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Immigration, Social Security and Logic at the Washington Post

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Friday, 03 September 2010 05:37

The Post has an oped by Edward Schumacher touting the benefits that undocumented workers have provided for the Social Security system. Many pay taxes without ever collecting benefits.

While his numbers don't seem quite right (he claims that annual payouts would exceed tax revenue over the years 2011-2015 without the $12 billion estimated net contribution from undocumented workers, the trustees report shows taxes exceeded benefits by more than $15 billion in the years 2012-2014), the more important problem is with his logic.

Presumably the point of immigration reform measures would be to normalize the employment situation of immigrants so that the workers who are here are on the books, both paying required taxes and receiving the benefits to which they are entitled, like Social Security. If immigrants get the benefits to which they are entitled, then it will make the finances of Social Security somewhat worse.

In reality this is a trivial issue for the program, which is fully solvent for the next 29 years according to the Congressional Budget Office. An increase in the payroll tax of 0.16 percentage points would fully offset the cost of the payment of benefits to undocumented workers. However, it seems bizarre to advocate that immigrants be brought into the country to pay taxes to a program from which they get no benefit, as Mr. Schumacher seems to be doing.

Comments (7)Add Comment
It's not crazy
written by scott, September 03, 2010 6:07
You should consider problems not just from a macro perspective, but micro as well, not micro, but individual.

I don't disagree with the larger thrust of your article, but one justification of bringing illegals or undocumented workers into the system is two fold. First, it puts documented workers on par with undocumented workers, also, it gets them on the books, recorded so that people such as yourself know what's going on. As a gardener I know this all too well. For instance, they won't work for less than $10/hr. Since the most disadvantaged workers in the system have an actual minimum wage of $10/hr, shouldn't all Americans? This would also provide you ammunition against libertarians who fail to understand human nature and worry about minimum wages being too high. Politics such as it is, minimum wages will never be too high. Unless the magnetic poles shift and suddenly the poor, powerless minimum wage worker suddenly has the most powerful lobby in DC.

The justice of undocumented workers paying taxes they will never see the benefit of is not so terrible, they come here freely (and should be able to.) I'd support we let anyone in who wants in, just please sign in at the door. Obama missed the opportunity when asked about illegals with driver's licenses, should've said, "I don't care who gets a DL, so long as they're insured. I want to kick off an initiative to have bar code scanning of proof of insurance papers that would allow police to scan and know if insurance is current."
Reduce Unemployment Now
written by Paul, September 03, 2010 9:21
Why not temporarily reduce the full retirement age for SS & Medicare to 60 in order to remove Boomers from the job market? Dems would win the votes of many seniors as an added bonus.
...
written by Max, September 03, 2010 9:46
It is my understanding that if you are a legal immigrant, you can bring your elderly parents in, legally, and they can collect social securtiy, without ever having paid a cent into it.
Elderly Parents
written by Ethan, September 03, 2010 10:18
Max:
Any citation to authority?
low wage immigrants and SS
written by pete, September 03, 2010 1:38
Undoubtedly the life expectancy is probably much closer to 65 for undocumented immigrants than for non immigrants, hence, not only do they pay and not collect if they are undocumented, even if they become citizens at some point they likely do not collect much. This is the sad untold part of social security, the embedded racism....yet wonderful for social security system.
An outright attack on working class solidarity
written by Scott ffolliott, September 03, 2010 3:45
It seems to me that the outcome of every commission has been determined when the commission members are chosen. To be sure the commission on debt is really an outright attack on working class solidarity.
less than 1/2 of 1 percent of federal spending
written by mightyzog, September 03, 2010 10:50
16 billion in taxes.
3.5 trillion in spending.

Let's do the math ..
3.5*10^12/1.2*10^10=100/x
solve for x

The 20 million illegal aliens are paying 1/3 of one percent of what the feds spend this year.

Q: Who's the sucker in this scenario? [ A: you ]

Scaring grandma into thinking her social security will bounce in sad.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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