Immigration's Price Tag

National Review Online: Illegal Immigrants Cost Americans Billions Each Year And Don't Make It Up

(National Review Online)  This column was written by Byron York.

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When George W. Bush visited the U.S. Border Patrol's Yuma Station Headquarters in Arizona on Monday — for the second time in a year — his message on illegal immigration sounded a bit tougher than in the past. "Illegal immigration is a serious problem — you know it better than anybody," he told a group of border agents. "It puts pressure on the public schools and the hospitals, not only here in our border states, but states around the country. It drains the state and local budgets … Incarceration of criminals who are here illegally strains the Arizona budget. But there's a lot of other ways it strains the local and state budgets. It brings crime to our communities."

The president touted his get-tough-on-the-border policies, enacted under pressure from the then-Republican Congress, and singled out Operation Jump Start, under which National Guard troops assist border agents. But he also stressed the need for "comprehensive" reform — and when he did, his message sounded like the George W. Bush of old. "Past efforts at reform failed to address the underlying economic reasons behind illegal immigration," the president said. "People are coming here to put food on the table, and they're doing jobs Americans are not doing."

With those words, the president was revisiting the great question in the debate over illegal immigration: Is the presence of illegal immigrants, mostly from Mexico, a boon to the U.S. economy, or a drag? It's a question that has long divided Bush supporters; the Wall Street Journal editorial page tells us that a lenient immigration policy is absolutely vital for American prosperity, while enforcement-first advocates tell us a strict policy is the only thing that will ensure continued economic health.

Both have plenty of statistics to cite to make their case. But now a scholar at the Heritage Foundation, Robert Rector, has found a new and revealing way to get at the answer.

Rector has just published a study, "The Fiscal Cost of Low-Skill Households to the U.S. Taxpayer," that is ostensibly not about immigration at all. He takes the most detailed look yet at the economics of the 17.7 million American households made up of people without a high-school degree. With numbers from the Census Bureau, the Congressional Research Service, the Bureau of Labor Statistics, and other government agencies, Rector found what they make, what they spend, and how much they receive in government services.

The reason Rector chose to look at low-skilled workers is that it is estimated that nearly two-thirds of illegal immigrants fall into that category. (By way of comparison, slightly less than 10 percent of native-born Americans are in that group.) By focusing on those workers, Rector was able to make use of information on them that is more detailed and precise than information on immigrants as a whole. And any conclusions he reached would be applicable to a large majority of illegal immigrants who are already in this country as well as those who would come here under various immigration reform proposals.

Rector began by calculating the dollar value of the benefits those low-skill workers receive from the government. There are direct benefits, like Medicare and Social Security, and means-tested benefits, like food, housing and medical benefits specifically for low-income people. Then there is public education, along with population-based services like police and fire protection, parks, and roads. (Those services benefit everyone, and their cost usually increases as the population increases.) After that, there is interest on the public debts, a burden spread throughout all income groups, and the cost of what Rector calls "pure public goods" — national defense, scientific research, and a few other areas — which benefit everyone but do not necessarily rise in cost as the population rises.

Rector found that in 2004, the most recent year for which figures are available, low-skill households received an average of $32,138 per household — the great majority in the form of means-tested aid and direct benefits. (Rector excluded from that figure the cost of public goods and interest; with those included, he says, each low-skill household receives an average of $43,084.) Against that, Rector found that low-skill households paid an average of $9,689 in taxes. (The biggest chunk of that was the Social Security tax — $2,509 — followed by state and local taxes, consumption taxes, property taxes, and federal income taxes, but Rector counted everything, including highway levies and lottery purchases.) In the final calculation, he found, the average low-skill household received $22,449 more in benefits than it paid in taxes — the $32,138 in benefits, excluding public goods, minus the $9,689 in taxes.

Taking that $22,449, and multiplying it by the 17.7 million low-skill households, Rector found that the total deficit for such households was $397 billion in 2004. "Over the next ten years the total cost of low-skill households to the taxpayer (immediate benefits minus taxes paid) is likely to be at least $3.9 trillion," Rector writes. "This number would go up significantly if changes in immigration policy lead to substantial increases in the number of low-skill immigrants entering the country and receiving services."

From a purely money perspective, it's a powerful argument. At a cost of $22,449 per household per year — well, multiply that by an adult lifespan of 50 years and you have an average lifetime cost to the taxpayer of $1.1 million per unskilled worker. Increase that population with a wave of unskilled immigrants, and you’re talking a lot of money.

There's probably room for argument on Rector's exact numbers. Jeffrey Passell, a senior research associate at the Pew Hispanic Center, questions whether some of Rector's cost estimates might be too high. For example, the arrival of new illegal immigrations will likely not raise the cost of defending the country, he says, so perhaps future immigrants will not be quite as expensive as Rector claims. (Rector tried to address that issue by excluding the cost of pure public goods in the $22,449 figure.) Still, Passell does not question the basic premise of Rector's report. "One of the purposes of our government is to provide support for people on the low end," says Passell. "Of course there is a bit more spending on households on the lower end than on the high end, and of course the low-income households don't pay as much as the high-income households. That's not surprising."

The bigger argument over Rector's approach is whether illegal immigrants bring economic benefits that outweigh their undisputed costs. Tamar Jacoby, an advocate of comprehensive reform who is a senior fellow at the Manhattan Institute, points to a study done recently of immigrants in North Carolina which estimated that in the past 10 years, Hispanic immigrants had cost the state $61 million in benefits while being responsible for more than $9 billion in economic growth. "Yes, the individual might cost more in services," says Jacoby, "but they are growing the pie so significantly that that cost pales in comparison."

Not so, says Rector. "The problem is, the growth to the pie that they make, they eat," he explains. The economic growth reflected in the numbers, he says, is what the immigrant workers are making. "To the extent that they make the pie grow any bit more than what they take out of the pie in wages, it is very subtle, and it would be a tiny fraction of the gross domestic product growth," Rector says.

And that means something for the immigration debate, and for George W. Bush's proposals. "Every one of these [reform] bills envisions bringing in millions and millions of additional low-skill immigrants with the right to access welfare and become citizens," says Rector. "Within 10 years, you would have four million of these individuals, each of whom can bring family. You'd be looking at a cost of $80 billion per year." Perhaps Congress and the president will decide to do that. But if Robert Rector is correct, no one should underestimate the cost.

[carwatt]

http://www.drdsk.com/articles.html#Illegals

"The Dark Side of Illegal Immigration: Nearly One Million Sex Crimes Committed by Illegal Immigrants in the United States!!

[carwatt]

Illegals = Swine Flu

[gkc99]

Ever notice how many of our soldiers in Iraq are Hispanic? You tighty whitey righties ought to get a grip with your anti-mexican rants. You are KKK.

[u88rcf]

I am for securing the border but I believe that the only way out of this is to have comprehensive immigration reform.

[nativewoman]

Even if all of the Rector-estimated 2/3 of low-skilled workers who are illegal immigrants were sent back to whence they came, what to do with the 1/3 that would be left?

Per the Rector study, the 1/3 left would be low-skilled United States citizens. Does this study have a proposal to get rid of them also?

This NRO article seems to be looking for justifications for not allowing the low-skilled to exist.

United States employers are overjoyed with paying substandard wages and will continue to do so as long as they can get away with it. Employers drive the wages down by exploiting the underclass in general. Yet, rarely, is an employer punished for hiring illegal immigrants.

The government and the public are also complicit in the exploitation of workers because of the low-priced goods it allows while swelling the coffers of large corporations.

Of course, I realize that much of the public can only afford the artificially low-priced goods because they live on subsistence wages.

The rich get richer and the poor get poorer and now some would deny even the right to exist to those who are poor. But the rich need the slave class in order to maintain the rich class.

Same as it ever was.

[jpesot]

As a dem, the immigration debate is interesting to watch, particularly the way it splits republicans.

On the one extreme, you have the corporate/biz focused replublicans who LOVE the low wages they can pay these poor folks without benefits.

On the other extreme, you have the zenophobic republicans who don't like "foriegners" coming to this country, period, let alone illegally, because they partake of medical benefits denied to them by their employers.

Its the battle between these two extremes within the replublican party that prevents any meaningful movement on this issue.

Basically they don't want them to stay, but they don't want them to leave either.

The only real option is more comprehensive immigration reform, not just fences and deportation.

For the "law and order" republicans who will shout "No Amnesty for illegals". We're still waiting to hear you yell "No Amnesty for Scooter!!" I'm not holding my breath.

[theusa1st]

The democrat's in the senate just voted to give illegals social security benefits. The pricks don't care if our social security payments get cut or dry up...they'll have their bloated federal pensions. Time for term limits and time to secure our borders.

[ramos937]

There are so many fatal flaws with Rector's logic that it is hard to begin. Let's list the basic ones:
1. Rector never worked with raw primary data. To have done that, he would have had to work with the primary subject - the illegal immigrant. How can you study a subject without subjecting the subject to a through analysis?
2. The illegal immigrant, as a general rule, does not partake of benefits normally accorded to a citizen. For him to do that would put him/her at risk. That they do try to avoid.
3. The Social Security Administration confirms that it is holding over $300B in undisbursed benefits that are directly traced to illegal immigrants. These are used by the federal government in various ways.
4. Many illegal immigrants, in addition to FICA also pay withholding taxes. They never file for refunds for the same reason in Item 1 above.

Rector never did consider these items in his study. He would not know an illegal immigrant if he passed one on the street. Therefore it is false.

[durendal55]

To the person who thinks deporting Illegal Immigrants will rise food prices so high that Big Macs will be $10 and Apples $2 consider the following: Farm Labor makes up 7% of food prices; Total Labor makes up 57% of all prices; there are more unemployed U.S. Citizens and Legal Residents (8.1 million not counting teens looking for seasonal work) than there are working Illegal Immigrants (6.3 million) if you believe U.S. Government Statistics; Farm Labor has more Illegal Immigrants than any other occupation and the rate is only 25% if you believe the Pew Hispanic Center. Even if we have to give triple the wages we currently give to Illegal Immigrants to replace them with U.S. Citizens food prices would only go up by about 9%.

[prcdr]

Sorry but ALL ILLEGALS break the law, hence the term ILLEGAL. Quit making excuses for them. They are criminals plain and simple.

They may have good motives, but that does not make them any less guilty.

[cbslogin12]

ILLEGAL immigrants are breaking our laws and should not be rewarded in any way. It is ridiculous that money is being given to non citizens when we have Americans who are in great need. How dare illegals protest that they should be given anything when they are breaking our laws. I am sick of hearing that they only do so in order to feed their families. American citizens who break the law to feed their families go to jail everyday. Only those who obey our laws are welcome.

[clemenhagen1]

It amuses me how the right-wing approaches this problem: brand the illegals as criminals and other such low-life elements and make political hay off of all the venomous anger. The truth in controlling the flow of illegal workers lies, just as with the drug war, in cutting off demand. To wit: go after the employers. Of course you will not hear very many Republicans talk about going after the corporate job base. Too many profits to cover for. If you really want to address this issue start fining and jailing the repeat offenders. You telling me these employers do not know the people whom they hire? Cease and desist with the zenophobic rage and take on the real issue. Demand that the employers quit hiring illegals, make them pay for doing so, and continue to support reasonable minimum wage laws and other such fair wage practices so that low-skill Americans will have an incentive to fill these jobs.

[kgo54]

I live in Tucson Arizona and we've been getting shafted for years now, paying for everything, healthcare, schools, etc, for illegals. Now were down to one trama center left in the city since the rest have gone bankrupt caring for illegals. The boder patrol takes injured illegals to emergency care centers, but don't arrest them after chases, that usually end up as rollovers and the taxpayers or hospitals end up paying for it when it should be paid for by our government, for their failed policies. By not arresting them until they recover, our government feels that its not there responisibility to pay for the cost of the heath care, they made possible, they leave it up to the local people to foot the bill. The only one benefitting from illegal immigration is the sleazy businesses that hire them at depressed wages, lining their pockets, but costing every American in the end. I'm personally, fed up with the whole mess.

[dmedina6]

the truth of the matter is yes some illegals do break the laws... but they work weather picking your trash or serving your meals at most restaurants...... but thats more than i can say about others ethnic backgrounds. some of whom dont want to work or even take advantage of the schools and education they have had to get ahead...... i work among diffrent people with diffrent back grounds, but when i come accross an african american who has some type of education and was born here and all they talk about is how to screw the government out of more money finding ways to get drugs with link cards and are in and out of jail having children with diffrent fathers to uptain more welfare lying to recieve housing...... not ALL hispanics cost the us money some leave money here for instance those who dont do their income tax where does that money go when its not claimed? most companies do take or remove their dues when they get their checks right? look at the state of colorado farmers are upset that the crops are going to waste because no one wants to harvest the crops.... governments solution ? to get inmates to do the job... well what about those us citizens that are on welfare that claim they cant find work?..... before we go out and judge others maybe we should look back and wonder what our own race is doing to get by without working or to recieve help at my expence.

[durendal55]

Let's examine the quote "The bigger argument over Rector's approach is whether illegal immigrants bring economic benefits that outweigh their undisputed costs." If every Illegal Immigrant expands the economy what does that really mean? Per economic data published by the U.S. Government at the end of 2005 all workers in American earned a cumulative $7.3 trillion in income. This in turn generated $3.2 trillion in non-salary earnings or about a 44% economic activity add-on. Since there were 143 million workers, that means that the average wage was $51,000 per year. This then created additional non-payroll income of $22,440. What this means is that if the average working Illegal Immigrant earned the same wage as the average U.S. Citizen, all the economic benefit created by the Illegal Immigrant is used up by the social costs of the Illegal Immigrant listed in the article ($22,449). In reality, most Illegal Immigrants earn significantly below the average wage, and additionally, send a sizeable portion of their wages outside the country. So even if you bring in economic benefit, illegal immigration costs the U.S. more that it benefits the U.S.

[bill1fj]

It seems like most all the politicians we have now just talk.
Lets put an end to all this illegal immigration mess once and for all.
Fine any person or business $1000 per day, or part of day, per illegal that they hire.
No exceptions, no excuses.
I realize it will take time for bigger businesses to check out their workers. So lets give them until June 1, and then after that date start the fines.
Offer a 10% reward to anyone that turns in employers hiring illegals.
No jobs - Then the illegals will quit coming.
Require State and local police to help the feds with the capture and deportation of present illegals.
There are a variety of creative solutions to this problem.
If the current politicians don't take care of the mess vote against them in the next round of elections.
Thank You

[frankinaz]

There are also illegal immigration costs that are not factored in: People in the Southwest and other parts of the country that have to share the roads with illegal immigrants, many of whom obtain a car and drive (legally or illegally), with a large number of them uninsured-I know firsthand: My car was hit in California by a drunk illegal immigrant who made an unlawful lane change and totaled out my vehicle. That man had a driver's license from Mexico that was no good, and no insurance. Although he was arrested for DUI, his buddies paid his bail and he left the country.

[cheyenne16-2009]

This study comes a lot closer than some of the biased "studies" touted by the racist "la raza", illegal alien supporters.
It just doesn't go far enough.
Illegal aliens cost us in more ways than this study covers.
When illegal aliens take jobs in the U.S., they take jobs away from predominantly low income blacks and low income hispanics, a large percentage of which do not have H.S. diplomas. Those two sectors (low income blacks and hispanics) have a high percentage of children per household, and are eligible for welfare.
As a result more U.S. citizens are forced into welfare, and the price tag of that needs to be added to the cost of illegal immigration.