The Myth Of No-Cost Immigrants

From Investor Business Daily:
Posted 11/14/2005

Immigration Reform: Conventional wisdom says immigrants are not a financial burden to taxpayers because they work hard, pay taxes and rarely go on the dole. But it's a myth, and a new study blows another hole in it.
The University of Florida finds that immigrant families have been costing that state a net $1,800 per household per year, a financial burden much larger than previously thought.

The findings surprised the study's author, who is a pro-immigration Democrat. After crunching the numbers, economist David Denslow discovered immigrants — legal and illegal — were consuming much more in public services and paying much less in taxes than the average resident.

Chief among the government services they were consuming were education and Medicaid.

But wait a minute. Didn't last decade's welfare reform push a lot of immigrants off the dole?

Yes, but the decline in immigrant cash aid and food stamps has not resulted in a significant savings for taxpayers, because it has been almost entirely offset by increases in the cost of providing Medicaid to immigrant households.

In fact, a recent study by the Center for Immigration Studies found that the average welfare payout to immigrant households, both legal and illegal, has changed little and remains about $2,000 a year, which is 50% higher than the payout for natives.

In 1996, 22% of immigrant households were on the dole (compared with 15% for natives), according to CIS. By 2001, the share rose to 23%. Over that period, average Medicaid payments to immigrants jumped to $1,495 from $1,203.

Immigrant households account for a growing share of the welfare caseload.

The number of immigrants using at least one major welfare program has steadily increased, with the exception of a small drop in 1997.

Between 1996 and 2001, the number of immigrant households using the welfare system grew by 750,000 to more than 3 million — accounting for almost 18% of all U.S. households on welfare. That share is expected to rise with continued high rates of immigration.

And if you think immigrants, most of whom are poor Mexicans, will stop depending on U.S. welfare as they settle into jobs and even careers here, think again.

CIS found that welfare use actually increases significantly with duration of stay in the U.S. Not until they have lived here more than 20 years does it start to go down on average.

"To some extent, assimilation for many immigrants means assimilation into the welfare system," the report said. "This is the case for both immigrants in general and for legal immigrants."

The Florida and national studies show that immigrant use of the welfare system remains well above that of natives and creates a significant cost to taxpayers. Their findings tip the debate over the cost of immigrants in favor of immigration reformers.