By Philip Wolgin, Guest Blogger and Patrick Oakford, Guest Blogger on Mar 25, 2013 at 9:30 am
Economists, of all political persuasions, see immigration reform as a benefit for the economy and government budgets. Bringing undocumented workers from the economic sidelines into the mainstream carries economic pluses all around—robust economic growth, better pay and working conditions, more taxpayers sharing the burden, a population of innovators and entrepreneurs, and less wasteful government spending on the current, unworkable, immigration regime.
That hasn’t stopped die-hard opponents of immigration reform from issuing a slew of reports making extraordinary claims to the contrary. These reports use every trick in the book to maximize the claimed costs of immigration, and minimize its benefits. In 2006 and 2007, the last times that Congress debated immigration reform, some studies tried to argue that reform would be too costly for America—even though the non-partisan Congressional Budget Office estimated that passing the 2007 reform bill would bring in more than twice as much revenue as additional benefits paid out.
As the immigration debate heats up, we expect these same opponents of reform to sound false alarms about immigration reform’s fiscal impact. Here are four alarmists Congress (and the media) should turn a deaf ear to:
1. Robert Rector, Heritage Foundation:
In the midst of the 2007 immigration reform debates, Rector published a study claiming that passing reform would cost the U.S. at least $2.6 trillion. The study was deceptively simple: Rector estimated that the bulk of the legalized population would at some point turn age 67 and retire, and have a net fiscal cost to the government of roughly $17,000 per year.
But Rector only considered costs after retirement, not any of the tax contributions these immigrants made over their lifetime. And he failed to acknowledge the fact that on average all retirees (immigrant and native born alike) use more in services than they pay in taxes. Rector’s barebones analysis attempted to characterize immigrants as an excessive drain on the public’s purse by ignoring the fact that on average immigrants who naturalize receive less in social security benefits than native born recipients of social security.
Outlandish claims are Rector’s forte. Take for example his claim, in 2006, that passing immigration reform could increase the number of new immigrants in the U.S. by 200 million people over twenty years, roughly 25 percent more people than in all of Central America and almost twice the population of Mexico alone.
2. Steve Camarota, Center for Immigration Studies:
Camarota has been arguing for years that immigrants—particularly Hispanic immigrants—use more in social services than any other group. However, he gets to these conclusions through arbitrary methodological choices.
In theory, his study should compare immigrants with the native born. In practice, however, he looks at only a fraction of each population, namely households with children, excluding households that do not have kids. Since immigrants have higher birth rates than native born, Camarota’s method likely captures a larger share of immigrants utilizing social service than it does for the native born.
Equally deceiving is the fact that he does not include basic controls in his analysis. When comparing welfare use—which he sees as an indicator of “immigrants’ adaptation to life in the United States”—he fails to control for differences in household wealth between native and newcomer. A more appropriate comparison would be to see if immigrant households use social programs differently than their native-born peers at a similar income level.
Not surprisingly, the differences between the share of native born and the foreign born households using social services disappear when you take into account income level and compare all households, not simply those with children. And evidence shows that today’s immigrants—including Hispanics—are integrating at similar rates to previous waves of newcomers.
3. Jack Martin and Eric Ruark, Federation for American Immigration Reform:
Martin and Ruark have been claiming for years that undocumented immigrants represent a large fiscal burden on the United States, going as far to estimate the annual net cost of these immigrants at $113 Billion. But like the studies above, this report is also premised on faulty methodology.
First and foremost they inflate the number of unauthorized immigrants in the U.S., and thus inflate the overall fiscal impact. Despite the widely accepted estimates of the undocumented population being 11.2 million in 2010 (the year of their study,) Martin and Ruark claim that there were actually 16 million undocumented immigrants living in the U.S. They arrive at this estimate in large part by including the native-born U.S. citizen children of the undocumented in their calculations. And because these children are eligible for public benefits, it substantially increases the size of the “fiscal burden” of the immigrant group. But these child-related “costs”—including public education and grants for attending college—are the same investments that Americans make in all children, investments that will be paid off when these children graduate from school, enter the workforce, and pay taxes.
Similarly, the authors include a laundry list of other “costs” to the American taxpayer that are not specifically or only related to the undocumented population:
- They include the entire budget of Immigration and Customs Enforcement (A quick note of the word “Customs” in Immigration and Customs Enforcement should inform the reader that the agency has other functions.)
- They include the entire cost of the immigration court system, which also reviews things like claims for asylum.
- And as an example of just how sweepingly they define “costs”, they include a federal grant for state and local law enforcement efforts aimed at cracking down on activities such as drunk driving, in their fiscal impact of the undocumented.
Most importantly, even if you accept the faulty premise that these “services” are in fact costs, they are only costly because we have 11 million individuals living in the United States without legal status. Passing an immigration reform plan with a roadmap to citizenship would not only legalize the population and remove these costs, but would add a cumulative $1.5 Trillion to the U.S. GDP over a decade, and up to $5.4 Billion in new tax revenue in the first 3 years alone.
Sadly, in 2006 and 2007 these flawed studies circulated around the policy debates. But while it is almost certain that these scholars will use the same methodological gimmicks in the coming months, in the hopes of derailing common sense immigration reform, Congress, the media, and the American public are under no obligation to listen.
Philip Wolgin is a Senior Policy Analyst on the CAP Immigration Policy team, and Patrick Oakford is a Research Assistant in the Economic Policy department.
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