Welfare Reform and Immigration: A Prognosis

By Norman Matloff December 1996

pp. 4-6 in Immigration Review no. 27, Fall/Winter 1996-97

Greta is the admissions coordinator in a federally-subsidized senior citizens housing facility in the San Francisco Bay area. She remarks that, when one of her tenants, an immigrant from Taiwan whom we will call Wen, told her that he had just passed his citizenship test, "I was congratulating and welcoming him, but he laughed and said, 'Now they can't take my [welfare] money away.'"

Wen's action was prompted by the welfare reform law passed by Congress last August, which limits access to various public assistance programs to legal immigrants who have not become naturalized citizens. Indeed, since the legislation was first introduced in November 1993, immigrants have been applying for naturalization in record numbers (the increase in applications is the result of a variety of factors including, but not limited to, the welfare reform proposal), even forcing the Immigration and Naturalization Service (INS) to open new offices to meet the surge in demand.

Wen's rush to naturalize reflects an irony in the immigrant-related provisions of the welfare reform law in that the new law will, for the most part, do nothing to solve the problem which comprised its original motivation — the explosive growth in elderly immigrant usage of Supplemental Security Income (SSI), the nation's designated welfare program for the aged, blind and disabled. Under the old law, immigrants were essentially barred from SSI during their first five years (three years until 1994 when Congress extended it to five years) of residence in the United States. Under the new law, they will be ineligible for SSI until they naturalize or until they have worked and paid taxes in the United States for at least ten years. Since immigrants can apply for naturalization after five years, the new legislation will merely replace one five-year waiting period for another for most immigrant seniors, (i.e., no net change).

Immigrant advocacy groups have claimed that the citizenship test, and particularly the English requirement, are formidable barriers to naturalization for the elderly. But this has not been true in most cases, as the huge number of naturalizations by seniors in the last couple of years demonstrates. Moreover, the INS waives the English and civics testing requirements for certain seniors.

Nevertheless, some seniors will not naturalize and will lose their federal support. Some of these will then turn to county governments for General Assistance, which provides a much smaller monthly check than SSI. The likely result is that they will be forced to, in the words of Bob Kim, executive director of the Korean Community Center of the East Bay in Oakland, "move back [in] with families that don't want them." (Ironically, their families originally petitioned for the seniors' immigration under the family reunification provisions of U.S. immigration law.)

There are indeed problems with immigrant use of welfare. The number of aged immigrant SSI recipients skyrocketed by 580 percent between 1982 and 1994. Numerous interviews with immigrant seniors and social workers reveal that those who have come here in more recent years know in detail about SSI and other welfare programs in the United States before they even apply to immigrate, and that they and their adult children sponsors have advance plans for the seniors to go on welfare. The World Journal, the largest Chinese-language daily in the United States, even runs a semi-regular "Dear Abby"-style advice column on SSI and other welfare benefits.

And there are problems with children and working-age adult immigrants using welfare, as well. For example, economics professor George Borjas of Harvard University has examined both cash welfare, such as SSI and Aid to Families with Dependent Children (AFDC), and noncash services, such as Medicaid (called Medi-Cal in California) and food stamps. He found that, in California, 40 percent of all such welfare dollars goes to immigrant-headed households. Borjas states, "It is not too much of an exaggeration to say that the welfare problem in California is on the verge of becoming an immigrant problem."

As we have seen, the new welfare law will have relatively little effect on SSI expenditures, and the situation with AFDC (now called TANF) is likely to be largely similar. But there will be significant effects on other types of public assistance, notably Medicaid and food stamps.

Take health care. Again, the old law, in effect, barred immigrants from SSI and AFDC for five years and three years, respectively, by designating as the safety net of first resort the immigrants' family members who sponsored them for immigration and agreed to provide financially for them. (This is the so-called "deeming period," in which a sponsor's income is deemed to be available to the immigrant for the purpose of determining welfare eligibility.) But there was no such restriction on Medicaid. By contrast, the new law does bar future immigrants from access to Medicaid for their first five years in the United States (and leaves up to the states whether to continue to provide Medicaid to already-resident immigrants). Thus, in California, for instance, where immigrants have been eligible for Medi-Cal after only one year of residence, there will be a savings of four years of Medi-Cal expenses per recipient for the state and federal levels (Medicaid expenses are shared by the state and federal governments).

Local government officials, however, fear that the costs will simply be shifted to them, as the immigrants increasingly will turn to county-hospital emergency rooms for health care. (The law continues to allow immigrants access to free emergency care.) The degree to which this will occur is not clear. For instance, the prospect of going five years without medical coverage (or of having to rely on one's family to pay for expensive private insurance during that time) may well dissuade many immigrants from coming to the United States in the first place. The Organization of Chinese Americans, one of the most active groups that has lobbied against congressional proposals to reduce welfare eligibility for immigrants, has stated that many Chinese-Americans would not sponsor their family members abroad for immigration if welfare were not available, and presumably this extends to Medicaid, as well. But this effect may be confined largely to elderly would-be immigrants, who are less likely to hold jobs and more likely to need costly medical services.

Most working-age immigrants and their children probably will continue to come to the United States in spite of the medical risks. Thus, the potential magnitude of the fiscal burden on local governments could be crushing. Given that many counties with large immigrant populations, such as San Francisco, Los Angeles and Orange Counties in California, are in quite precarious fiscal condition as it is, there is a very real possibility that some spectacular county bankruptcies could occur.

The new legislation does give state and local governments the option to subject immigrants to a deeming process in determining eligibility for public assistance programs funded by those governments. It appears that states will be forced to exercise this option, though immigrant advocacy groups are sure to fight any such effort. Nevertheless, county officials have indicated that, in practice, it may be difficult to collect reimbursements from the immigrants' sponsors.

Up to this point, I have referred mainly to legal immigration, since most, though by no means all, immigrant usage of welfare occurs in that sector. However, an aspect which has been little noted by the press, but which could become quite significant, is that the new welfare reform law implements nationwide one of the most controversial sections of California's Proposition 187. That measure, passed by voters in 1994 but still pending judicial review, requires state agencies to report to the INS any applicant for public services who cannot document legal residence status in the United States. The welfare law includes a similar requirement for agencies that dispense public assistance. Soon after President Clinton signed the legislation, the head of San Francisco's Health Department held a press conference to announce that her agency would defy the requirement, and since many health-care providers made similar pledges regarding Proposition 187, it is possible that there will be fairly widespread acts of civil disobedience.

The welfare reform law also will have a major impact on the labor market, as the large influx of native-born welfare recipients who are forced off the rolls will have to compete with immigrants for low-skilled jobs. Such jobs are already in short supply, often with five or ten applicants per opening. Indeed, that is why many working-age immigrants take welfare; many are able to find work only sporadically and turn to welfare both to fill in the gaps and to supplement the very low wages they receive. The Economic Policy Institute has warned that the sudden influx of natives forced off the welfare rolls by the new law could erode the already-meager wages in low-skilled jobs.

The implications in terms of competition for these jobs are alarming. Conflict between native-born minorities and immigrants is already at worrisome levels. An Asian/Latino coalition recently filed a lawsuit against the city of Oakland, claiming that city contracts are awarded to African American firms to the detriment of the coalition's constituents. Two years ago, Asian and Latino activists succeeded in pushing through an Oakland redistricting plan that increased their power and reduced that of African Americans. The increased competition between blacks and immigrants for low-skilled jobs could greatly escalate such tensions.

California Sen. Dianne Feinstein has been aware of the fiscal and social problems described here. She even warned of "Armageddon" last year when she called for congressional action to reduce the yearly quotas for legal immigration. At that time, however, a "strange bedfellows" group of lobbyists representing conservative corporate America, liberal ethnic advocates, and even the Christian Coalition, succeeded in defeating such legislation (see Immigration Review, No. 26, p. 1). But a catastrophic event, say the bankruptcy of Los Angeles County, would revive congressional calls to reduce legal immigration levels, and would make such calls much more compelling. Whether Armageddon occurs or not, the consequences of the new welfare law with regard to immigration will indeed be profound, and are sure to maintain — even increase — immigration's status as a hot-button issue in this decade and beyond.

Professor Matloff teaches at the University of California at Davis and writes about immigration and minority issues. A speaker of Chinese, his detailed analysis of welfare use by elderly Chinese immigrants may be accessed at http://heather.cs.ucdavis.edu/ssi.html.