Is immigration bad for the deficit?

Demonstrators seeking change in immigration policy march on May Day in Los Angeles, California, May 01, 2013. Some 2,000 demonstrators marched in May Day rallies calling for immigration reform, a key issue just north of the U.S.-Mexican border.

The Senate Judiciary Committee starts weighing a new immigration bill this week, and one of the biggest worries is over costs. Opponents say legalizing undocumented immigrants will put added strain on already overburdened government safety net programs like Social Security and Medicare.

The argument over the budget costs of legalizing undocumented workers helped derail the last effort at immigration reform in 2007. And this time around, opponents of reform are trotting out the same boogey man.

But there's reason to think their claims are exaggerated.  

First, Congress is likely to exempt undocumented workers and their families from federal benefits while the seek citizenship -- a process expected to last at least 13 years. Meanwhile, they'd be expected to pay into Social Security and Medicare. On balance they'd actually be a net plus for the federal budget, at least in the short term.

Longer term, evidence suggests that workers who become legal are more productive and command higher wages. That's because they're free to pursue better employment opportunities, including starting their own business. After President Reagan gave legal status to three million workers in 1986, their wages increased by as much as 15 percent.

Higher productivity and higher wages translate into more tax payments and less need for social services.

We also have boatloads of evidence comparing new immigrants to native-born Americans in terms of what they contribute and what they cost society. And here too the results are encouraging. New immigrants are less likely than the native born to use government safety net programs.

New immigrants also tend to work until an older age than native-born Americans. That means less of a burden on Social Security and Medicare.

And the children of new immigrants earn more college degrees than the children of native-born - meaning higher wages, more tax payments, and less dependence on government programs.

The reason for these differences is that new immigrants are by definition ambitious. They wouldn't have borne all the risks and hardships of immigrating to the United States if they weren't.

About the author

Robert Reich is chancellor's professor of public policy at the University of California, Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton.

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