eh, what about a nice
FIRE???
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What Does
Illegal Immigration Cost?
National Review : April 10 , 2007 -- by Byron York
| "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..." |
| When
George W. Bush visited the U.S. Border Patrol's Yuma
Station Headquarters in Arizona 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 budgetsÂ…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." |
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| 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."
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| 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. |
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| 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. |
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| 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. |
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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 ten 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.
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| 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. |
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| 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. |
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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."
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| 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.
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| 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." |
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| 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 ten 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." |
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| 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.
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| 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 ten 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 be underestimate the cost.
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