combined Legal Wages and Salaries 2021.   According to Grok the national - 'Total Taxable Wages and Salaries: The most recent comprehensive data from the IRS for individual income tax returns is for 2021, where taxpayers reported $10.9 trillion in wages, salaries, tips, etc. on 153.6 million tax returns, out of a total adjusted gross income (AGI) of $14.7 trillion… And in CA from Grok - Total Taxable Wages and Salaries: Specific data for California’s total taxable wages and salaries in 2024 is not directly available in the provided sources. However, California’s economy represents about 14–15% of the U.S. GDP, and its labor force is roughly proportional. Using the national estimate of $12.0–$12.5 trillion in taxable wages and salaries, California’s share would be approximately $1.8–$1.9 trillion in taxable wages and salaries for 2024.'

11. This estimate aligns with California’s high wage base, driven by industries like technology, healthcare, and finance, and its population of approximately 39 million (about 12% of the U.S. population).' - Grok

12. Summary The illegal cash economy in California is about 11% of the legal reported economy. And nationally the illegal cash payment economy is about 9.45%. So California leads the nation in illegal cash employment by 2.55%. At least we in CA are ahead in one category.

    

Conclusion

So by paying cash to workers the pot-farmer-employer in Camarillo CA can in this case avoid approximately 65.5% of additional ‘costs’ of employment by paying cash.

So the pot-farmer gets to pay the worker only $24,000 cash a year, and saves paying all these other tax and safety expenses adding up to an extra $15,648 per year in savings to the farmer. The combined cost to legally employ this same worker would be $39,648. With $15,648 going to support government services, medical care, SSI, FICA, the works.

In CA there are an estimated 10 million illegals living and presumably working somewhere. Let's say half of them are working under the table so that’s five million people making $24,000 a year and employers avoiding paying that extra $15,648 per employer. Now take that savings to pot farmers, which is a loss to taxes, health care, everything, and multiply it times five million.   The equation is: 5m X $15,648 = $78b. Yes, that's over $78b of lost worker support money in CA.

Per District Loss

Want to know what the tax loss on cash wages is in our county/district? Start with CA cash wages of $130b and a resultant tax loss of $78b, then divide by 52 districts = $1.5b dollars lost in employment taxes, workers comp, SSI, FICA..per district. That's on $2.5b in cash wage estimates paid in our district. You get the picture. Total amount of employment fraud in SAnta Barbara District CA CD24 is $4b per year.

That money is supposed to support working citizens in all the things taxes and workers comp and SSI and FICA support. Instead farmer employers are getting cheap labor and the actual citizen worker is getting short changed twice. First he is not hired and second his safety net is being underfunded and then abused by non citizens, when they abscond with social services to stay here, work, live, raise families, use medical services, jails, hospitals, schools etc. 

Shifting Party Platforms

It's worth noting the left used to stand for ‘The workers of America’ while the conservatives employed the workers of America. Now, with our manufacturing hollowed out by China with the help of congress and the big NYC banks, there are few blue collar jobs left. And so employers are skimping on these low skilled employees, basically imported slave labor, and not paying any of the safety net expenses that are required by law. This hurts our society and in particular the underclasses that depend on our social safety net programs like Social Security, Workers Compensation, and various income tax funded help programs. 

It’s Probably Worse - Commentary

If we consider the whole of the United States and count just half the illegals here, that would be 50m/2 =  25 million times that same loss amount = 25m X $15,648 = 391.2 billion a year in losses to our government safety nets, losses to workers comp. The number of working illegals is likely more than 50%. And these illegal alien workers are certainly not a benefit to America because they take American jobs, they don’t pay taxes, they don’t believe in America and they take up a great deal of our welfare. When combined, this loss to the added expenses of schools, welfare, hospitals, police, section-8 and other housing problems from overcrowding caused by illegal Elbonians, well, it really adds up. That cash employment tax loss of $391b could go a long way towards ameliorating America's many deficits and social problems. And sure there would be added cost to employing people and employers might have to raise their prices some. But that’s America. We have over a trillion dollars in employment fraud, probably more. 

 THOMAS COLE JD - RECOMMENDATIONS

Solutions - Recommendations - Constitutional Evaluations

1. E-verify would be an easy solution so employers could instantly verify American citizens for employment. Make e-verify function. Put intelligent people in charge if it. Do not hide SS forms in a cave with no digital access to records as is the current practice.

2. Repeal the Immigration and Nationality Act of 1965, often referred to as the Hart-Celler Act, which 'opened the floodgates to unlimited and unvetted immigration'.

3. Return to and implementation of a new Merit Based Immigration system. We want useful, productive, educated people, not just any criminal released by a third world rat hole.

4. That also means banning NAZI's, banning Muslims, banning criminals, terrorists, banning communists, divients, and any other groups whose basic worldviews are at violent political or moral odds with our nation's Judeo/Christian heritage.

5. Rationale: People and nations who practice a so called faith that proscribes death to gays and trans, stoning to women, burkas and discrimination for girls and women, death to Israel or death to the USA... have no place or need in the USA. We should have similar immigration policies as Israel, and why not? We need to protect the USA - not invite endless troublemakers in to be supported.

6. Eliminate Asylum based immigration. If your home nation is trying to kill you, too bad. Run for office and make it better.

7. Eliminate Family Reunification Immigration. If you want to reunite, move back to Somalia for instance.

8. Initiate a complete SCOTUS review and evaluation of the 14th amendment as to the illegality of anchor baby immigration. And the review and evaluate the definition of "Under the aledgence of a foreign nation" from the 14th.

9. Bring back the ‘Bracerro’ program where foreign nationals came and worked for six months. And have them live at the farms or factories where they are working. Make it easy for farms and other seasonal employers to get legal labor. 

10. Fine employers with two years back taxes, workers comp, SSI , FICA for every illegal they hired.

11. Eliminate welfare benefits to illegal immigrants. Deport them.