Are Immigrants Bad for Government Budgets?

Yves here. One of the major charges leveled at immigrants in the US is that they use public services (the stereotype is that they show up in emergency rooms, which are not a taxpayer expense,* as well as send children to school) and don’t provide anywhere near the contribution to the economy in terms of tax contributions relative to what they extract.

Notice that that charge is implicitly made of illegal immigrants, who presumably don’t pay income taxes (although I personally know one who does, by virtue of being in an immigration Schrodinger’s cat uncertainty state and having a Social Security card and meticulously paying taxes for 15 years while no longer having a visa and not having become a citizen. Will not bore you whit his shaggy dog story). But their incomes are often so low that it’s not clear they’d pay much even if their taxes were reported, save regressive FICA taxes. Yet they do pay other taxes: sales taxes, gasoline taxes, and property taxes embedded in their rents.

There is a separate public policy argument about immigration and foreign guest workers on H1-B visas, which is that at least the way it is conducted in America, that in combination with an anti-labor-bargaining policies, cheap immigrant labor gives employers even more leverage against workers. This post focuses narrowly on the “are they worse than natives in terms of impact on the public purse?” The study focuses on the UK. One of the striking revelations is how little decent data there is on this topic, particularly in a country that has no where near the number of unofficial immigrants as the US.

Data on social attitudes show that the perceived burden of immigration on a nation’s public finances is one of the strongest economic concerns associated with hostility to immigration. Yet recent official reports suggest an important positive role for immigration in the long-run health of public finances. This column argues that there can be no general conclusions applicable in all circumstances about whether immigration is favourable or unfavourable for public finances. But evidence is emerging on particular cases through studies of immigrant composition and use of services, and the effects of immigration on native outcomes.

By Ian Preston, Professor of Economics, University College London; Deputy Research Director, Centre for Research and Analysis of Migration. Originally published at VoxEU

Much attention of researchers and policy-makers has been directed at the effects of immigration on the wages and employment of natives in the host country (for example, Friedberg and Hunt 1995; Manacorda et al 2012; Dustmann et al 2013). But most empirical studies have failed to find any convincing evidence of substantial negative impact. Data on social attitudes show that the perceived burden of immigration on public finances is a dimension of economic concern just as and perhaps more strongly associated with hostility to immigration, not only in the UK but across many countries (Card et al 2012; Dustmann and Preston 2006, 2007).

Such priority may well be economically justified: the burden or surplus generated through the effects of immigration on public finances may plausibly be regarded as a matter of prime importance. Press coverage in the UK and elsewhere reflects this with immigrants’ use of public services an easy focus of concern. Yet recent reports – by the UK’s Office for Budget Responsibility (2013) and the OECD (2013), for example – have also directed attention towards an important positive role for immigration in the long-run health of public finances.

A proper understanding of such effects is both an important input into decision-making on immigration policy and a necessary concomitant to planning for its implications.

Research suggests that there is no simple and general answer, applicable in all circumstances, to the size and direction of the effect of immigration in this respect (Preston 2014). Immigrants contribute through payment of taxes at the same time as they draw on public finances through consumption of publicly provided goods and services. Immigrants differ from native-born residents in demographic type, in skills and in social customs and consequently both groups pay different taxes and impose differently on public services.

In particular, net fiscal contributions vary over individual lifecycles, with the heaviest burdens on major public spending categories, such as health and education, coming early and late in life, whereas the main taxpaying years are those of working age in between. The age composition of the immigrant population typically differs from that of the native-born.

Moreover, to the extent that migration is economically driven and that the economic rewards are affected by tax rates and entitlements to benefits in cash or in kind from public spending, there is potential for the composition of the immigrant population itself to be affected by the nature of public sector finances.

There is no way to answer the question of whether immigration affects the public exchequer of any particular country positively or negatively except by careful and comprehensive accounting. Pointing to particular visible burdens or contributions while ignoring less visible counterbalances is not helpful.

Tax payments and welfare benefit receipts will be driven largely by the incomes and labour market status of immigrants and by the nature of immigrant spending. Evidence suggests that recent UK immigrants are younger and better qualified than the typical UK-born worker though many immigrants tend to work initially at jobs paying less than would be earned by similarly qualified UK-born workers (Dustmann et al 2013). Over time such downgrading tends to diminish as immigrants adapt to the receiving labour market. The path of tax payments ought to evolve accordingly.

Much research has been devoted across many countries to the question of whether generous welfare systems act as magnets for economic migration, comparing welfare dependence of immigrants and natives or looking for association across countries between the nature of migration flows and welfare entitlements, with mixed results. Evidence for the UK shows that levels of benefit receipt and use of social housing are lower among recent immigrants than among the UK-born (Dustmann and Frattini 2014).

Receipt of benefits in kind is less easy to assess and to cost accurately. For collectively consumed public services such as defence or the environment, the growth in numbers that comes with immigration allows the burden of financing to be spread more widely. For those elements of the public sector provided in kind but largely or partially consumed individually, assessment is trickier but pertinent research nonetheless offers useful evidence.

Research in several countries suggests that immigrants are typically healthier than natives when arriving (unsurprisingly if the economic gains from migrating for work are greater for the more healthy), but they assimilate to native health levels over time. It would therefore be odd if burdens on health spending were very much different to those from comparable UK-born. Wadsworth (2013), for example, shows no difference, which is compatible with what has been found for other countries.

The potential impact of immigration on crime rates is sometimes cited as an issue. But again, empirical work across several countries offers little to confirm such fears. Bell et al (2013) and Jaitman and Machin (2013), for example, show that the most recent wave of UK immigration has had no evident impact on crime rates.

As regards education, immigrants typically arrive after the costs of primary and secondary education have been borne in their country of origin. Their own children may, of course, need to be educated but, unless those children are expected to leave before adulthood, that needs to be seen in the context of their whole lifecycle and, especially, their future tax payments.

Cross-national evidence of any effect on educational attainment of children of native heritage is mixed. But recent UK research on the effect of linguistic diversity on results in primary schools suggests negative effects can be ruled out (Geay et al. 2013). The contribution of fees paid by overseas students is, of course, an important part of university budgets, and Machin and Murphy (2014) show no evidence of any crowding out of domestic students.

Overall, the sensitivity of public expenditure to immigration will vary depending on the composition of public spending and in particular on its redistributiveness and on the extent of rivalry in consumption. Immigration not only has the potential to generate costs through the consumption of public services by immigrants themselves but can also affect the costliness of provision to natives. Viewed in a dynamic context, immigration can also alter the calculus of public sector finances through its impact on the age structure of the population and through the timing of immigration in the immigrant life span.

Because the balance between these effects depends, among other things, on the nature of tax and spending rules, the selection pressures on immigrant composition and the stage of the business cycle at which effects are assessed, there are no general conclusions applicable in all circumstances and to all countries about whether immigration is favourable for public finances. Nonetheless, evidence is increasingly emerging on particular cases through studies of immigrant composition and use of services and also through studies of the effect of immigration on native outcomes.

See original post for references

* I hate to point out something no one likes thinking about: the price of hospital services, which is what critics usually harangue about when talking about the mythical immigrant who shows up with a heart attack, has nothing to do with the marginal cost of providing those services. The only marginal cost to the hospital is the extent to which the person who shows up in the emergency room uses disposables (as in drugs, disinfectants, food, disposables used to process tests, like syringes and lab supplies) and/or takes up a bed when the hospital is at capacity and displaces a presumed paying customer. That is one of the maddening things about the price of hospital services generally, that it is designed to recover large overheads and is even more arbitrary by virtue of insurers having negotiated steep discounts, leaving those unlucky enough not to be consuming discounted services being hit with unjustifiably high prices. Only if there are enough undocumented immigrants who show up at hospitals for the hospital to be forced to add to capacity to deal with them, as in add to their medical staff or increase hospital beds, are these workers affecting the hospital’s economics in any meaningful way.

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  1. JLCG

    Immigrants are a net contribution to the wealth of the nation. Immigrants are fully formed individuals, mostly fully educated along some path and whose education and development has cost nothing to the admitting entity.
    Let’s compute the cost of raising an American from conception to the moment where that immigrant is a contributor to the society and we will see that an immigrant is a gift to the receiving state. An immigrant is a fully developed individual whose maintenance and education have cost nothing to the receiving state.

    Slavery on the contrary is a net loss for a state because of the cost of raising a slave from conception to the moment of social contribution. That is why the capture of slaves was so necessary for a slave holding state.

    1. F. O. Hardy

      “An immigrant is a gift to the receiving state” – That’s a rather sweeping assertion. Does that include the Tsarnaev brothers, Mohammed Atta, Major Hasan, and your friendly neighborhood MS-13 member? (Yes, I’m being inflammatory. Yes, your statement fails the laugh test. Yes, your statement about the “cost of raising an American” makes me think you hate your own nation).

    2. TG

      Excuse me? So you add immigrants and you get a ‘free’ person. OK fine.

      But without resources and tools, human beings have ZERO productive ability. Sure, immigrants are fully formed people. But when they come here, they dilute the available resources and capital.

      Suppose that 50 fully formed random adults moved in with you. Would your house or apartment immediately turn into a luxury high-rise condominium? I think not. Would it matter that you didn’t have to raise them from children? That has no bearing on the issue, does it?

      So a couple of third world refugees come here. We didn’t need to pay to grow them, sure. But we do need to pay enormous amounts to accommodate them – estimates of the per-capit capital in the United States are typically well over $200,000 per person. And then they have three children, which we also have to support. And as population densities increase, we start to have to increase our spending on infrastructure even more to deal with recycling and more efficient and expensive systems etc. These costs are so great that, unless the increase is slow, we just can’t afford them. Which is why we are getting poorer.

      Economists who have been paid to say that rapid population increases don’t hurt living standards will always say that. Honest people simply say that the average Indian is a whole lot poorer than your average Australian, even though India’s economy is larger and has grown much faster…

      1. washunate

        Are you suggesting a link between population density and GDP per capita? And are you saying that infrastructure is cheaper in low density?

    3. Jess

      “An immigrant is a fully developed individual whose maintenance and education have cost nothing to the receiving state.”

      Say what?! Tell that to the folks in CA and other states whose schools are overrun with children who don’t speak English. Try Lynn, MA which has had such an increase in “unaccompanied minors” that it has had to build a new middle school that won’t even open until 2016 yet is already officially classified as overcrowded by MA state ed criteria. Try telling that to the Anaheim and Santa Ana, CA school districts which have students that speak something like 29 different languages.

      Tell that to the parents of native-born American students who must pay out-of-state tuition to a college across state lines while illegal immigrants students can attend for the in-state price. (Difference at a UC school? $22K per year.)

  2. Jesper

    The two things that stand out:
    -inward migration increases competition for jobs causing downward pressure on wages
    -inward migration increases competition for accomodation causing upward pressure on rents and purchase price on housing

    People who own their housing like the upward pressure on housing.
    People already in secure employment don’t experience much, if any, downward pressure on wages

    But for a person in insecure employment not owning his/her own home what is the logical/economical position?

    Like with most things the costs and benefits are distributed unevenly.
    The ones paying the costs and not receiving the benefits might be likely to oppose such policies. And with increasing numbers in insecure employment (insecure employment makes it difficult or impossible to purchase a home) what is the likely future trend?

    Economists will continue to produce reports supporting capital – that is where the money can be found. As for the ones opposing policies that will make their lives more difficult they’ll be accused of anything and everything from racism, being tricked into fighting the wrong enemy (migrants) and plain stupidity.

    1. vlade

      Ah, but how about the immmigrants creating more wealth which allows to pay more benefits to the (newly) unemployed? The picture is massively complicated.

      A few years back, there was a BBC programme ( about immigration where they put to a test the theory of “taking jobs”. That is, they gave jobs that typical Easter European immigrants would hold to British. An interesting thing was that there was a massive break between older an younger generation of Brits in their work ethics – the older one took the work and did it, while the younger often didn’t even turn up.

      There’s a few problems that work together, and the immigration is really just an end-game stuff.
      – crapification of jobs, including dead-end jobs;leading to low/irrelevant skill jobforce
      – automation

      So, as an employer you often end up in a situation where you’re considering taking on young and hard-working immigrant for a dead-end job (but the immigrant may not care as they may want to go home, or do something else), or low/irrelevant skilled native (which even at the same costs has less motivation for the job), or automate.

      And you end up in priorities being 1) immigrant 2) automate 3) native.

      And I’d want to point out this is not just for large companies. Few SMEs are at the end of the supply chain and able to dictate their prices. More often they are price takers. Which means they have to watch their costs closely, or go out of business.
      So hiring an immigrant or three may be the only way for them to protect another ten native jobs.

      I’m NOT saying it’s all like that, but it’s NOT all the other way either.

      I’ll be a broken record, but if you want to go further for this, the problem is more (of the already historically high) profits being retained by large corporates.

      1. Jesper

        People that has been through hard times do tend to work harder. Good times can spoil the work-ethic. I saw it in Ireland during the good times. The ones who were young during the good times were too often badly motivated workers during that time. I’d expect most of them to have changed as times changed and I’d expect that the ones who are young now are more motivated than the ones before them.
        Bad reputations can stick around, maybe the young of today are still badly motivated with poor work-ethic though I seriously doubt that.

        & another observation might be that what is good for the government budget isn’t automatically good for citizens…

  3. Dikaios Logos

    re: Ilegal immigrants in the U.S. and the U.S.’s budget. I have heard directly from senior officials at the U.S. Treasury that as concerns Social Security, immigrants are annual boon to the tune of at least $30 billion and perhaps a fair amount higher. Basically, the number of illegal SSNs is pretty obvious. A small set of numbers are re-used many, many times and it is relatively easy to deduce that the almost all of those people paying into the system with those numbers are not going to receive pay outs.

    1. Andrew Watts

      It isn’t that easy of a problem to solve. What if the median wage of most Americans had kept pace with growth? Then what would be the plight of Social Security?

    2. Jess

      Ah, yes, the phony SS numbers aren’t really a problem argument.

      Except, of course, when the phony number you’re using ends up being legitimately issued to a newborn, whose parents at some point in time discover that the little gleam in their eye already has a work history, a criminal record, owes taxes, etc.

      Or the people who numbers are faked by scammers who then pull off multi-million dollar tax refund scams and suddenly you’re in trouble every time you apply for a job, a loan, etc. Or the Feds knock on your door in the middle of the night with a battering ram and yell, “On the floor, mother-effer.”

  4. Andrew Watts


    Technically you’re correct in saying that emergency room visits are not a taxpayer expense but the overall operation of the hospitals is. Most hospitals in my area are registered as non-profit organizations. Which means they’re directly subsidized by the tax system by not paying the normal tax rate on their profits like any other business.

    1. Yves Smith Post author

      Please read my footnote about marginal costs. The marginal cost of treating an incremental patient is not high. That is what you are talking about with a non-paying patient, whether someone who is an illegal immigrant or someone who shows up with no insurance and no money

  5. ArkansasAngie

    The poor do not pay for themselves.

    The fact that American workers don’t want a job is the fault of unintended consequences. Dig a ditch or play video games and receive public assistance … duh.

    I am not personally willing to spend money on “others” until there is not hunger (etc) in the US. Until the unemployment rate (based on a reasonable labor force participation rate) says that we actually do have jobs that we cannot fill.

    Talking about a cause of deflation (though deflation doesn’t scare me) … allowing illegal aliens to lower the wage rates.

    We need to restructure our safety net and tax structure so that it doesn’t result in unemployment of Americans.

    Neither the Republicans nor Democrats will do anything about this. Why? Because their political power depends on them giving “stuff” away to the rich and the poor.

    1. Moneta

      Dig a ditch… isn’t that a well paid unionized job with a pension?

      The social net was created BECAUSE there was misery. I doubt that by cutting the social net, you’ll get full employment. However, I’m pretty sure you won’t be able to walk around without getting harassed for a buck here and there. The US already has more violence than all other developed countries.

  6. Moneta

    It depends on the time frame. In the short-term, immigration has been great and that is how we got USA the superpower but as we keep on plundering the world’s resources and destroy the environment, immigration will increasingly contribute to negative value.

    However, population dispersion is hard to control because it’s like a gas. What might look like free will is just a natural phenomenon, something that happens in a certain set of circumstances.

  7. trish

    “…the perceived burden of immigration”

    Feeding this perception and fanning the anti-immigration flames has been just another diversionary tactic of those at the top. What a con. They’ve easily got those lowly immigrant “free-loaders” beat in not “provid[ing] anywhere near the contribution to the economy in terms of tax contributions relative to what they extract.”

    But what great scapegoats those desperate people are, those “others.” What a great distraction from press/public focus on the elite’s skimming and looting and free-loading.
    And all at a far, far greater cost to society and the planet. But immigrants are great scapegoats and a great source of profit, to boot.

    I am always amazed that so many people in our country are unable to see these oft-desperate people as…people. Like them. people with children, mothers, fathers, siblings…struggling merely to live a reasonable life, to support their families. What would the do in their shoes???

  8. diptherio

    Looks like you forgot to include a byline for this piece, so I’ll supply it, in case anyone’s interested:

    Ian Preston, Professor of Economics, University College London; Deputy Research Director, Centre for Research and Analysis of Migration

    Credit where it’s due, and all that.

    1. Yves Smith Post author

      I did not forget. It was not up at VoxEU when I cross posted the post. I looked twice in my RSS reader and at the site itself. I will update the post.

  9. timbers

    My husband is a gay male Brasilian who entered the U.S. as an illegal immigrant. He paid an woman to marry her so he could a citizen. Eventually he did.

    He told me some of the tricks Brasilian immigrants use to work. One or more of them will share a single SS# and adopt the appropriate name at work. Without parsing all the team work and in and outs of doing this, it was immediately obvious to me that this could to lead to many of them never getting the Social Security and Medicare taxes they pay for years.

    It is very possible immigrants at net tax contributors. This is something I enjoy pointing out to my Tea Party friends on FB in the same sentence I urge them to thank illegal immigrants for paying for the SS and Medicare they will collect when they retire.

  10. Benedict@Large

    A country that cannot provide adequate employment for its own citizens has no business attending to the employment desires of foreigners.

  11. afisher

    And then, I am here to burst the bubble of ignorance by inserting a link to the actual research:

    The hater’s won’t read it, it is filled with entirely too many facts and that would indeed upset their vision that immigrants are supposedly taking away all the high paying jobs or the jobs that US workers are eagerly waiting to perform. Did you forget all the crops that were not collected because of the RW hate the immigrant legislation? Blame the laws that caused the crops to not be processed for the reason the cost went up.

      1. optimader

        An acquaintance is a third generation fruit grower, principally wine grapes, in California. He related to me that his family has had a three generation history w/ Mexican families that have mutually enjoyed a relationship as “temporary” agricultural workers. The economic twist is that they work in the US and live at home in Mexico. They have no interest in living in the US, like most people they prefer to live where they grew up and have family. These people have crop specific skills and are irreplaceable at growing and harvesting delicate fruits and certain nut crops that require human judgment and tactile skills.
        At the time I was talking to him on this subject ~3yrs ago, the consequence of the militarization of the US /Mexican border has conspired against this historically workable and mutually agreed employment relationship by inhibiting the free passage of these employees. This has had an adverse direct affect on the quality and scope of commercially viable crops he can raise, as well an adverse affect on the salubriousness of the Mexican employees lives.

        There is not an untapped domestic labor pool interested in or competent at this work. This turns into a Lose-Lose scenario where the two mutually enthusiastic principles are inhibited from engaging each other by infliction of blunt instrument Policy unrelated to their historically workable and benign relationship.

        Agricultural quality and variety are negatively affected, the lives of the principles are negatively affected and the consumer is negatively affected.
        Who wins are the special interests served by the fear mongers.

  12. Pelham

    Two data points regarding H1-B visas, which are largely used to bring in tech workers:

    1) Three-quarters of US college grads in the STEM fields (that we’re constantly told we need more of) cannot find work related to their degrees;

    2) Two-thirds of minority STEM grads from even the nation’s top-tier universities cannot find work in their fields.

    And outside of STEM, consider what has happened in the nation’s meat-packing industry over the past 40 years. This used to be an industry in which kids coming out of high school could get a high-paying, safe, clean union job capable of supporting a middle-class family. Then the industry consolidated and — breaking nearly every labor and immigration law then on the books — the packers brought in thousands of Latin American workers and busted the unions. Now these jobs are dirty, dangerous and pay poverty wages.

    One can make all the fuzzy but no doubt unassailably rational arguments about the overall effect on the economy of unrestrained immigration that one wishes. But that’s entirely irrelevant to what ordinary people see in their ordinary lives day to day and the real pressures that these households feel as a result. It’s quite possible, I believe, that we could cut way back on immigration and actually do harm to the overall economy as measured in gross terms while at the same time making life significantly better for the vast majority of Americans. And that, in the end, is what counts.

  13. Vatch

    Any population increase strains the budgets of governments and quasi-governmental public utilities, whether the population increase is due to births, immigration, or both. More people means there’s a need for more water supply and larger sewage systems. Public utilities, such as electricity and natural gas, must expand their capacity, which requires investment. Often such investment is financed, at least in part, by increasing the rates that the public pays. More schools will be needed, and either there must be more roads or there must be an increase in the capacity of public transportation. All varieties of pollution will increase as the population increases.

    So yes, immigration has an effect on government budgets. This doesn’t mean that immigrants are good or bad; it’s just simple cause and effect.

  14. bmeisen

    Uncertainty in the UK and the USA regarding the financial impact of immigrants is due substantially to the fact that authorities in those countries are not able to calculate with certainty their total number of immigrants, legal as well as illegal. Neither country requires citizen registration. Long before 911 it was apparent that Fortress America was a flop. The number of illegal immigrants in the USA is likely to be an order of magnitude greater than that of legal immigrants. UKIP moans about the EU but it is the efforts of EU immigration authorities that protects the country from the degree of illegal immigration that the USA experiences. The probable extent of illegal immigration in the USA and its long-standing relevance indicates that ultimately it is a wanted element in the economy.

  15. Globus Pallidus XI

    “Much attention of researchers and policy-makers has been directed at the effects of immigration on the wages and employment of natives in the host country (for example, Friedberg and Hunt 1995; Manacorda et al 2012; Dustmann et al 2013). But most empirical studies have failed to find any convincing evidence of substantial negative impact.”

    These are the same ‘researchers’ who proved that deregulating finance would not result in any instability, that free trade agreements would not result in corporations shipping jobs to low-wage countries, that austerity budgets promote economic growth, and that unregulated monopolies lower prices.

    Whores will do as they are paid, but that doesn’t mean that they should be invited into a reasoned discussion.

    For societies without an open frontier, there is ZERO record of prosperity developing without first having a low fertility rate. For societies with sustained high fertility rates, there is ZERO record of them ever developing prosperity.

    Modern India has the fruits of 500 years of western technological development. They have the fifth largest economy in the world, and have had many years of double-digit economic growth. And yet, half a billion people are chronically malnourished, their standard of living significantly lower than late medieval europe (and most of the rest are not much better off). It is an objective fact that a sustained high rate of population growth wipes out any degree of technological progress, and cancels any amount of economic growth.

    Economists who have ‘proved’ that rapid population growth cannot ever reduce the standard of living for the average person, should be treated the same as astronomers who have ‘proved’ that the sun rises in the east, or physicists who have ‘proved’ that perpetual motions motions are a reality. As charlatans.

    1. Vatch

      Thanks for your reasonable comment, Globus. As the economist Kenneth Boulding is reputed to have said:

      Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.

  16. KMSM

    I know this post focuses on the monetary value and contribution of immigrants, especially illegals. What the discussion refers to are poor immigrants from the poor (wrong) regions, like South America, Mexico or Africa. What’s left unsaid are that there are the right kinds of immigrants — like Ted Cruz or Rupert Murdoch — from the right countries who may strike it rich and/or contribute financially or intellectually.

    Whether rich immigrants from the right countries add more intellectual, financial, or moral value to America than do poor immigrants from the wrong countries, that’s a discussion worth having. If the Republicans want to go there, I think they should open this up as to who is more valuable: Ted Cruz who is a well-paid politician/lawyer with no actual small business experience, or a bunch of poor agricultural workers busting their derrieres for cheap wages and hardly any benefits who contribute to the economy with their labor.

    And while we’re at it, I think we ought to visit the idea of dual citizenship as well: Are you an American first, or do you share citizenship with another country? This discussion should apply to politicians and lobbyists especially with conflicts of interest.

    1. optimader

      I will throw out there that it stands to reason the majority of immigrants are of the poor and least skilled, least educated. Aren’t most people driven to immigrate due to intolerable indigenous circumstances? My ancestors were. The most privileged members of a society that immigrate are the outliers, having the least motivation to relocate. The US can be a great place to live, but so are a lot of other places if you have resources..

      1. MyLessThanPrimeBeef

        We should take in those who are persecuted or suffer natural disasters.

        But we also have to ask if there are so many immigrants due man-made (i.e. related to imperial hegemony) disasters and address the root cause.

        Even with natural disasters, the fundamental solution is to help make those countries better, healthier, stronger (stop exploitation would be a nice, first step), so they can handle those disasters themselves, except in rare, extreme cases .

        The doubt lingers that if we help with what we see immediately in front of us, that we are contributing to consolidate imperial gains overseas.

      2. KMSM

        Privileged members of society who immigrate may be outliers but they too have an impact. The title of Yves’ post asks, “Are Immigrants Bad for Government Budgets?” For those who say immigrants are bad for government budgets, I would include rich immigrants like Ted Cruz and Rupert Murdoch who have had negative impacts over government budgets due to their powerful and negative influence over fiscal policy. Ted Cruz through his policy is trying to make it harder for other immigrants to have success in America. Rupert Murdoch — through his Fox News and other media — helps drive the “immigrants are parasites” narrative that has had a negative influence over the discourse. Both of them owe much of their good fortune to their success in America, but they want to make it difficult for other immigrants to have that same opportunity.

        1. Vatch

          I would venture that right wingers like Cruz and Murdoch are making it hard for almost anyone to succeed in the U.S. It doesn’t matter whether a person is an immigrant or not. If one wants to succeed, one had better start out in or near the top 1%.

      3. ChrisPacific

        That might be true of illegals but I’m not sure it’s true of legal immigrants in general. Have a look at the categories for eligibility sometime. Family is probably the biggest category and there are some that fit your description (most notably the Cuban category, asylum in general, and maybe the lottery) but for anything employment-related the requirements are pretty stringent (note that I’m excluding non-immigrant visas like student or H-1B).

        Up until fairly recently, the strength of the US economy and other advantages (such as the extensive graduate education system) meant that the US has enjoyed a fairly strong net immigration of highly skilled workers. Put simply, they can usually expect better job opportunities and higher salaries than in their home country. Many arrive on student visas for graduate study, form some relationships and connections during that time, and then go on to work in the US. Some meet and marry Americans and achieve residency or citizenship that way. Others go the H1-B track (which can lead to employment-based sponsorship for a green card if you find the right employer and do a good enough job) or apply under the national interest category based on holding an advanced degree. Have a look at the demographics in any IT workplace and see how many Indians, Asians, English, Australians etc. they have. Many are residents or citizens rather than nonimmigrants.

        Looking at the published stats, it appears that family is by far the largest category, accounting for about two-thirds of all immigration. Next is employment at around 15%, with asylum accounting for about another 10% and the diversity lottery for 5%. I would guess that employment based immigrants are probably of above average skill and education, while asylum seekers are generally of below average education and training (although not necessarily ability). That leaves family, which probably has its fair share of those who might otherwise be illegals, but covers a fair number from the skilled categories as well – notably those grad students I mentioned who married Americans. You’d need to do further analysis to find out for sure, but I’m not sure that there is strong evidence overall to suggest that immigrants are less skilled/educated on average.

  17. Working Class Miro

    In order to better understand the impact of immigration one must divide immigrants into high-skill and low-skill segments. Not only that, but along with these two categories are Western vs. non-Western immigrants (to Western countries for example). There is little doubt that Western high-skill immigration to wealthy Western first world countries is not going to pose any problems. In fact there would probably be a balance of immigrants and emigrant between for example France and England.

    The trick most immigration advocates use is to mix high-skill Western immigrants in with low-skill non-Western immigrants to make the costs come out even.

    But where immigration becomes a problem is when it becomes a tool of class warfare welded by the rich against the poor. As immigration economist George J. Borjas (from Harvard) says, mass low-skill immigration is good for the rich and bad for the poor. It is good for the rich because the basic laws of supply and demand say that more people competing for the same positions will drive down wages, which in return drives up profits for the wealthy. Also many low-skill immigrants immediately (or after a year or two of work) go on benefits (welfare), becoming working age dependants and never contributing anything to society except more children who themselves often become dependants (cycle of dependency).

    So in order to understand the negative impacts of low-skill / non-Western immigration one needs to study that demographic in particular. In Norway, they recently did such a study on the costs of “non-Western” immigration (which will track fairly closely with low skill immigration in Norway):
    (Note: 1 million Norwegian Krone equals around $150,000)

    NoK 56 billion spent on training courses for immigrants

    An increasing number of immigrants end up outside the workforce despite costly introductory courses and work related training programs.

    (Finansavisen — Norwegian financial newspaper) In a series of articles in the last month entitled “the cost of immigration”, Finansavisen revealed that the various integration schemes costs tens of billions and that the results are rather startling.

    The money is pouring out, and an increasing number of immigrants end up outside the workforce despite the introductory courses, writes Finansavisen.

    The newspaper previously revealed that Norway loses NoK 4.1 million on each non-Western immigrant that arrive in the country, and that immigration has cost Norway NoK 70 billion in the past seven years.
    On Wednesday the newspaper revealed that the government has spent NoK 2 million on each newly arrived non-Western immigrant to get them to into the workforce or to take up studies. But despite these efforts fewer immigrants end up working or studying, according to figures released by the Bureau of Statistics in Norway (SSB).

    Only 50 percent of the immigrants that completed the program in 2010 are net contributors today after two years of Norwegian studies, social studies or other studies, according to SSB.

    NoK 56 billion

    After adding up all the social cost expenditures and the various course fees, the Government has invested a total of NoK 56 billion on various training courses for 56,000 immigrants in the period between 2004 and 2010.
    The outcome of the program is 33,000 immigrants who are either working or studying a year after they completed the courses, but the numbers are declining, according to Finansavisen.

    The flip side of the coin is that the government has spent NoK 23 billion on 23,000 individuals that are currently not doing anything useful that is beneficial to society.

    In addition to this the government has focused on ‘Jobbsjansen’ (The Job Opportunity), where it has invested NoK 290 million to get 360 non-Western immigrants into the workforce.

    As a comparison, the yearly budget for the Ministry of Education and Research’s is NoK 55 billion.
    This means that the government has spent just as much on getting 33,000 non-western immigrants to join the labour market or into school in the last six years as they have allocated to day cares, schools, education and research in the state budget for fiscal year 2013

    And this is not even looking at the cost of disproportional criminality that one finds among non-western immigrants in Europe.

    Now it is normal for a welfare state to take care of dependants. But these are typically children and retired people. But for a strong welfare state to exist, it must be backed by a productive working age population. Now of course there is a certain percentage of the working age population that will always be dependants (medically handicapped, etc), but every working age person that not only doesn’t contribute, but also takes, is a double hit to the health of the welfare state.

    Immigration advocates will of course claim it is all down to racism that 50% of these fine people cannot find work. Which just leads to more social upheaval as the old “white guilt” trip gets old after a while. A welfare state requires a high level of social trust; if groups of culturally distinct people are seen as cheaters then the indigenous people will start cutting their own throats by voting against the welfare state. And this is exactly what is happening in many European countries, and it is by design.

    1. MyLessThanPrimeBeef

      Are there more Western immigrants than non-Western immigrants?

      Beyond these Western and non-Western immigrants already relocated, are there more non-Western wannabee-immigrants than Western wannabee-immigrants?

      And why is that so?

      Looking at relatively democratic, relatively wealthy non-Western countries like Singapore or Japan, do we see massive number of people who desire to migrate to America the exceptional?

      Successful economies like Taiwan or Hong Kong, one can understand, because of the ever present threat of China, but also because their survival depends on being a reliable supplier to the empire, thus, keeping informed of the latest trends in the empire and having family members there is important.

      When we do away with neoliberal colonialism, when countries are allowed to developed unmolested, and with help from genuine friends (not the IMF or the World Bank with imperial currency hit-man loans) globally, we will see the end of the current massive waves of immigrants here and white-slave/indentured laborer/serf traders everywhere.

      In that world of international brotherhood, then we might see more people like some (not all, not if you go there for more money to run a fast food franchise division) American migrants to China today – they go because 1) the money is there and 2) they like the culture there. Instead, we have people who are terrified of our materialistic fast food/junk food culture, because they HAVE to come because their homes have been destroyed.

      1. Working Class Nero

        What you are basically saying is that we must reward our elites, who are imposing neo-liberalism on the world, by further punishing the first world working classes one more time, who are not only getting hammered by this very same neo-liberalism, but who now must also have their wages and welfare state cut by taking in any third world migrants who happen to want to come to the first world? Really? Seriously? This is your plan to get our elites to stop imposing neo-liberalism on the world?

        1. MyLessThanPrimeBeef

          I don’t think I said that here, but did in another comment elsewhere in this thread though.

          And I said that to highlight the ironical impossibility of having the entire world here – if X number of immigrants are good, then 100 times more or 1,000 times more should be even better, if they want to come; and if we keep plundering the world, soon, we will have the world knocking, wantig to get in. So, I asked, is there an optimal point? And are we below or above that point?

        2. MyLessThanPrimeBeef

          I am with you. When my response comes out of moderation, you will see we agree, I believe.

    2. EmilianoZ

      All those kronors shouldnt be viewed as wasted. They were people’s wages, language teachers and the like. It could be viewed as stimulus. Aint that better than giving money to banksters?

      The Norwegian language is notoriously difficult to learn. If they had spent that kinda money here in the US teaching English to new immigrants, we’d have loads of new Shakespeares.

      Job discrimination is real, it’s not some invention created to fuel white guilt. For instance, they have done the experiment multiple times in multiple western countries of sending out exactly the same CV with a foreign sounding name and with a good western name. Guess what, the CV with the good western name always received more replies. Of course people with good western white names will never realize their enormous advantage. Even in the highest corporate levels where political correctness is supposed to rule, discrimination is the norm. Yves Smith has written extensively about that:

      1. Working Class Nero

        Yes what you are basically pushing is a sort of “Diversity Keynesianism” that is stimulating the Norwegian economy, which in a limited sense is true. Instead of digging and then filling holes they bring in third world peasants and try over and over again in vain to turn them into semi-Norwegians. Or the police round them up and put them in prison. All this adds to the GDP I suppose. Of course people reject these same arguments about military spending. Surely there are alternative ways to pump money into the economy (green energy, more support for working class families) that would actually be productive instead of paying third world immigrant to repeat endless job training sessions.

        The Norwegian language is NOT notoriously difficult to learn; what you must be referring to is the Finnish language, which is indeed almost impossible to learn fluently as an adult. I learned Swedish (which is basically the same language) within a year of being there despite the fact that everyone wanted to speak English to me. For an English speaker, Swedish (or Norwegian) is one of the easiest languages to learn; certainly much easier than French for example.

        Of course Norwegians are loath to hire immigrants – they undoubtedly chuck out the CV’s with strange names. For example we gave my children my wife’s Scandinavian surname for just this reason; my last name is a bit strange and there was a good chance we would live in Sweden when my kids were born (in the end we didn’t). I wouldn’t call it racism; more like a typical case of localism. But then again that’s pretty much what happens when you move to a foreign country. If I moved to Iran or Namibia they would probably also be just as hesitant to hire me with my funny last name. But that’s just another reason why a bunch of poor immigrants should not be moving to Norway — there will certainly be integration problems and the immigrants will most likely end up on benefits. But the enemies of the welfare state know this well; which is why they insist on pumping European countries full of people unlikely to succeed.

        1. EmilianoZ

          Well, you must be very gifted with languages. I tried to learn German myself (which I suppose is easier than Scandinavian) but got nowhere with it. But Norwegian must be especially difficult for people whose mother tongue is not a Indo-European language. I’ve noticed that even some very intelligent and educated East Asians have trouble with English which must be the easiest Indo-European language.

          Forget about Finnish, it’s one of those strange languages like Basque.

          But Semitic languages must be closer to Indo-European languages than say Chinese.

          1. Working Class Nero

            I’m pretty good at just getting good enough to get by in a language. Norwegian is easier than German; for example there is very little in terms of verb conjugation; the verb stays the same in first, second, and third person as well as singular and plural. The word order is somewhat flexible, you can use the same order as English and it is acceptable but maybe not the most polished way to speak.

            But your point is very strong, learning Norwegian from a Semitic language would be very difficult.

        2. EmilianoZ

          Your translation work from French for NC was outstanding. I thought the text had been written directly in English by a native speaker.

          1. Working Class Nero

            Thanks! It was super difficult and I had never really translated before. I basically had to first do a straight translation into English but keeping the original sentence structure and then I had to polish it several times into a more flowing English.

  18. MyLessThanPrimeBeef

    I would be interested, also, on the effect of immigrants on the home countries they left behind…i.e. from the opposite end of Americano-centrism.

    Yes, they remit imperial money home (God knows how ruthless the empire exacts imperial currency payments from those plundered nations).

    Often, only their strongest, healthiest and most able are acceptable by the empire. Think what staying-at-home, would-be-immigrants could have contributed culturally and to family happiness, except their homes have been destroyed under neoliberalism/neocolonialism.

    Furthermore, we have a responsibility to examine the immigrant issue beyond simply or (I don’t meant ‘and’ here…I mean ‘or’) solely on its economic/monetary impact.

    We might ask, surely Roman slaves contributed economically to the empire…a net positive profit-wise, when we exclude other, humane and moral considerations.

    And we have to ask why there are so many immigrants flocking to the empire. Are we really THAT exceptional? We are SPECIAL, that’s why they come. Is that it? AND they will always come, because we are always special???

    Another question for the curious minded – are immigrants helping to prop up an empire that otherwise would have collapsed or ‘starved (lacking manpower to harvest) into collapse’ under the weight of neoliberalism?

    What would happen to the Technological War Machine in a world without tech-immigrants? That’s another research idea. Would we still have been able to launch rockets and missiles had we not brought in scientists from Peenemunde? Will it slow down our current and future drone development?

    Even monetary-wise/economic-wise, there are puzzles still. If immigrants are positive contributors as far as money is concerned, does it mean more immigrants are better? Is there an optimal point? Are we currently shy of that optimal point or over it? If it’s always good (the curve goes up forever, not local optimal points), would we be inconsistent if we don’t go all the way and let in everyone whose countries have been impoverished/destroyed and who wants to come, thus helps to consolidate imperial victories/conquests?

    What about rich immigrants? Those come with money (to contribute to the empire). Surely they are welcome, even if the money is corrupt…because they generate jobs here (everything is to be analyzed through the lens of economics…for sure an economic/government budget positive)…even if it means our native imperial, neoliberal proxies now have an escape route, and absolutely no incentive to invest in and better their home countries, as they continue to poison, to give just one example here, their fellow countrymen with unsafe food.

  19. Another Gordon

    Re Yves’ footnote.

    Here in the UK the flow of immigrant arrivals, legal and illegal, is such that we are experiencing a population explosion that means that multiple services are working at or beyond capacity so marginal cost is very much the issue. Roads, railways and schools are full to bursting. Hospital Emergency Rooms (‘Accident & Emergency’ this side of the pond) are in breakdown, housing is a critical shortage with new builds running at only about half the rate of legal arrivals, never mind illegal ones. It’s the issue that most directly crystallising the general rage against the system that many feel. Liberals (in both US and UK usage of the term) are nowhere in this debate being thoroughly out of touch with the electorate and in touch only with distinctly flaky theories.

    1. bmeisen

      why do you expect housing construction policy in the uk to correlate with immigration? without citizen registration requirements authorities don’t know how many legal let alone illegal immigrants seek housing. more decisively they don’t know accurately where housing is needed most without citizen registration.

      1. Another Gordon

        I’m not suggesting there is or should be any expectation that housing starts should correlate with immigration, only that a critical shortage of housing is getting rapidly worse.

        As it happens the government doesn’t see it as any part of its role to do some sort of central planning to arrange the necessary amount of building although they do agonise about it and do a lot of grandstanding. They have a strange belief that “the market will sort it” despite abundant evidence to the contrary.

    2. Vatch

      According to Snopes, in the first 3 months of 2006, 70% of the women who gave birth at Parkland Hospital in Dallas, Texas, were illegal immigrants. I don’t know whether there is more recent data about this government run hospital. It is reasonable to believe that in many other U.S. cities, the local government run public hospital bears the brunt of treatment costs for illegal immigrants.

  20. Jack Parsons

    About illegal immigrants and Social Sec: because of INS crackdowns there is a massive amount of identity fraud where immigrants steal the identity of US citizens (presumably with Hispanic names), get jobs as US citizens, and pay into the SSN accounts of the stolen identities. This is all they do with the purloined IDs: pay.

    I’ve seen estimates of over 1% of payroll taxes are supplied by this. After 2007 this dropped precipitously and a lot of immigrants asked their home-country relatives to send money back.

    Yeah, I’d love to find a cite too- it’s just hearsay.

  21. S Brennan

    Maybe in elite circles the issue is non-payment for public services, but every person I have ever talked to on the subject had two major concerns, reduced demand for JOBS, [which has been solved by economists showing that for every immigrant, 2.XX jobs are created by the job fairy] and reduced WAGES, [which has been solved by economists showing that for every immigrant, wages are actually increased by the wage fairy].

    It’s just our good luck not to be mired in the wage and job depression that was the 60’s…before massive immigration and economists who recognized the contributions of the JOB & WAGE fairies. Whew…I feel sorry for my parents…things are SOOO much better now for your average American.

  22. Rosario

    I’m troubled by how ignorant many of the posts are on this comment board. If immigration “troubles” you ask yourself one question: “Why do people immigrate?” Then meditate on it for some time. Most people don’t remove themselves from family and familiarity just for the hell of it. They do so to better themselves and their situation. Therefore, arguing against the ills of immigration merely argues for the gluttony of the privileged. The USA and Western Europe isn’t rich because of their “can do” attitude. They exploit, pressure, and overwhelm their way into prosperity the way every empire has. People want to live in the West so they no longer have to deal with our bullshit in their home countries. If you want them to stop moving to your county stop screwing up theirs. Stop blaming immigration for the ills of the world. It is a tired and myopic “social issue” that is a go-to for people who aren’t willing to critique themselves or their nation.

    1. proximity1

      Rosario, since we so nearly always seem to agree on so much, allow me to intervene with a counterview:

      I think you’re in too great a rush to miss the fact that all you have pointed out can be–and, I believe, is–largely or entirely shared by those same here whose arguments you deplore as anti-immigrant. I think that at bottom there is really a great deal that you and these critics have in common, including a sound humantitarian view of the issues; they, these critics, may indeed have bothered to enquire about why people are immigrating and it’s just that which leads them to find nothing inherently virtuous in immigration per se. There is no reason to lump together those who emigrate out of dire desperation and those who emigrate entirely by choice. We’re used to much, much better here in analysis than a simplistic amalgamation of all sorts of immigrants without regard for the circumstances which provoke their emigration. Personally, I don’t much care whether or even how much desperate migration “helps” the host-nation’s domestic economy–not when that migration is driven by people who otherwise face one or another form of brutal existence in their home countries until they suffer an ugly death and not when these migrants are the very stuff of commercial profit for traffickers in human misery. You bet we’re interested in the desperation at the source of the migrants’ trail. You bet we agree that it’s there rather than at the destination where the best and most humane efforts are to be made–including, not least, a powerful attack upon the profit-driven sources which produce the migration-creating misery in the first place and the commercial traffickers who feed on it in the second place.

      I feel no inclination to apologise for finding an undifferentiated “immigration is an economic net ‘plus’ ” a focus which is not worthy of the high quality of this site’s usual analysis and editorial judgement.

    2. not_me

      It is disconcerting to see US citizens fighting poor foreigners for jobs when they should be fighting for justice wrt to asset ownership. And then, after the US example wrt justice is established, then other countries should follow suit and then most people could stay in their own countries to work, on their OWN land.

      Otherwise, it is wage and debt slaves fighting each other for the right to work for scraps.

  23. not_me

    I’ll just mention that if capital was roughly equally owned by all citizens then ALL citizens would benefit from foreign labor, foreign trade, automation, etc.

    The question is then “Why isn’t capital roughly equally owned?” Part of that answer is this: Government-subsidies for private credit creation.

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