Cost of Low-Skill Immigrants to the US Taxpayer

by Debbie Pelley: Texas' illegal immigrant population is costing the state's taxpayers more than $4.7 billion per year for education, medical care and incarceration, according to an analysis of the latest Census data by the Federation for American Immigration Reform. According to the group, even if the estimated tax contributions of illegal immigrant workers are subtracted, net outlays still amount to more than $3.7 billion per year, costing the average, native-born Texas household about $725. Taxpayer-funded medical outlays for health care provided to the state's illegal alien population amount to about $520 million a year, according to FAIR. The uncompensated cost of incarcerating illegal aliens in Texas' state and county prisons amounts to about $150 million a year (not including local jail detention costs or related law enforcement and judicial expenditures or the monetary costs of the crimes that led to their incarceration). . . . [Read More]

The ADE in Arkansas has intially reported $163 Million for education and imprisonment. Arkansas lawmakers are discussing the best way to tackle the illegal immigration at the state level. . . . [Read More & Videos ]

The WPAAG reported the following details from a 2007 Heritage Foundation, study titled The Fiscal Cost of Low-Skill Immigrants to the U.S. Taxpayer:

Each year, families and individuals pay taxes to the government and receive back a wide variety of services and benefits. A fiscal deficit occurs when the benefits and services received by one group exceed the taxes paid. When such a deficit occurs, other groups must pay for the services and benefits of the group in deficit. Each year, govern­ment is involved in a large-scale transfer of resources between different social groups.

On average, low-skill immigrant households re­ceived $30,160 per household in immediate govern­ment benefits and services in FY 2004, including direct benefits, means-tested benefits, education, and popula­tion-based services. By contrast, low-skill immigrant households paid only $10,573 in taxes. Thus, low-skill immigrant households received nearly three dollars in benefits and services for each dollar in taxes paid.

The net fiscal deficit of a household equals the cost of immediate benefits and services received minus taxes paid. As Chart 5 shows, if the costs of direct and means-tested benefits, education, and population-based ser­vices were counted, the average low-skill household had a fiscal deficit of $19,588 (expenditures of $30,160 minus $10,573 in taxes).

However, the fiscal burden becomes most severe among elderly households, where the net annual fiscal deficit soars to $32,686 per household per year. This amounts to roughly $15,000 per year for each elderly low-skill immigrant.

It is often argued that low-skill immigrants have a positive impact on U.S. taxpayers because they pay taxes into the Social Security trust fund. Low-skill immigrant households receive many other government benefits as well, receiving ten dollars in total government benefits for each dollar they pay in Social Security taxes.

Current immigrants (both legal and illegal) have very low education levels relative to the non-immigrant U.S. population. At least 50%, and perhaps 60% of illegal immigrant adults lack a high school degree… By contrast, only 9% of non-immigrant adults lack a high school degree. The current immigrant population, thus, contains a disproportionate share of poorly edu­cated individuals. These individuals will tend to have low wages, pay little in taxes, and receive above average levels of government benefits and services.

There is a common misconception that the low edu­cation levels of recent immigrants is part of a permanent historical pattern, and that the U.S. has always admitted immigrants who were poorly educated relative to the native born population. Historically, this was not the case. For example, in 1960, recent immigrants were no more likely than were non-immigrants to lack a high school degree. By 1998, recent immigrants were almost four times more likely to lack a high school degree than were non-immigrants.

As the relative education level of immigrants fell in recent decades, so did their relative wage levels. In 1960, the average immigrant male in the U.S. actually earned more than the average non-immigrant man. As the relative edu­cation levels of subsequent waves of immigrants fell, so did relative wages. By 1998, the average immigrant earned 23% less than the average non-immigrant.

Low wage levels in low-skill immigrant households lead to high levels of poverty:Over 30% of persons living in low-skill immigrant households were poor in 2004 compared to the overall poverty rate of 12.7% in the U.S. population.. . . [Read More]

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