On a comment thread on Appletree, Stram is inadvertently giving a good reason why illegal immigration is not a serious economic problem in the US. He links to a factsheet produced by the Center for Immigration Studies, which claims to be based on data from the US Census Bureau.
[Link] Households headed by illegal aliens imposed more than $26.3 billion in costs on the federal government in 2002 and paid only $16 billion in taxes, creating a net fiscal deficit of almost $10.4 billion, or $2,700 per illegal household.
With nearly two-thirds of illegal aliens lacking a high school degree, the primary reason they create a fiscal deficit is their low education levels and resulting low incomes and tax payments, not their legal status or heavy use of most social services.
Many of the costs associated with illegals are due to their American-born children, who are awarded U.S. citizenship at birth. Thus, greater efforts at barring illegals from federal programs will not reduce costs because their citizen children can continue to access them.
If illegal aliens were given amnesty and began to pay taxes and use services like households headed by legal immigrants with the same education levels, the estimated annual net fiscal deficit would increase from $2,700 per household to nearly $7,700, for a total net cost of $29 billion.
Costs increase dramatically because unskilled immigrants with legal status — what most illegal aliens would become — can access government programs, but still tend to make very modest tax payments.
The fact that legal immigrants with few years of schooling are a large fiscal drain does not mean that legal immigrants overall are a net drain — many legal immigrants are highly skilled.
The vast majority of illegals hold jobs. Thus the fiscal deficit they create for the federal government is not the result of an unwillingness to work.
One of the advantages of not listing your methodology anywhere in sight is that I won’t be able to rip it to shreds if it’s shoddy (which it usually is). But let’s grant that the methodology is sound and focus on the consequences.
$29 billion is 0.25% of the United States’ GDP. This compares with about $100 billion wasted every year on Iraq and $1 trillion wasted every year on private health care (incidentally, Ezra has a really good series about Ron Wyden’s universal health care proposal, which is slated to shave $150 billion per year in costs).
In fact, illegal immigrants who are offered citizenship will likely vote mostly for the Democrats, who are better than the Republicans at controlling government spending; as such, the political effects of amnesty may well be more than enough to compensate for additional welfare payments.
And finally, the amnesty scenarios only compare illegal immigrants to legal immigrants of similar levels of education, controlling for whether the head of household is from Mexico or another country. Legalization will make it easier for immigrants to acquire more education, for example by attending local colleges, and increase intergenerational income mobility, which will make the immigrants’ children more likely to be educated and have high enough incomes to be a net financial gain to the government.