How do you know that your proposal would make the economy more unfriendly to Hispanics? Each time a business hires a citizen or legal immigrant, document fraud imposes a probability that you actually hire an illegal immigrant. If you raise the cost of accidentally hiring an illegal immigrant, you raise the cost of trying to hire a legal worker who looks similar to a population that stereotypically contains illegal immigrants.

Would that have an impact on the behavior of a rational business? Let's do some math, admitting that this is kinda a Fermi problem.

So if you are running a limited-service restaurant that employs poor people, and you have an employee working a 40-hr workweek at 7.35/hr, their yearly pay is $15,288. On top of that, you have an additional 15.3% ($2,329.88) [1] to pay for the employer's portion of social security and Medicare tax, $420 for unemployment tax[2], and employer portion of federal income taxes[3] of 10% on the first $11.525 ($922.50) and $15 on the rest ($555.45). And payroll for that employee costs $19,455.83. For a limited service restaurant, payroll overall costs 25%-30%[4] of gross revenue. So (making the unjustified simplifying assumption that revenue comes from employees roughly proportional to their payroll costs.) for each such employee, the business makes $64,852.78-$77,823.34 in net revenue per employee. Or, $45,396.94-$58,367.50 in revenue per employee after payroll but before other cost (goods, equipment, utilities, rent, etc) which we will all assume are fixed. So, if a business is risk-neutral, all costs other than labor don't effect decision-making, and we don't account for the possibility of going out of business then your policy is a bad idea if the probability of accidentally hiring an illegal immigrant and getting caught is 4.54%-5.84%.

What is the probability of hiring an illegal immigrant if a business hires someone who, to them, looks Hispanic?

If there are 11 million[5] illegal immigrants in the US. Let's say 7.35 million[6] of them are Hispanic/Latino in appearance (I'm talking about racial discrimination here, so the diversity of Hispanic peoples gets reduced to one question: Does a business owner think they "look Hispanic"?). One source[7], whose neutrality I doubt, claims that 75% of illegal immigrants have forged documents like social security cards. It would make sense that they would want to obtain documents that allow them to work, so lets assume that's true. So than means 5.5 million Hispanic people with forged documents. There are 55 million[8] Hispanic people living in the U.S. That means that 10% of them are people with forged employment documents. Accounting for the fact that illegal immigrants are more likely to be in the low-income workforce than Hispanic citizens, it's probably higher.

What is the probability of getting caught? I'm on a phone and too tired to continue this calculation and I'm on my phone. But if it was 0.45-0.58, then it would be prohibitively expensive for a risk-neutral rational business whose only cost was labor to hire someone who looked Hispanic. That sounds to like economic conditions that are unfavorable to poor Hispanic people.

Of course, you could fix this by adding a Mens Rea component to your proposal.

[1] https://www.irs.gov/pub/irs-pdf/p15.pdf, page 31

[2] ibid, page 35

[3] ibid, page 46

[4] http://smallbusiness.chron.com/percentage-should-restaurant-...

[5] http://www.pewresearch.org/fact-tank/2015/07/24/5-facts-abou...

[6] ibid: 5.9 million from Mexico; pulled out of my ass: 1.45 million from elsewhere in Central America, South America, and the Caribbean. I'm fudging the fact that there are black people and white people from those regions. Better numbers welcomed.

[7] I doubt it's neutrality but it does make sense that illegal immigrants would want forged documents. How hard it is to counterfeit? I don't know. http://cis.org/IdentityTheft

[8] http://www.pewresearch.org/fact-tank/2015/06/25/u-s-hispanic...