What Does Illegal Immigration Cost?

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 budgets…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.” 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.” 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. 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. 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. 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. 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. 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. 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.” 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. 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.” 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.” 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. 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 underestimate the cost.

Public Comments

1. fiddy cent
2. looks like you answered it
3. Billions, billions and more billions, not to mention the heartbreak of many families that have had a member murdered by an illegal. You have answered most of your own question.
4. A heck of a lot more than they are worth to the citizens of the Country. The only value is to the overly greedy business owners..... who are breaking Federal laws at the expense of legal citizens. U.P.
5. this is probably the longest question that i have ever read and they answered their own question
6. I would like to ask the president why he’s willing to destroy our country for the benefit of only a few people? America will turn into the mirror image of Mexico when twelve million illegals bring their extended families over from Mexico. I can’t believe how far this president has fallen since the morning of 9/11/01 .
7. Too freakin much! It's bad enough seeing the taxes they take out of my paycheck, but what's worse is seeing an illegal with a nicer car than me!
8. The correct answer is (drum roll please), TOO MUCH!
9. http://www.lframerica.com/march2.html this is the link to the March for America to be held June 14-16 and will be nationwide, coming soon to a town near you. hope to see you there, it is a march AGAINST illegal immigrants.
10. My first response is to the march that is supposed to take place in June. Do any of you really think this will be peaceful or do you think that the illegals will show up and be violent? As far as the question... I do not believe that bringing them here legally, on a work Visa, in necessarily a solution to a problem. In fact it won't make much of a difference because they will still be crossing the border illegally. They have put a strain on our federal and local governments, or police departments, our judicial system and have done harm to many Americans. They have done this by murder, drugs, DWI's and child molestation. I am not saying that Americans are perfect and don't do these things as well, but there is a lot more of it happening than before. I lived in a town that was 99.9% white. There had never been a murder, violent crime, theft and/or burglary. Everybody was very nice and looked out for one another.
11. You answered your own question - which is why I gave it a 'star' - you gave alot of GOOD information. After sitting on a jury till recently for a capital murder case - for an illegal that shot 4 people, 2 died - that was a KNOWN gang member and drug dealer that has an arrest record - - it i costing MUCH MORE than many have begun to realize. Sitting there having to go thru murder scene photos - coroner's photos - listening to witness after witness after witness - - something has to be done. The madness that is south of the border is coming over that border and we have a blood bath going on in many areas because of the lack of control over that border.
12. Here's the numbers I've found: Over the past 10 years: more than $400 billion on social services Last year: economy lost $23 billion in money wired to Mexico Over a billion for incarcerated illegals About $15 billion for the education of illegal children You might find the following website interesting: