Immigration and the welfare state

One of the issues at the forefront of this year’s election has been immigration policy. While the very unique political stances of the candidates have been and will continue to be tested against individual values and beliefs, I am more interested in weighing the effects of immigration, particularly illegal immigration, on the U.S. Federal Budget. This piece does not intend to support or attack any ideologies, but rather attempts to explore the effects of illegal immigration on issues surrounding the federal budget.

To evaluate the effects of illegal immigration on the budget, it is first important to understand its composition. Its two largest components of the budget are Social Security and Medicare, which account for around half of all federal spending. Both of these entitlement programs are in the red for future payment obligations and, if any serious attempts at cutting deficit spending are to be made, dramatic overhauls for both of these programs will be necessary. However, there is reason to believe that without unauthorized immigrants these programs would be far more distressed than they currently are. This is because, generally, in order for unauthorized immigrants to obtain employment in the United States, many acquire fake Social Security cards. Fake Social Security numbers clock in as pure earnings in government spreadsheets because the deductions that come off of the paychecks of these unauthorized cardholders need not cover their future benefits. Why? Well, one can’t make a claim on a fake Social Security number.

The Social Security Administration has estimated that 75 percent of unauthorized immigrants are actually on formal payrolls using Social Security numbers that are fraudulent or belonging to deceased people. This implies many things: for one, unauthorized immigrants are paying payroll and income taxes; two, they are paying into programs from which they will never collect benefits on; and three, as unauthorized taxpayers they are not likely to qualify for any income credits or tax refunds. It has been estimated that without all of the payments on invalid Social Security numbers, the program would be 10 percent deeper into the hole than it is already projected to be in over the next 65 years.

Many arguments against illegal immigration cite the opportunity for unauthorized immigrants to take advantage of the relatively robust American welfare state, but, according to TIME, the literature on this topic is inconclusive and, in my opinion, exceedingly confusing when one considers that the primary demographic profiting from American benefit programs are the elderly and not the poor. Even so, most unauthorized immigrants do not qualify for food stamps, welfare payments or unemployment insurance. Truly, it seems that the value in the work of unauthorized immigrants lies in the fact that they do not qualify for all of the various benefits and entitlements normally provided to American workers.

So, essentially, there are a handful of deficit-alleviating components to illegal immigration for the U.S, though this probably wouldn’t be a fair reason to suggest its proliferation. Still, it appears that unauthorized immigrants pretty much represent the only low-income group of people contributing positively to the U.S. Federal Budget due to the fact that they do not qualify for tax returns or benefits. Even so, the argument still stands that lawful immigrants also provide many similar deficit-alleviating benefits (notably an increase in the taxpayer base), and that their dedication to lawfully entering the country is undermined by illegal immigration.

Laxer immigration policies have previously been considered as a means of ameliorating the budget because of the potential net benefits that an influx of legal immigrants might have on soon-to-be-broken government programs like Social Security and Medicare. Essentially, increased immigration would provide “an artificial generation of young adults,” as the late Ben Wattenberg of PBS once said in 1995, to pay into some of the programs currently in jeopardy. This would almost certainly improve our current situation with the rising retirement and healthcare costs of the baby boomers underway. Although there are many costs associated with immigration, it may be true that its benefits would be accentuated in today’s economy since the ratio of working to retired persons is going off kilter. Of course, this outlook assumes that our labor market is healthy enough to accommodate these workers at which point this becomes an entirely different discussion. Regardless, increases in the taxpayer base provided by immigrants are undoubtedly plusses in the government books, though the plusses might net out to a nominal sum.

The scope of the information I presented here is very limited, and is meant merely to provide information, not to draw any conclusions. The immigration question is complicated, and we cannot count on its solution to relieve our budget difficulties. There are many different policy suggestions that have considered the information presented here, and many other avenues that can be explored. It is also important to understand that there is another major economic result of immigration not directly captured in the federal budget: labor market changes. However, the immigration debate should not solely be one of assuming economics. In the midst of the refugee crises, it is difficult to consider policies through a fiscal lens when human lives might be at stake. The conditions of immigration have massive impacts on individual human lives; therefore, American immigration policy must consider implications far beyond the dollar. While the calculator is undeniably an important tool in policy formation, we must also look to the ideals of justice and liberty, historical patterns, morality, culture and the law before jumping to any conclusions.

Ajay Desai is a Trinity freshman. His column runs on alternate Tuesdays.