A critique of the Urban Institute's claims of cost free immigration: Early findings confirmed

This text addresses the critiques from the Urban Institute and other immigrant advocacy groups concerning the findings of an earlier study, The Cost of Immigration released in the summer of 1993. That study showed that the public costs associated withimmigrants settling here since 1970 amounted, in 1992, to $42.5 billion more in services and assistance than the $20.2 billion which immigrants paid in taxes (Huddle, 1993). The updated assessment takes into account previously unavailable figures and revises some methods and assumptions used in the earlier work. The updated bottom line is fully consistent with initial findings on immigrant costs for 1992.     

Post-1969 Immigration and the Example of the Insolvency of the Social Security System

Advocates of immigration to save Social Security (S.S.) assume that a pay-as-you-go system will work over the long run. That assumption is not shared by the Social Security Board of Trustees. Reflection shows that it would entail ever-larger new cohorts of immigrants to support those who are retiring, in effect, a Ponzi scheme. In fact, the benefits structure of the S.S. system, which pays out proportionately more to low-wage earners than to high-wage earners relative to their contributions, taken together with the income profile of post-1969 immigrants, means that the more immigration which occurs, the deeper into insolvency the system falls.     

The impact of immigration on the Social Security System

In 1992, the estimated deficit of the entire Social Security System attributable to the foreign born was $2.7 billion (i.e., payments the foreign born payed to and received from the system). Also in 1992, there was an estimated surplus of $19.0 billion for the native born population. During the 1993–2002 decade, the $2.7 billion annual deficit attributable to the current stock of immigrants is projected to grow by about one percent annually in present value terms, reaching $2.98 billion yearly in 2002.The ten-year deficit for the 1993–2002 decade would amount to nearly $30.0 billion in 1993 dollars. In policy terms, the addition of large numbers of less skilled foreign workers to the labor force (which will occur if there is no change in immigration law or enforcement policy) in the hope of bolstering the solvency of the Social Security System would in fact have the opposite effect.