Wednesday, May 03, 2006

Illegal Immigrants: A Cost-Benefit Analysis

Think that those who come to the US illegally are draining social services and adding nothing to our society? Think again:

...immigrants aren't flocking to the United States to mooch off the government. According to a study by the Urban Institute, the 1996 welfare reform effort dramatically reduced the use of welfare by undocumented immigrant households, exactly as intended. And another vital thing happened in 1996: the Internal Revenue Service began issuing identification numbers to enable illegal immigrants who don't have Social Security numbers to file taxes.

One might have imagined that those fearing deportation or confronting the prospect of paying for their safety net through their own meager wages would take a pass on the IRS' scheme. Not so. Close to 8 million of the 12 million or so illegal aliens in the country today file personal income taxes using these numbers, contributing billions to federal coffers. No doubt they hope that this will one day help them acquire legal status — a plaintive expression of their desire to play by the rules and come out of the shadows.

So these so-called leeches are actually contributing to America in a very American way, filing personal income taxes.

They are also helping us with our Social Security and Medicare programs as well as provide income for states and cities:

What's more, aliens who are not self-employed have Social Security and Medicare taxes automatically withheld from their paychecks. Since undocumented workers have only fake numbers, they'll never be able to collect the benefits these taxes are meant to pay for. Last year, the revenues from these fake numbers — that the Social Security administration stashes in the “earnings suspense file” — added up to 10 percent of the Social Security surplus. The file is growing, on average, by more than $50 billion a year.

Beyond federal taxes, all illegals automatically pay state sales taxes that contribute toward the upkeep of public facilities such as roads that they use, and property taxes through their rent that contribute toward the schooling of their children. The non-partisan National Research Council found that when the taxes paid by the children of low-skilled immigrant families — most of whom are illegal — are factored in, they contribute on average $80,000 more to federal coffers than they consume.

So, who is theleech here? The immigrants or Americans who are taking their income to pay for government services we don't want them to use?

Something to think about.


W. Clough said...

The question of how much or little illegal immigrants contribute to me misses the point. The primary issue, at least from my perspective, is respect for and enforcement of the law. First, if you can't enforce the borders, debate on whether to allow immigration or not is purely academic. For this reason, if nothing else in the post 9/11 world, we need to get a handle on illegal border crossings. At that point, we can properly assess the contribution, etc., provided by these people. Another issue raised by this form of unregulated immigration is why has it been tolerated up until now. I believe it is because it serves a larger and entirely unstated agenda - to negatively impact wage rates. We are repeatedly told that we need this cheap labor, and that we need free trade to complete in the global economy. These catch phrases, labels, mostly obscure the reality we face as a nation. If you allow unregulated inflows of "cheap" labor, you place immense pressure on workers to accept lower and lower wages and benefits. The message is: accept what you get or we will give someone else your job. Likewise, "free trade" carries the same message, and the government has and continues to tolerate obvious subsidization of overseas labor, especially in China which keeps its monetary valuation artificially low. We need to have a rational discussion of the effect of illegal immigration on our middle class. I am of the belief that if we continue on our present course, that the middle class will continue to shrink, and ultimately collapse. If that happens, no matter how cheap the goods, the people who used to be able to afford them won't be able to afford them anymore. When that happens, as it must under current circumstances, we will face the collapse of not only our economy, but our society in general. I don't believe this is fear mongering - although for some it might have that effect. The reality is, however, that the economic pressures on the middle class are not sustainable if we want to maintain our economy and society.

Kirkrrt said...

Thank you for that side of the issue that has been totally missed in the MSM.
I have to say that I agree with W Clough's concern. There is a depressing effect on wages and illegal's do give employers the power to treat everyone poorly. "Take what I give you or I will find someone who will."
It isn't that citizens won't do some jobs, it is that our lifestyles don't afford people the luxury of taking a minimum wage job. They have to look for a job or two that pays more in order to drive a car, pay rent, and feed the kids. The problem with wage depression is that A LOT of jobs are stuck close to minimum wage due to the abundance of illegals who will do them for less.
One of the reasons illegal labor is so cheap is because they have no financial obligations other than their immediate needs and their families back home.

So to me this is another coin that has two sides. I don't know if it is a net good or a net bad. I just have a feeling that it shouldn't be the way it is.