Given Representative Luis Gutierrez’s recent pontifications over the Obama Administration’s “failure” to grant an illegal immigration amnesty, I thought we’d discuss the economics of immigration. Since we seem to have, as indicated by my recent “brief” on the national debt, more than a few outstanding liabilities related to Social Security and Medicare, I thought we’d discuss how immigration affects these two programs.
Many proponents of an illegal immigration amnesty claim that higher levels of immigration would, in the long term, solve America’s financial insolvency as it relates to these two social entitlement programs. Their argument is, in effect, that the more folks moving into the Country, the more tax dollars flowing into Washington. This logic is a flawed as it is hopeful. First off, the kind of immigration we’ve experienced most in the past several decades, the illegal type, doesn’t contribute to national revenue as the immigrants aren’t paying taxes. Secondly, a study conducted with legal immigrants discovered that even folks who played by the rules, and came to America the right way, still have a disproportionate advantage over native citizens when it comes to their return on investment (ROI) of Social Security and FICA (Medicare / Medicaid) taxes.
Former analysts with the Social Security Administration found, when they examined the pay-in by (through taxes), and pay-out to (via Social Security benefits) American seniors, that immigrants received a greater benefit from Social Security than native citizens. The return on investment, or premium over their recouped principal, to native citizens averaged 3%. The ROI for legal immigrants was, on average, 3.4%. This means that non-natives receive a higher ROI on dollars invested in the entitlement programs than natives. This, obviously, refutes any notion that immigration of any type, much less illegal immigration, slows the bankruptcy train over at the Social Security Administration.
In fact, illegal immigrants who live in the shadows of our society for decades, before being granted amnesty, will invest no taxes into the system from which they’ll receive benefits if granted amnesty. The ROI on their “investment” will be darn near 100% on Medicare and exceedingly high on Social Security (depending on their age when citizenship is granted).
No rational American is against fair, legal immigration, for one of the great strengths of our nation has long been the desire of folks from around the world to join this great experiment in freedom. The danger of illegal immigration, however, and the social and economic costs associated with it, threaten the very culture of opportunity and liberty that has beckoned generations of immigrants to our shores.
A link to the source article is below: