OUR OWN GOVERNMENT CLEARY KNOWS WHAT THE COST OF THE MEXICAN INVASION, OCCUPATION AND EVER EXPANDING WELFARE FOR ILLEGALS SYSTEMS COSTS! THEY ALSO KNOW THAT IT IS A LIE THAT THERE ARE ONLY 12 MILLION OF THESE ILLEGALS (INCLUDING ONE MILLION MEX GANG MEMBERS). MOST NON-GOV SOURCES PUT THE NUMBER AT 38 MILLION AND BREEDING FAST.
THE BELOW WAS WRITTEN BEFORE THE CURRENT ECONOMIC MELTDOWN CAUSE BY THE BANKSTERS, MOST OF WHICH LIKE WELLS FARGO, AND BANK of AMERICA, ARE GENEROUS DONORS TO THE MEX FASCIST PARTY of LA RAZA, AND HAVE EXPLOITED ILLEGALS WITH THEIR SCAM MORTGAGE PRODUCTS AND BANK FEES TO WIRE MONEY BACK TO NARCOMEX.
EVEN WITH STAGGERING UNEMPLOYMENT, MEX WELFARE COSTS ($20 BILLION A YEAR IN CA FOR SOCIAL SERVICES TO ILLEGALS --- LOS ANGELES COUNTY PUTS OUT $600 MILLION PER YEAR IN WELFARE TO ILLEGALS)
WE ARE MEXICO’S WELFARE, “FREE” BIRTHING CENTERS, FREE EMERGENCY ROOM HEALTHCARE, JOBS AND JAILS PLAN! NO WONDER THE ILLEGALS KEEP COMING OVER OUR BORDERS AND RIGHT INTO OUR JOBS, WELFARE LINES, AND VOTING BOOTHS!
Unfettered Immigration = Poverty
By Robert Rector
Heritage.org | May 16, 2006
This paper focuses on the net fiscal effects of immigration with particular emphasis on the fiscal effects of low skill immigration. The fiscal effects of immigration are only one aspect of the impact of immigration. Immigration also has social, political, and economic effects. In particular, the economic effects of immigration have been heavily researched with differing results. These economic effects lie beyond the scope of this paper.
There are five important caveats about the NAS longitudinal study and its conclusion that in the long term the fiscal impact of immigration is positive. First, the study applies to all recent immigration, not just illegal immigration. Second, the finding that the long-term fiscal impact of immigration is positive applies to the population of immigrants as a whole, not to low-skill immigrants alone. Third, the $83,000 figure is based on the predicted earnings, tax payments, and benefits of an immigrant’s descendents over the next 300 years. Fourth, the study does not take into account the growth in out-of-wedlock childbearing among the foreign-born population, which will increase future welfare costs and limit the upward mobility of future generations. Fifth, the assumed educational attainment of the children, grandchildren, and great grandchildren of immigrants who are high school dropouts or high school graduates seems unreasonably high given the actual attainment of the offspring of recent Mexican and Hispanic immigrants.
The NAS study’s 300-year time horizon is highly problematic. Three hundred years ago, the United States did not even exist and British colonists had barely reached the Appalachian Mountains. We cannot reasonably estimate what taxes and benefits will be even 30 years from now, let alone 300.
The NAS study assumes that most people’s descendents will eventually regress to the social and economic mean, and thus may make a positive fiscal contribution, if the time horizon is long enough. With similar methods, it seems likely that out-of-wedlock childbearing could be found to have a net positive fiscal value as long as assumed future earnings are projected out 500 or 600 years.
Slight variations to NAS’s assumptions used by NAS greatly affect the projected outcomes. For example, limiting the time horizon to 50 years and raising the assumed interest rate from 3 percent to 4 percent drops the NPV of the average immigrant from around $80,000 to $8,000. Critically, the NAS projections assumed very large tax increases and benefits cuts would begin in 2016 to prevent the federal deficit from rising further relative to GDP. This assumption makes it far easier for future generations to be scored as fiscal contributors. If these large tax hikes and benefit cuts do not occur, then the long-term positive fiscal value of immigration evaporates. Moreover, if future tax hikes and benefit cuts do occur, the exact nature of those changes would likely have a large impact on the findings; this issue is not explored in the NAS study.
Critically, the estimated net fiscal impact of the whole immigrant population has little bearing on the fiscal impact of illegal immigrants, who are primarily low-skilled. As noted, at least 50 percent of illegal immigrants do not have a high school degree. As the NAS report states, “[S]ome groups of immigrants bring net fiscal benefits to natives and others impose net fiscal costs [I]mmigrants with certain characteristics, such as the elderly and those with little education, may be quite costly.”
The NAS report shows that the long-term fiscal impact of immigrants varies dramatically according to the education level of the immigrant. The fiscal impact of immigrants with some college education is positive. The fiscal impact of immigrants with a high school degree varies according to the time horizon used. The fiscal impact of immigrants without a high school degree is negative: benefits received will exceed taxes paid. The net present value of the future fiscal impact of immigrants without a high school degree is negative even when the assumed earnings and taxes of descendents over the next 300 years are included in the calculation.
A final point is that the NAS study’s estimates assume that low skill immigration does not reduce the wages of native-born low-skill workers. If low-skill immigration does, in fact, reduce the wages of native-born labor, this would reduce taxes paid and increase welfare expenditures for that group. The fiscal, social, and political implications could be quite large.
The Cost of Amnesty
Federal and state governments currently spend over $500 billion per year on means-tested welfare benefits. Illegal aliens are ineligible for most federal welfare benefits but can receive some assistance through programs such as Medicaid, In addition, native-born children of illegal immigrant parents are citizens and are eligible for all relevant federal welfare benefits.
Granting amnesty to illegal aliens would have two opposing fiscal effects. On the one hand, it may raise wages and taxes paid by broadening the labor market individuals compete in; it would also increase tax compliance and tax receipts as more work would be performed “on the books,” On the other hand, amnesty would greatly increase the receipt of welfare, government benefits, and social services. Because illegal immigrant households tend to be low-skill and low-wage, the cost to government could be considerable.
The Center for Immigration Studies (CIS) has performed a thorough study of the federal fiscal impacts of amnesty. This study found that illegal immigrant households have low education levels and low wages and currently pay little in taxes. Illegal immigrant households also receive lower levels of federal government benefits. Nonetheless, the study also found that, on average, illegal immigrant families received more in federal benefits than they paid in taxes.
Granting amnesty would render illegal immigrants eligible for federal benefit programs. The CIS study estimated the additional taxes that would be paid and the additional government costs that would occur as a result of amnesty. It assumed that welfare utilization and tax payment among current illegal immigrants would rise to equal the levels among legally-admitted immigrants of similar national, educational, and demographic backgrounds. If all illegal immigrants were granted amnesty, federal tax payments would increase by some $3,000 per household, but federal benefits and social services would increase by $8,000 per household. Total federal welfare benefits would reach around $9,500 per household, or $35 billion per year total. The study estimates that the net cost to the federal government of granting amnesty to some 3.8 million illegal alien households would be around $5,000 per household, for a total federal fiscal cost of $19 billion per year.
Amnesty and the Hagel/Martinez Bill
Senators Mel Martinez (R-FL) and Chuck Hagel (R-NE) have proposed a compromise immigration plan to offer amnesty and citizenship to current illegal aliens (S.2611). This plan would offer amnesty and citizenship to between 60 and 85 percent of the nation’s current 11.9 million illegal immigrants.
Under the plan, illegal immigrants who have been in the U.S. five years or more (60 percent of the total) would be granted immediate amnesty. Illegal immigrants who have been in the country between two and five years (25 percent of the total) would travel to one of 16 “ports of entry” where they would receive work permits that would bestow permanent residence and allow the bearers to become citizens. Overall, the plan is likely to grant citizenship to 85 percent of the current illegal alien population, or some 9 to 10 million individuals.
As noted, illegal aliens in the U.S. have very low education levels: at least half lack a high school education and a third have less than a ninth grade education. Illegal immigrants earn low wages similar to the wages of other low-skill workers in the economy. This means they are prone to poverty and welfare dependence.
Illegal immigrants are currently ineligible for most federal welfare benefits. Granting citizenship would provide eligibility to welfare programs such as the Earned Income Credit, Food Stamps, Medicaid, and Temporary Assistance to Needy Families. This would greatly increase welfare costs. The added government costs can be estimated by assessing government benefits and tax payments among current illegal immigrants compared to government benefits and tax payments among legal immigrants of similar national and educational backgrounds. This comparison shows that granting citizenship to 85 percent of current illegal immigrants would increase net federal fiscal costs by some $16 billion per year. Granting citizenship to 60 percent of current illegal immigrants would increase welfare costs by some $11.4 billion per year.
These costs would not occur immediately. The Hagel/Martinez plan imposes a prospective six-year waiting period prior to granting legal permanent residence to illegal immigrants. Individuals would wait another five years after receiving permanent residence before becoming citizens. Thus, much of the cost of the plan might be delayed; however, once millions of individuals are put on the path to citizenship there would be enormous (and probably irresistible) political pressure to grant them the same benefits that are available to the general population quickly, rather than enforce a long delay.
In addition, the cost estimates presented above are based on a static analysis that assumes that amnesty will not alter behavior. In reality, illegal immigrants are likely to have significantly more children once they are permanently settled in the U.S. These children will increase welfare costs and child poverty further.
Family Chain Migration
The impact and cost of the Hagel/Martinez amendment would extend well beyond the ten million or so individuals initially granted amnesty. When an individual is granted citizenship, he is given the unrestricted right to bring his spouse, minor children, and parents into the country. Each of these individuals would have the right to become a citizen after he or she has lived in the country five years. Thus, each individual granted amnesty under the Hagel/Martinez bill could bring five or more additional immigrants, all of whom could become citizens.
As noted, many of the individuals who would be granted amnesty under the amendment have families abroad. Illegal immigrants granted permanent residence would have the immediate right to bring spouses and minor children into the country. Once here, the spouses and children would receive government services and have the right to become citizens. The total number of foreign-born persons who would ultimately be granted citizenship under Hagel/Martinez could be far more than 10 million, and if so, government costs would swell far above the $16 billion figure given above.
But the fiscal problem gets worse; when an illegal immigrant has obtained citizenship through the amnesty process, he or she would have the right to bring his or her parents in the U.S. as permanent lawful residents. (Currently one-tenth of the annual flow of legal immigrants to the U.S. are parents of recent immigrants who have naturalized.) If ten million current illegal immigrants were granted amnesty and citizenship under Hagel/Martinez, as many as twenty million foreign born parents would be given the right to immigrate to the U.S. Once in the U.S., the immigrant parents would receive social services and government funded medical care, much of it paid for through the Medicaid disproportionate share program.
These immigrant parents coming to the U.S. would also be eligible to apply for citizenship themselves. On attaining citizenship, most would become eligible for benefits from the Supplemental Security Income (SSI) and Medicaid programs, at an average cost of over $18,000 per person per year. While it is true that the language requirements of the citizenship test would serve as a barrier to immigrant parents becoming citizens, the tests are not very difficult and the financial rewards of citizenship would be very great. If only ten percent of the parents of those receiving amnesty under Hagel/Martinez became citizens and enrolled in SSI and Medicaid, the extra costs to government would be over $30 billion per year.
Obviously, these costs would not begin for some time, but the long-term potential of amnesty to raise government spending is quite real.
While no one can predict how many spouses, children, and parents of the beneficiaries of amnesty would enter the country, the pool of those who could enter is enormous, and the potential long-term government costs would be staggering.
Granting Amnesty is Likely to Further Increase Illegal Immigration
The Immigration Reform and Control Act (IRCA) of 1986 granted amnesty to 2.7 million illegal aliens. The primary purpose of the act was to decrease the number of illegal immigrants by limiting their inflow and by legalizing the status of illegal immigrants already here. In fact, the act did nothing to stem the tide of illegal entry. The number of illegal aliens entering the country increased five fold from around 140,000 per year in the 1980s to 700,000 per year today.
Illegal entries increased dramatically shortly after IRCA went into effect. It seems plausible that the prospect of future amnesty and citizenship served as a magnet to draw even more illegal immigrants into the country. After all, if the nation granted amnesty once why wouldn’t it do so again?
The Hagel/Martinez legislation would repeat IRCA on a much larger scale. This time, nine to ten million illegal immigrants would be granted amnesty. As with IRCA, the bill promises to reduce future illegal entry but contains little policy that would actually accomplish this. The granting of amnesty to 10 million illegal immigrants is likely to serve as a magnet pulling even greater numbers of aliens into the country in the future.
If enacted, the legislation would spur further increases in the future flow of low-skill migrants. This in turn would increase poverty in America, enlarge the welfare state, and increase social and political tensions.
Permanent “Guest Worker” Program
Finally, the Hagel/Martinez bill would issue 325,000 new visas per year to “guest workers.” The number of visas available could increase by 20 percent annually, reaching two million per year within ten years. By 2017, the guest worker program would have admitted some eight million new workers. Illegal aliens who have been in the country for less than two years would be eligible to become guest workers and would probably be the primary recipients of these supposedly temporary (H2C) visas. Recipients of these visas could bring spouses and children into the country immediately, increasing the number of entrants over ten years well above eight million. Because nearly all of the guest workers and their families would within a few years become eligible for government welfare and other services, the fiscal costs from the program could rival those stemming from the direct amnesty provisions of the bill.
On the surface, individuals in the guest worker program would be limited to a six-year stay in the U.S. But they would have the option to convert to legal permanent residence (LPR) after four years. This would make them permanent residents with the right to naturalize. In addition, all children born to guest workers would automatically become U.S. citizens. This would make it very unlikely that the parent would ever be forced to leave the country.
As structured, the Hagel/Martinez guest worker program could, within a decade, double the inflow of legal permanent immigrants into the U.S. Many or most of these immigrants would be low-skill and would thus impose fiscal costs on U.S. taxpayers. It is true that while many employers would benefit from additional low-skill laborers; however, if such laborers are granted citizenship and permanent residence, their employment is likely to generate negative externalities that impose costs on the rest of society. A guest worker program that, in fact, provides permanent residence and citizenship would not be beneficial to the nation’s finances.
Immigration to the U.S. is a privilege, not a right. Immigrants should be net contributors to the government and society and should not be a fiscal burden on the native-born. While highly educated immigrants, on average, make positive fiscal contributions, the overall fiscal impact of low-skill immigrants is negative.
Over the last 20 years, around 10 million individuals without a high school degree have entered the United States. Many of these also have a high probability of out-of-wedlock childbearing, a key predictor of poverty and welfare dependence. Unless U.S. immigration policy is changed, these trends are likely to continue. Granting amnesty to current illegal immigrants exacerbates the problem.
Sound immigration policy should be based on two principles. The first is respect for the rule of law. American citizens should determine who is allowed to enter the country, to become a citizen, and to vote in our elections. Lax border enforcement and the non-enforcement of laws against employing illegal immigrants have encouraged over 10 million individuals to enter the country unlawfully. Past and pending amnesties reward this behavior. Under the current system, decisions about who will live in the U.S. and who will become a citizen tend to be made unilaterally by foreigners. Hagel/Martinez would further undermine the rule of law and put the U.S. on the path of uncontrolled immigration punctuated by recurring amnesties.
Second, recognizing the fact that low-skill immigrants are likely to be a fiscal burden on society, government should increase the average skill and education levels of incoming immigrants. Currently, the average skill level of immigrants is significantly reduced by two factors: largely uncontrolled border crossings and the high priority on kinship ties in the issuance of permanent residence visas. Only 7.6 percent of individuals granted visas for permanent entry into the U.S. are selected on the basis of their educational attainment and skills. To the increase the skill levels of future immigrants, the U.S. should stop the inflow of illegal immigrants, reduce the number of family reunification visas, and increase the number of employment- and skill-based visas.
Five specific policies follow from these principles:
1. The influx of illegal immigrants should be stopped by rigorous border security programs and strong programs to prevent employers from employing illegals.
2. Amnesty and citizenship should not be given to current illegal immigrants. Amnesty has negative fiscal consequences and is manifestly unfair to those who have waited for years to enter the country lawfully. Amnesty would also serve as a magnet, drawing even more future illegal immigration.
3. Any guest worker program should grant temporary, not permanent, residence and should not be a pathway to citizenship. A guest worker program should not disproportionately swell the ranks of low-skill workers.
4. Children born to parents who are illegal immigrants or to future guest workers should not be given citizenship status. Granting citizenship automatically confers welfare eligibility and makes it unlikely the parent will ever leave the U.S.
5. The legal immigration system grants lawful permanent residence to some 950,000 persons each year. This system should be altered to substantially increase the proportion of new entrants with high levels of education and skills in demand by U.S. firms. Under current law, foreign-born parents and siblings of naturalized citizens are given preference for entry visas. The current visa allotments for family members (other than spouses and minor children) should be eliminated, and quotas for employment- and skill-based entry increased proportionately.