Academic journal article The Cato Journal

Immigration and the Welfare State

Academic journal article The Cato Journal

Immigration and the Welfare State

Article excerpt

Among the more serious arguments against liberalizing immigration is that it can be costly to taxpayers. Low-skilled immigrants in particular consume more government services than they pay in taxes, increasing the burden of government for native-born Americans. Organizations such as the Center for Immigration Studies, the Heritage Foundation, and the Federation for American Immigration Reform have produced reports claiming that immigration costs taxpayers tens of billions of dollars a year, with the heaviest costs borne by state and local taxpayers. No less a classical liberal than Milton Freidman mused that open immigration is incompatible with a welfare state. Responding to a question at a libertarian conference in 1999, Friedman rejected the idea of opening the U.S. border to all immigrants, declaring that "You cannot simultaneously have free immigration and a welfare state" (Free Students 2008).

Contrary to those concerns, immigration to the United States does not pose a long-term burden on U.S. taxpayers. The typical immigrant and his or her descendants pay more in taxes than they consume in government services in terms of net present value. Low-skilled immigrants do impose a net cost on government, in particular on the state and local level, but those costs are often exaggerated by critics of immigration and are offset by broader benefits to the overall economy. And with all due respect to Milton Freidman, practical steps can be taken to allow nations such as the United States to reap the benefits of a more open immigration system while maintaining certain welfare programs for citizens.

Legal Barriers to Collecting Welfare

Despite the common belief, newcomers to the United States are not generally eligible for the full smorgasbord of welfare benefits. Title IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 has made it difficult for legal permanent residents in the United States to live as wards of the state. The law, also known as the 1996 Welfare Reform Act, states that "self-sufficiency has been a basic principle of United States immigration law." In particular, "aliens within the Nation's borders [should] not depend on public resources to meet their needs," and "the availability of public benefits [should] not constitute an incentive for immigration to the United States" (U.S. Congress 1996).

The law bars newly legalized permanent residents from eligibility for a range of federal income support programs for at least the first five years of their residency. Those programs include Temporary Assistance for Needy Families, Food Stamps, Supplemental Security Income, Medicaid (Full-Scope), and the Children's Health Insurance Program (Anderson 2010: 198). The law requires a relative to sign a sworn affidavit committing to support the legal permanent resident for their first five years of residency if needed. Illegal immigrants are ineligible for almost all federal welfare programs.

Once an immigrant becomes a naturalized citizen, he or she is eligible for the same benefits available to native-born Americans. A range of benefits are also available to those admitted as refugees or approved for asylum, under the assumption that they have suffered trauma that may make it difficult for them to support themselves immediately upon arrival. All foreign-born residents, even those in the United States without authorization, can enroll their children in public K-12 schools and be treated for emergency medical needs.

Immigrants Prefer Work

Immigrants come to America today to build a better life through work, not welfare, just as they have throughout American history. We can see evidence of this in their labor-force participation rates as well as their gravitation toward states that offer the best prospects for employment, not welfare benefits.

The typical foreign-born adult resident of the United States today is more likely to participate in the work force than the typical native-born American. …

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