Immigrants and Welfare (2007 Jun)


by Barry A. Liebling

There are three major objections to open immigration into the United States. First, immigrants might be dangerous criminals or terrorists intent on harming citizens. Second, immigrants might compete successfully with Americans in the job market. And third, immigrants could increase the burden on the welfare system.

The second objection is a sham. The job market should be open to all honest people who deal with employers by mutual consent. In a free society more productive workers generally do better than less productive workers – whether they originate from another country, another city, or another neighborhood.

The third objection, that immigrants might stress the welfare state, requires scrutiny. If true, what does it mean and what should be done to remedy it?

In May 2007, with Congress considering wide-ranging immigration legislation, part of the debate has focused on the welfare issue. On one side is the Heritage Foundation which published a study on the fiscal cost of low-skill immigrants by Robert Rector and Christine Kim. The authors analyze data on low-skill immigrants – both legal and illegal – defined as people with less than a high school education. They calculate that low-skill immigrant households receive an average of $30,160 per year in “immediate benefits and services” from the government but pay only $10,573 in taxes. Thus, their net fiscal deficit is $19,588 per household – a deficit that has to be paid by “the upper middle class” … “providing an extra tax burden on the already hard-pressed.”

The Heritage study does not argue that all immigrants should be kept out of the United States. Instead it urges bringing in high-skill educated workers who will be “fiscal contributors … to the government,” … “not fiscal takers.”

The editors of The Wall Street Journal take the opposite side, describing themselves as “humane and pro-growth” and immigrant-friendly. Their statistical analysis contradicts the Heritage Foundation’s and concludes that low-skilled immigrants pay at least as much taxes as they receive in benefits.

As far as these political adversaries are concerned forbidding or encouraging immigration hinges on how it affects the welfare system. But something is wrong with this picture. Each side takes the welfare system as a given and does not mention the fundamental issue – that the welfare system is a poison that is tainting human relations. It is noteworthy that the same week in May, Tibor Machan of Chapman University wrote that the big problem with immigration is “the welfare state itself, in the government’s policy of coercive wealth redistribution.” (

In fact, the welfare state has a long track record of turning people against one another, encouraging resentment, making it difficult to “live and let live,” and giving busybodies an excuse to meddle.

The Heritage Foundation study states that low-skill immigrants are a net loss to the country because they are consuming more government benefits than they are paying in taxes. And the same report states that “assistance to the least advantaged American families has become accepted as our mutual responsibility to one another.” What proportion of Americans are considered “least advantaged?” The lead author Robert Rector explains in National Review Online that the federal government transfers money and services to the “lower-income half of the population.” This suggests that an enormous number of Americans are a burden – receiving more than they are giving.

Notice the implication of living in a welfare state. You are either a net loss because the value of your government benefits exceeds the taxes you pay, or you are a net gain because you are paying more in taxes than you are getting. Nearly everyone is either a freeloader or an involuntary benefactor. Even the rare individuals who pay taxes that exactly equal the value of their benefits do not win because they probably would have used their taxed money differently from how the government spent it.

The Heritage Foundation is endorsing the immigration of high-skill individuals – not because they, like all people, deserve to live their lives for their own self-fulfillment – but because high-skill immigrants will continue to fund the welfare state. This makes the high-skill immigrant a chump who can conveniently be exploited.

The Rector team is saying that low-skill immigrants should be excluded because they are draining resources from taxpayers. While the reader is lead to suspect that low-skill immigrants are more of a net loss to the country than are low-skill Americans, the Heritage Foundation report never makes this comparison. Why? If true, it certainly would make points for anti-immigration partisans.

It turns out that the Heritage Foundation published an analysis of the benefits received and taxes paid of low-skill households – regardless of immigrant status – one month earlier (Rector, Kim, and Watkins, Heritage Foundation, April 4, 2007). Significantly, the Rector team found that low-skill households in general receive more benefits and pay less taxes than do low-skill immigrant households. Thus, according to the Rector team’s own research low-skill immigrants are less of a tax burden than are low-skill Americans.

The long term solution to the immigration and welfare problem is easy to conceptualize but politically difficult to implement. The welfare state should be dismantled and replaced by government policies that recognize individual rights. Achieving a better future is a challenge, and the first step is recognizing the problem.

*** See other entries at in “Monthly Columns.” ***



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