2004 February 11 Wednesday
Welfare Costs Not The Only Costs Of Immigrants

Tyler Cowen responds to some Volokh Conspiracy libertarian-minded readers who wonder whether free immigration into the US could be allowed if only welfare benefits were denied to immigrants.

Can immigration without welfare work? Yes and no. I favor increasing legal immigration, and I have no problem with restricting welfare benefits for new arrivals. That being said, completely open doors and zero welfare won't work. I see two major and related problems:

1. Even with zero welfare, large number of immigrants will show up hoping for something good to happen. Read my MR post on current life in Haiti, for instance.

2. The welfare state, whether you like it or not, exists for a reason. Every wealthy nation has a welfare state, nor has any reforming economy (e.g., Chile, New Zealand) gotten rid of its welfare state. The Eastern Europeans aspire to build new welfare states. For whatever reasons, it has proven politically unacceptable to have large numbers of non-welfare-protected individuals in a society. Calling these people "immigrants," or seeing them with a different skin color, won't make this problem any easier.

I will present an even broader argument than Tyler's in order make a wider point about how we can not escape costs that come from low income and low tax-paying people in our presence, whether they be natives, legal alien immigrant residents, naturalized immigrants, or illegal aliens. What are popularly called "welfare benefits" are just one category of costs to government that comes from having low income folks in our midst. Even if the majority of the public was willing to take a libertarian approach to illegals by totally denying them benefits (and that is not the case) it is not, practically speaking, possible to eliminate all the costs incurred by their presence because, to take just one example, we can't just not hire police to patrol in a neighborhood of poor illegal immigrants or not jail illegals who have committed crimes just because they haven't paid much in taxes. Ditto for their use of roads and many other services of government.

The libertarians who focus on welfare benefits are missing the bigger picture when they focus on the term "welfare". First of all, not all costs to government that come from immigrants come in the form of what most people could consider "welfare spending". The common use of the term "welfare" usually refers to such things as food stamps or subsidized housing or checks handed out to people of working age (or, very notably, their underage children) who are not working or who are making so little that they are considered (at least by many people) in need of government assistance. The 1996 welfare reform act was aimed at toughening eligibility for such things as food stamps, monthly welfare checks, and other sorts of spending that are considered to be what most people would consider to be "welfare". But obviously the government spends more on lower income people than on higher income people in a lot of other ways that are not what would be considered to be part of a welfare benefits package. For instance, here are some costs that absolutely must be borne by government if people from other countries, whether here legally or illegally, are in the US:

  • Investigation of criminal activity committed by legal and illegal aliens.
  • Prosecution of crimes committed.
  • Incarceration of convicted criminals.
  • Deportation-related costs for investigators, courts, incarceration, and paying to transport them to wherever they came from.
  • Physical facilities upkeep for any facilities (e.g. roads, parks) they use.
  • Responding to car accidents caused by foreigners.
  • Intervention in disputes between natives and immigrants or among immigrants.

This list is not meant to be exhaustive by any means. The point is that there are costs to government in handling individuals within US territory. Even if the welfare state could be selectively abolished for immigrants (and I place higher odds on a mass extinction from an asteroid collision) there would still be costs that could not be eliminated that would need to be weighed against what each individual or group was paying.

Before someone goes accusing me of stereotyping illegal aliens as criminals (and I agree that most are not) be aware that not only are illegal aliens making incomes much lower than the US average and paying far less in taxes than the average American but also the foreign born are 30% of the US federal prison population. (and if anyone knows what percentage of them are legal versus illegal residents please post that info in the comments section) By contrast, foreign born are about 10% of the US population as a whole. So their presence in prisons is far in excess of their presence in the US population as a whole. That means the native born are paying more in taxes for this and also more by being victimized by criminals at a higher rate than would otherwise be the case if there were fewer foreign born and if those people were more carefully chosen by using tougher entry criteria.

Even if conventional welfare payments could be withheld from legal aliens there are other forms of costs which we can reasonably expect that the citizenry of this country will insist government pay for when the costs are caused by illegal or legal immigrants:

  • Cost of emergency room medical care. Any poor person, native, legal alien, or illegal alien is going to be treated in emergency wards.
  • Cost of post-emergency room medical care for those in accidents. Libertarian open borders advocates should not expect that there is any chance that the US government will decide that illegal aliens should not be fully treated for injuries.
  • Medical care for US-born (and hence US citizens) babies of legal and illegal aliens. This is a huge cost because the immigrant parents are lack medical insurance at a much higher rate than the population as a whole with Hispanics lacking medical insurance at two and a half times the rate of whites..
  • Education for the US citizens born to aliens.
  • Various welfare benefits that US citizens born of aliens are entitled to.
  • An increase in population that necessitates spending to expand various government-funded capital infrastructure such as highways and government buildings.

Again, the above is not an exhaustive list. These are costs we can't get rid of. What the libertarian-minded folks who are debating immigration ought to be focusing on is the question of total costs and benefits likely to accrue from allowing each person to enter the US. If we let in lots of people who are, statistically speaking, more likely to generate costs and less likely to earn large incomes that generate lots of tax revenue then their presence here ends up generating more costs for everyone else.

Another form of cost that is not well appreciated is environmental. Take California cities like Fresno and Bakersfield which are experiencing large population growth because of immigration. That causes more cars to be driven and more industrial activity and hence more pollution. The cost of controlling the pollution goes up even faster. To illustrate why that happens consider this hypothetical: If a mllion cars are on the road and their pollution needed to be reduced by, say, 90% to make the air quality acceptable then let us suppose reducing their emissions 90% costs, say, $100 per car or $100 million dollars. But suppose instead there were 2 million cars on the road. Then the pollution per car would need to be reduced by 95% to achieve the same total allowable total emissions. Well, the cost per car would go up. So the total cost would not just double with the doubling in the population. If the cost per car to reduce pollution by 95% goes up to $150 then the pollution control cost would triple even though the population only doubled. The same holds true for electricity generation plants and other sources of pollution. Costs of pollution control per unit of economic output goes up when the amount of allowable pollution per unit output goes down.

A completely free immigration policy with complete open borders would bring in literally hundreds of millions of immigrants. Most would be low-skilled. In fact, a total Open Borders policy would cause many existing US citizens to flee the country. An Open Borders policy would cause hundreds of millions of poior people to enter the United States. Such an influx of low-skilled workers would put such a huge burden on US citizens that not only would higher skilled workers opt not to come to the US but many high skilled US citizen workers in the US would try to emigrate to go to countries that have more selective admissions criteria.

Trying to deport illegal aliens has costs as mentioned above. Currently many people caught at the US-Mexican border who are not from Mexico are immediately released because the US government agency that deports illegal aliens does not have enough money in its budget to pay for detention, legal processing, and travel costs for sending illegals back to the countries of their origin.

David Venturella, assistant director of Immigration and Customs Enforcement, acknowledges that the ''catch and release'' policy has raised security concerns and even angered federal agents.

He says the policy is driven by the lack of federal money to rent space in local jails to detain illegal aliens. The U.S. government pays localities about $54 a day to house each detainee, and in January housed more than 22,600 illegal aliens -- above its budgeted capacity of 19,444.

Venturella, who oversees the detention and removal of illegals, says that Homeland Security officials are asking Congress to boost the government's $680 million budget for detaining and deporting illegal immigrants. The budget has been static for two years.

But deportation costs are dwarfed by immigrant medical care costs alone.

Share |      By Randall Parker at 2004 February 11 01:33 AM  Immigration Economics

tom beta 2 said at February 11, 2004 7:01 AM:
Before someone goes accusing me of stereotyping illegal aliens as criminals (and I agree that most are not) ...

Actually, illegal aliens are criminals, hence the illegal bit there. I mean, it is a crime to enter the US illegally, isn't it?

But, I guess I understand what you're saying if you meant that most illegal aliens are unlikely to commit other crimes once in the country.

Harriet said at March 17, 2004 8:27 PM:

You can add to your list that many families of handicapped children come to the US because their countries do not provide care and schooling for them. Special Education is expensive including one-on-one aides or health care aids in some cases, smaller classes with teachers and assistance. Also in California and I am sure in other states, we provide OT, PT, Speech Therapy, Adaptive PE, etc. We provide any special equipment needed for education including computers, scanners,special access equipment, augmentative speech units,etc. if necessary. If the child is under a certain income, we also provide any equipment they need such as wheelchairs (including electic ones) with lap trays, braces, and walkers to name a few more things that usually are not included in welfare. Then the children also can receive SSI because they are handicapped. So one can see every aspect of life not just the food and housing costs the tax payers money.

jj said at August 2, 2005 7:52 PM:

I suspect that the man that hit my car head on with an 18 wheeler was an illegal. He gave the town cops a bogus insurance company name, had his breaks on his rig fixed with in 4 hours and left MA for his home state of TX. Within 2 days his address was abandoned, he sold his personal vehical and has since disappeared. I was born in America don't i have any rights? It took my savings of 5 thousand dollars to replace the car,never mind the medical expences ( i was not critically hurt but the pain is still residual even after more than a year) and he is off scott free,enjoying his life while i cringe with back pain doing the job i did painlessly before the accident. the company he worked for was a fly by night and the supposed boss never responds to letters or phone calls. Arn't the town cops guilty of neglect to let an uninsured driver go after he almost killed somebody and it was his fault? I have a lawyer that in over a year has gotten no where, and my insurance would not help with the claim because i did not have full coverage. I never thought it was bad to just let people come to America, now i do, because i can't be the only person this situation has happen to.

Danielle De Lano said at November 14, 2005 1:17 PM:

i think that instead of putting these illegals in jail, we should just deport them as soon as they are in authorities hands.

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