Immigration costs far outweigh labors, new Heritage study discovers
Low-skilled legal immigrants and illegal aliens in the U.S. are receiving much more in federal social welfare benefits than they pay in taxes at a net cost of $89 billion a year to American taxpayers, according to a Heritage Foundation study.
A cost-benefit analysis by the conservative think tank of the immigration reform bill being debated in the Senate — which it said would grant what many consider amnesty to illegal aliens and increase the flow of lowskilled workers into the U.S. — warned that if the legislation becomes law, it would result in “the largest expansion of the welfare state in 30 years.”
“Such proposals would increase poverty in the U.S. in the short and long term and dramatically increase the burden on U.S. taxpayers,” said Robert E. Rector, senior research fellow for welfare at Heritage and the co-author of the study with Christine Kim.
Mr. Rector’s findings and conclusions were sharply disputed by another conservative think tank, the Cato Institute, which said that some of his cost estimates were “grossly exaggerated” and that low-skilled workers, especially Hispanics with a strong work ethic, contributed to the U.S. economy’s overall growth and prosperity.
Daniel Griswold, director of Cato’s Center for Trade Policy Studies, acknowledged that lower-skilled workers on average “consume more in government services than they pay in taxes.” But he pointed to several studies that showed their work in many low-skill industries, from agriculture to constr uction, also helped expand state economies.
“The right policy response to the fiscal concerns about immigration is not to artificially suppress labor migration but to control and reallocate government spending,” Mr. Griswold said in a recent paper.
Mr. Rector amassed a significant amount of data drawn from the U.S. census surveys that he said showed how a wave of poorly educated, low-income immigrants and illegals were imposing increasing costs on the country through 60 means-tested aid programs, from welfare to food stamps for immigrant families with children born in this country.
“Each year, roughly 1.5 million legal and illegal immigrants enter and take up residence in the U.S. This immigrant flow is disproportionately poorly educated because illegal immigration primarily attracts low-skill workers and the legal immigration system favors kinship ties over skill levels,” he said.
According to Heritage, the nation has 4.5 million low-skilled immigrant households containing 15.9 million people, or about 5 percent of the population. About 60 percent of these households were headed by legal immigrants and 40 percent by illegals, the study said.
Contrary to a belief among many Americans that low-skilled, low-paid immigrants do not pay any taxes, Mr. Rector said, “These families are rarely idle; they consistently work and pay taxes.”
But the taxes they pay seldom cover the costs of the substantial benefits they receive, he said.
In fiscal 2004, “the average low-skill immigrant household received $30,160 in direct benefits, means-test benefits, education and population-based services from all levels of government,” he said. In return, however, these households on av- erage paid only $10,573 in taxes that year.
Mr. Rector said the solution is to “reduce the costs of low-skill immigration to the taxpayers” by enforcing laws against employing illegal aliens, making a guestworker program “truly temporary and not a gateway to welfare entitlements,” ending birthright citizenship for children of illegal aliens and ruling out any amnesty in the immigration reform bill.
Several government and freemarket think tank studies assembled by Mr. Griswold at the Cato Institute paint a different picture of the impact of lowskilled immigrants in the U.S. economy.
“Several state-level studies have found that the increased economic activity created by lower-skilled, mostly Hispanic immigrants far exceeds the costs to state and local governments,” Mr. Griswold wrote.