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11 responses so far ↓

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  redison // April 14, 2008 at 2:16 am

  Dude. I completely agree!

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  uk visa // April 14, 2008 at 10:52 am

  I’m very pleased to hear that Tom McCarthy has crafted a film covering the subject of immigration.
  The Station Agent as a first class movie and immigration is a subject we all need to think about more deeply.

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  Shawn // April 14, 2008 at 3:56 pm

  I totally disagree.

  This issue is simple…if you entered this country ILLEGALLY, you are a criminal and must go.

  It’s not complicated.

  It’s about the law.

  Living in Northern Virginia (well-known crackdown county Prince William), I have witnessed first-hand how illegals can destroy neighborhoods.

  Nonetheless, I did enjoy reading your opinion on the topic even if I disagree.

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  zeezil // April 14, 2008 at 6:11 pm

  After careful review, anyone with a even a modicum of logic can come to no other conclusion: illegal immigration must be halted, illegal immigrants here now must be deported and legal immigration needs decreased from the approximately 2 million allowed in per year currently.

  Please review the following report on the FISCAL COST OF IMMIGRATION by economist Edwin Rubenstein just released this past week:
  http://www.esrresearch.com/Rubensteinreport.pdf

  A partial summary of the report:

  The Fiscal Impact on 15 Federal Departments surveyed was: $346 billion in fiscal related costs in FY 2007.

  Each immigrant cost taxpayers more than $9,000 per year.

  An immigrant household (2 adults, 2 children) cost taxpayers $36,000 per year.

  Legal immigrants were not separated out from illegal immigrants for the fiscal impact study, but if they had been, the fiscal cost per ILLEGAL immigrant would be even more shocking than the figures quoted above.

  The most extensive and authoritative study, prior to economist Edwin Rubenstein’s “The Fiscal Impact of Immigration” (April 2008) , is the National Research Council (NRC)’s The New Americans: Economic, Demographic and Fiscal Effects of Immigration (1997).

  The NRC staff analyzed federal, state, and local government expenditures on programs such as Medicaid, AFDC (now TANF), and SSI, as well as the cost of educating immigrants’ foreign- and native-born children.

  NRC found that the average immigrant household receives $13,326 in federal annual expenditures and pays $10,664 in federal taxes—that is, they generate a fiscal deficit of $2,682 (1996 dollars)per household.

  In 2007 dollars this is a deficit of $3,408 per immigrant household.

  With 9 million households currently headed by immigrants, more than $30 billion ($3,408 x 9 million) of the federal deficit represents money transferred from native taxpayers to immigrants.

  Our national immigration policies have to work for the United States. While improving the plight of the world’s poor is a laudable goal, the finite resources we have available to fulfill that goal would be swamped if there wasn’t some orderly and manageable system in place to limit entry into the United States to what this nation can actually support. The more illegal aliens that are permitted to subvert the immigration system, the fewer immigrants we can accommodate who might actually produce a positive benefit for our country.

  The more we become a nation of illegal immigrants, the deeper we fall into anarchy.

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  zeezil // April 14, 2008 at 6:28 pm

  The High Cost of Cheap Labor
  Illegal Immigration and the Federal Budget

  Executive Summary
  ————————————————————

  This study is one of the first to estimate the total impact of illegal immigration on the federal budget. Most previous studies have focused on the state and local level and have examined only costs or tax payments, but not both. Based on Census Bureau data, this study finds that, when all taxes paid (direct and indirect) and all costs are considered, illegal households created a net fiscal deficit at the federal level of more than $10 billion in 2002. We also estimate that, if there was an amnesty for illegal aliens, the net fiscal deficit would grow to nearly $29 billion.

  Among the findings:

  Households headed by illegal aliens imposed more than $26.3 billion in costs on the federal government in 2002 and paid only $16 billion in taxes, creating a net fiscal deficit of almost $10.4 billion, or $2,700 per illegal household.

  Among the largest costs are Medicaid ($2.5 billion); treatment for the uninsured ($2.2 billion); food assistance programs such as food stamps, WIC, and free school lunches ($1.9 billion); the federal prison and court systems ($1.6 billion); and federal aid to schools ($1.4 billion).

  With nearly two-thirds of illegal aliens lacking a high school degree, the primary reason they create a fiscal deficit is their low education levels and resulting low incomes and tax payments, not their legal status or heavy use of most social services.

  On average, the costs that illegal households impose on federal coffers are less than half that of other households, but their tax payments are only one-fourth that of other households.

  Many of the costs associated with illegals are due to their American-born children, who are awarded U.S. citizenship at birth. Thus, greater efforts at barring illegals from federal programs will not reduce costs because their citizen children can continue to access them.

  If illegal aliens were given amnesty and began to pay taxes and use services like households headed by legal immigrants with the same education levels, the estimated annual net fiscal deficit would increase from $2,700 per household to nearly $7,700, for a total net cost of $29 billion.

  Costs increase dramatically because unskilled immigrants with legal status — what most illegal aliens would become — can access government programs, but still tend to make very modest tax payments.

  Although legalization would increase average tax payments by 77 percent, average costs would rise by 118 percent.

  The fact that legal immigrants with few years of schooling are a large fiscal drain does not mean that legal immigrants overall are a net drain — many legal immigrants are highly skilled.

  The vast majority of illegals hold jobs. Thus the fiscal deficit they create for the federal government is not the result of an unwillingness to work.

  The results of this study are consistent with a 1997 study by the National Research Council, which also found that immigrants’ education level is a key determinant of their fiscal impact.

  A Complex Fiscal Picture

  Welfare use. Our findings show that many of the preconceived notions about the fiscal impact of illegal households turn out to be inaccurate. In terms of welfare use, receipt of cash assistance programs tends to be very low, while Medicaid use, though significant, is still less than for other households. Only use of food assistance programs is significantly higher than that of the rest of the population. Also, contrary to the perceptions that illegal aliens don’t pay payroll taxes, we estimate that more than half of illegals work “on the books.” On average, illegal households pay more than $4,200 a year in all forms of federal taxes. Unfortunately, they impose costs of $6,950 per household.

  Social Security and Medicare. Although we find that the net effect of illegal households is negative at the federal level, the same is not true for Social Security and Medicare. We estimate that illegal households create a combined net benefit for these two programs in excess of $7 billion a year, accounting for about 4 percent of the total annual surplus in these two programs. However, they create a net deficit of $17.4 billion in the rest of the budget, for a total net loss of $10.4 billion. Nonetheless, their impact on Social Security and Medicare is unambiguously positive. Of course, if the Social Security totalization agreement with Mexico signed in June goes into effect, allowing illegals to collect Social Security, these calculations would change.

  The Impact of Amnesty. Finally, our estimates show that amnesty would significantly increase tax revenue. Because both their income and tax compliance would rise, we estimate that under the most likely scenario the average illegal alien household would pay 77 percent ($3,200) more a year in federal taxes once legalized. While not enough to offset the 118 percent ($8,200) per household increase in costs that would come with legalization, amnesty would significantly increase both the average income and tax payments of illegal aliens.

  What’s Different About Today’s Immigration. Many native-born Americans observe that their ancestors came to America and did not place great demands on government services. Perhaps this is true, but the size and scope of government were dramatically smaller during the last great wave of immigration. Not just means-tested programs, but expenditures on everything from public schools to roads were only a fraction of what they are today. Thus, the arrival of unskilled immigrants in the past did not have the negative fiscal implications that it does today. Moreover, the American economy has changed profoundly since the last great wave of immigration, with education now the key determinant of economic success. The costs that unskilled immigrants impose simply reflect the nature of the modern American economy and welfare state. It is doubtful that the fiscal costs can be avoided if our immigration policies remain unchanged.

  Policy Implications
  The negative impact on the federal budget need not be the only or even the primary consideration when deciding what to do about illegal immigration. But assuming that the fiscal status quo is unacceptable, there are three main changes in policy that might reduce or eliminate the fiscal costs of illegal immigration. One set of options is to allow illegal aliens to remain in the country, but attempt to reduce the costs they impose. A second set of options would be to grant them legal status as a way of increasing the taxes they pay. A third option would be to enforce the law and reduce the size of the illegal population and with it the costs of illegal immigration.

  Reducing the Cost Side of the Equation. Reducing the costs illegals impose would probably be the most difficult of the three options because illegal households already impose only about 46 percent as much in costs on the federal government as other households. Thus, the amount of money that can be saved by curtailing their use of public services even further is probably quite limited. Moreover, the fact that benefits are often received on behalf of their U.S.-citizen children means that it is very difficult to prevent illegal households from accessing the programs they do. And many of the programs illegals use most extensively are likely to be politically very difficult to cut, such as the Women Infants and Children (WIC) nutrition program. Other costs, such as incarcerating illegals who have been convicted of crimes are unavoidable. It seems almost certain that if illegals are allowed to remain in the country, the fiscal deficit will persist.

  Increasing Tax Revenue by Granting Amnesty. As discussed above, our research shows that granting illegal aliens amnesty would dramatically increase tax revenue. Unfortunately, we find that costs would increase even more. Costs would rise dramatically because illegals would be able to access many programs that are currently off limits to them. Moreover, even if legalized illegal aliens continued to be barred from using some means-tested programs, they would still be much more likely to sign their U.S.-citizen children up for them because they would lose whatever fear they had of the government. We know this because immigrants with legal status, who have the same education levels and resulting low incomes as illegal aliens, sign their U.S.-citizen children up for programs like Medicaid at higher rates than illegal aliens with U.S.-citizen children. In addition, direct costs for programs like the Earned Income Tax Credit would also grow dramatically with legalization. Right now, illegals need a Social Security number and have to file a tax return to get the credit. As a result, relatively few actually get it. We estimate that once legalized, payments to illegals under this program would grow more than ten-fold.

  From a purely fiscal point of view, the main problem with legalization is that illegals would, for the most part, become unskilled legal immigrants. And unskilled legal immigrants create much larger fiscal costs than unskilled illegal aliens. Legalization will not change the low education levels of illegal aliens or the fact that the American labor market offers very limited opportunities to such workers, whatever their legal status. Nor will it change the basic fact that the United States, like all industrialized democracies, has a well-developed welfare state that provides assistance to low-income workers. Large fiscal costs are simply an unavoidable outcome of unskilled immigration given the economic and fiscal realities of America today.

  Enforcing Immigration Laws. If we are serious about avoiding the fiscal costs of illegal immigration, the only real option is to enforce the law and reduce the number of illegal aliens in the country. First, this would entail much greater efforts to police the nation’s land and sea borders. At present, less than 2,000 agents are on duty at any one time on the Mexican and Canadian borders. Second, much greater effort must be made to ensure that those allowed into the country on a temporary basis, such as tourists and guest workers, are not likely to stay in the country permanently. Third, the centerpiece of any enforcement effort would be to enforce the ban on hiring illegal aliens. At present, the law is completely unenforced. Enforcement would require using existing databases to ensure that all new hires are authorized to work in the United States and levying heavy fines on businesses that knowingly employ illegal aliens. Finally, a clear message from policymakers, especially senior members of the administration, that enforcement of the law is valued and vitally important to the nation, would dramatically increase the extremely low morale of those who enforce immigration laws.

  Policing the border, enforcing the ban on hiring illegal aliens, denying temporary visas to those likely to remain permanently, and all the other things necessary to reduce illegal immigration will take time and cost money. However, since the cost of illegal immigration to the federal government alone is estimated at over $10 billion a year, significant resources could be devoted to enforcement efforts and still leave taxpayers with significant net savings. Enforcement not only has the advantage of reducing the costs of illegal immigration, it also is very popular with the general public. Nonetheless, policymakers can expect strong opposition from special interest groups, especially ethnic advocacy groups and those elements of the business community that do not want to invest in labor-saving devices and techniques or pay better salaries, but instead want access to large numbers of cheap, unskilled workers. If we choose to continue to not enforce the law or to grant illegals amnesty, both the public and policymakers have to understand that there will be significant long-term costs for taxpayers.

  Summary Methodology
  Overall Approach. To estimate the impact of households headed by illegal aliens, we rely heavily on the National Research Council’s (NRC) 1997 study, “The New Americans.” Like that study, we use the March Current Population Survey (CPS) and the decennial Census, both collected by the Census Bureau. We use the March 2003 CPS, which asks questions about income, household structure, and use of public services in the calendar year prior to the survey. We control total federal expenditures and tax receipts by category to reflect actual expenditures and tax payments. Like the NRC, we assume that immigrants have no impact on defense-related expenditures and therefore assign those costs only to native-headed households. Like the NRC, we define a household as persons living together who are related. Individuals living alone or with persons to whom they are unrelated are treated as their own households. As the NRC study points out, a “household is the primary unit through which public services are consumed and taxes paid.” Following the NRC’s example of using households, many of which include U.S.-citizen children, as the unit of analysis makes sense because the presence of these children and the costs they create are a direct result of their parents having been allowed to enter and remain in country. Thus, counting services used by these children allows for a full accounting of the costs of illegal immigration.

  Identifying Illegal Aliens in Census Bureau Data. While the CPS does not ask respondents if they are illegal aliens, the Urban Institute, the former Immigration and Naturalization Service (INS), and the Census Bureau have used socio-demographic characteristics in the data to estimate the size and characteristics of the illegal population. To identify illegal aliens in the survey, we used citizenship status, year of arrival in the United States, age, country of birth, educational attainment, sex, receipt of welfare programs, receipt of Social Security, veteran status, and marital status. This method is based on some very well-established facts about the characteristics of the illegal population. In some cases, we assume that individuals have zero chance of being an illegal alien, such as naturalized citizens, veterans, and individuals who report that they personally receive Social Security benefits or cash assistance from a welfare program or those who are enrolled in Medicaid. However, other members of a household, mainly the U.S.-born children of illegal aliens, can and do receive these programs. We estimate that there were 8.7 million illegal aliens included in the March 2003 CPS. By design, our estimates for the size and characteristics of the illegal population are very similar to those prepared by the Census Bureau, the INS, and the Urban Institute.

  Estimating the Impact of Amnesty. We assume that any amnesty that passes Congress will have Lawful Permanent Residence (LPR) as a component. Even though the President’s amnesty proposal in January seems to envision “temporary” worker status, every major legalization bill in Congress, including those sponsored by Republican legislators, provides illegal aliens with LPR status at some point in the process. Moreover, Democratic presidential nominee John Kerry has indicated his strong desire to give LPR status to illegal aliens.

  To estimate the likely impact of legalization, we run two different simulations. In our first simulation, we assume that legalized illegal aliens would use services and pay taxes like all households headed by legal immigrants with the same characteristics. In this simulation, we control for the education level of the household head and whether the head is from Mexico. The first simulation shows that the net fiscal deficit grows from about $2,700 to more than $6,000 per household. In the second simulation, we again control for education and whether the household head is Mexican and also assume that illegals would become like post-1986 legal immigrants, excluding refugees. Because illegals are much more like recently arrived non-refugees than legal immigrants in general, the second simulation is the more plausible. The second simulation shows that the net fiscal deficit per household would climb to $7,700.

  Results Similar to Other Studies. Our overall conclusion that education level is the primary determinant of tax payments made and services used is very similar to the conclusion of the 1997 National Research Council report, “The New Americans.” The results of our study also closely match the findings of a 1998 Urban Institute study, which examined tax payments by illegal aliens in New York State. In order to test our results we ran separate estimates for federal taxes and found that, when adjusted for inflation, our estimated federal taxes are almost identical to those of the Urban Institute. The results of this study are also buttressed by an analysis of illegal alien tax returns done by the Inspector General’s Office of the Department of Treasury in 2004, which found that about half of illegals had no federal income tax liability, very similar to our finding of 45 percent.

  For the entire report, see:
  http://www.cis.org/articles/2004/fiscalexec.html

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  JakeT // April 14, 2008 at 6:45 pm

  I guess a couple of your commenters missed the part where you said, “Obviously there are arguments for all sides in this debate, and simple answers will not do. But I think that the first thing we should do—especially those of us who claim Christian compassion—is to begin to look at immigrants (legal and illegal) as fellow humans.”

  I guess I’m confused, zeezil, about how your economic report addresses the humaninzing of immigrants, and how it helps us deal with the the Biblical command to care for the aliens in our land.

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  Tim Coe // April 15, 2008 at 3:35 am

  The sense that I see in the ‘we’re all immigrants’ rhetoric is as follows: Millions of Americans are in this country because their ancestors emigrated here without breaking any rules— because there used not to be any rules about immigration. From a certain perspective, the national immigration narrative is: White guys come to America, shove the native people onto the least desirable real estate, and then declare than anyone else who tries to move to this land has to go through certain complicated legal hoops, pass tests, learn a certain language, behave a certain way, etc., before this someone can be ‘one of us’— particularly if this someone is of non-European descent, because that’s quite Other.

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  Shawn // April 15, 2008 at 4:42 pm

  Jake and Tim…again, you guys are the perfect example of individuals that just don’t get it. It’s about the laws of this country NOW…the bringing up the past crap is so ridiculous. Move on. Illegal aliens are criminals - they don’t deserve to be treated with “Christian charity” or whatever crap your church is telling you. It’s simple: If you broke the law by entering this country illegally, you are a criminal and must be punished. Stop hiding behind the Bible and the “everyone is an immigrant” b.s.

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  Mark // April 15, 2008 at 5:39 pm

  Thanks Brett- great post as usual. I completely agree, Christians would do well to step back from the heated politics and emotions of the issue, and look first at the humanity of the people involved (which includes the people who perceive their jobs to be ’stolen’ and their neighborhoods ‘invaded’).

  And now I’ll tip my hand: the reason there are so many people here illegally, is because it is so difficult to get here legally. There are jobs to be done, and the market will fill those jobs. Even if we erect barriers (physical barriers or otherwise, i.e. cumbersome immigration procedures) people will find ways around them. It’s the way of the market. Simple as that.

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  Shanana // April 15, 2008 at 10:22 pm

  As an ex-pat and hopeful future-immigrant (current “migrant”), I must say I see both sides of the issue. Which also makes me all the more adamant that we must look at this issue with compassion and honesty. Do some of the laws need tightening up? Absolutely! Do some of the laws need to be relaxed? Yes! It will be something that we have to look at both biblically and as caring humans, but also as people bound under the law of government.

  Brett, thanks so much for putting this up, I look forward to catching this flick when it eventually makes it over to these shores. In the meantime, I hope that your human-centred approach brings meaningful solutions to your mind. If so, let us know, it might just be the solution we can all live with. ;)

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  Tim Coe // April 17, 2008 at 11:30 pm

  Shawn:

  It’s simple: If you broke the law by entering this country illegally, you are a criminal and must be punished.

  I doubt that anyone is disputing the legality of being an illegal alien. The argument revolves around what to do about the very real problem, and whether it suggests (as virtually everyone seems to believe) that the current system— be it enforcement of the laws or the laws themselves— is not working. Simply saying ‘They broke the law and should go to prison’ does not really address the issue.

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