There were even bigger questions about the study. By its own admission, it considered only the tax contributions of low-skilled immigrants, not what they contribute to the economy as a whole. Heritage has said it will release new cost estimates, but these numbers should be met with skepticism.
State-level studies that have taken both into account consistently find that the economic contributions of these immigrants dwarf their fiscal costs. A 2006 analysis by the Texas comptroller estimated that low-skilled unauthorized workers cost the state treasury $504 million more than they paid in taxes in 2005. Without them, however, the state’s economy would have shrunk by 2.1 percent, or $17.7 billion, as the competitive edge of Texas businesses diminished.
Likewise, a 2006 study by the Kenan Institute at the University of North Carolina found that although Hispanic immigrants imposed a net $61 million cost on the state budget, they contributed $9 billion to the gross state product.
The Heritage Foundation study also implied that a homegrown working class would be cheaper for the country because households headed by low-skilled immigrants consumed $10,000 more in government services than those headed by Americans. The trouble is that the study compared the welfare use of low- skilled immigrant households with average American households, rather than with low-skilled American households.
In comparing welfare use by immigrants with that of Americans in the same socioeconomic stratum, a different picture emerges, as a study by Leighton Ku and Brian Bruen of George Washington University for the Cato Institute found recently.
Low-skilled foreigners, including adults and their U.S.- born children, were generally less likely than Americans to receive public benefits, such as from Medicaid, the Supplemental Nutrition Assistance Program and Supplemental Security Income. This is partly because many adults are in the U.S. illegally or on temporary visas or haven’t held a green card long enough to qualify for most means-tested benefits besides emergency health care. But the value of benefits they receive is usually lower, too.
“The combination of lower average utilization and smaller average benefits indicates that the overall cost of public benefits is substantially less for low-income non-citizen immigrants than for comparable native-born adults and children,” the Cato study concluded.
Restrictionists regard the 1990s as the decade of mass migration, when immigrants supposedly flooded in and threatened American jobs and wages. But the country had low unemployment during many of those years. More to the point, the size of the underclass shrank overall. While the number of immigrant households living in poverty increased by 194,000 from 1995 to 2004, the number of American households below the poverty line declined by 675,000.
This suggests that as foreigners moved into the lower class, they pushed more native-born people into the middle class. How? Economists Giovanni Peri and Gianmarco Ottaviano’s 2008 study showed that low-skilled immigrants don’t take away jobs from native high-school dropouts.
Instead, they open better opportunities for them. The presence of non-English-speaking foreigners makes physical skills more plentiful relative to demand, and language and other cultural skills scarcer. Hence even the most basic acculturation of the native-born starts commanding a higher premium in the labor market.
Restrictionists are trying to torpedo immigration reform by scapegoating poor foreigners for the overextended U.S. welfare state and the country’s job troubles. If these forces succeed, all Americans will pay the price.
Shikha Dalmia, a contributor to Bloomberg View, is a Detroit-based senior analyst at the Reason Foundation.