Selected news coverage of
High Cost of Cheap Labor
Illegal Immigration and the Federal Budget
By Steven A. Camarota
The Washington Times
The Los Angeles Times
Illegals' costs outpace tax payments, report says
By Jerry Seper
The Washington Times, August 26, 2004
U.S. households headed by illegal aliens used $26.3 billion in government
services during 2002 but paid only $16 billion in taxes, an annual cost to
taxpayers of $10 billion, says a report issued yesterday by the Center for
Immigration Studies (CIS).
The report, based on U.S. Census Bureau data, also said if illegal aliens now in
the country -- estimated at between 8 million and 12 million -- received amnesty,
paid taxes and used services similar to households headed by legal immigrants,
the estimated net deficit would increase from $10 billion to more than $29
'Many native-born Americans observe that their ancestors came to America and did
not place great demands on government services,' said Steven A. Camarota, CIS
director of research and the report's author. 'Perhaps this is true, but the
size and scope of government were dramatically smaller during the last great
wave of immigration.
'Not just means tested programs, but expenditures on everything from public
schools to roads were only a fraction of what they are today,' he said. 'The
arrival of unskilled immigrants in the past did not have the negative fiscal
implications that it does today.'
The 48-page report said among the largest government costs were Medicaid at $2.5
billion; treatment for the uninsured, $2.2 billion; food assistance programs and
school lunches, $1.9 billion; the federal prison and court system, $1.6 billion;
and federal aid to schools, $1.4 billion.
Katherine Culliton, spokeswoman for the Mexican American Legal Defense and
Educational Fund in Washington, D.C., disputed the report, saying many segments
of the U.S. economy would collapse without the labor provided by illegal aliens
in occupations such as agriculture, food service, construction and health care.
She also said a 1997 study by economists at Harvard and Princeton universities
indicated that immigrants paid significantly more in taxes than noted in the CIS
report and that the migrant population was essential because of the aging U.S.
The CIS report said the estimates were only for the federal government, but
costs at the state and local levels were likely to be significant. It said costs
to the government of unskilled immigrants 'simply reflect the nature of the
modern American economy,' and cannot be avoided if the country's immigration
policies remain unchanged.
With nearly two-third of illegals in the United States lacking a high school
diploma, the report said, the primary reasons they cause a deficit are low
education levels and resulting low incomes and tax payments.
Amnesty programs increase costs because illegal aliens still would be largely
unskilled, and their tax payments would continue to be modest, but once
legalized they could access many more government services, the report said.
In January, President Bush proposed a guest-worker program that would allow
millions of illegal aliens in the country to remain if they have jobs and apply
as guest workers. Under the proposal, the aliens could stay for an undetermined
number of renewable three-year periods, after which they could seek permanent
The program is supported in the Republican Party platform draft for the upcoming
convention, despite opposition within the party.
The report said if the United States is serious about avoiding the fiscal costs
of illegal immigration, the 'only real option' is to enforce the country's
existing immigration law and reduce the number of illegal aliens in the United
But the report said policy-makers can expect strong opposition from special
interest groups, especially ethnic advocacy organizations and those elements of
the business community that do not want to invest in labor-saving devices or pay
better salaries, but want access to large numbers of cheap, unskilled workers.
Study Says Illegal Immigrants Cost U.S. $10 Billion a Year; Analysis Is Disputed
By Ricardo Alonso-Zaldivar
Los Angeles Times, August 26, 2004
WASHINGTON -- Illegal immigrants cost the federal government more than $10
billion a year, and a program to legalize them would nearly triple the figure, a
study released Wednesday said.
The analysis by the Center for Immigration Studies, which opposes efforts to
legalize the estimated 8 million to 12 million undocumented immigrants in the
United States, comes as Republicans are bracing for a fight over immigration at
their convention next week in New York.
Some conservatives are pushing for language in the GOP platform that strongly
opposes amnesty for illegal immigrants. But business-oriented Republicans want
to significantly loosen immigration restrictions.
In the middle is President Bush, who has proposed a guest-worker program that
would grant temporary legal status to undocumented immigrants, the majority of
whom are from Mexico.
'The fundamental problem is that the modern American economy is based on skills,
and that makes it very difficult to bring unskilled workers in and not sock
taxpayers with a huge cost,' said political scientist Steven A. Camarota,
research director at the Washington center and author of the report.
'The fiscal impact of a legalization program needs to be an important
consideration,' he said.
Other researchers challenged some of the study's assumptions about what illegal
immigrants cost the government.
Based on census data for 2002, the report compared households headed by
undocumented immigrants with those headed by citizens and legal residents.
Federal benefits for U.S.-born children of undocumented immigrants were counted
as a cost of illegal migration.
The study included findings that ran counter to commonly held stereotypes. For
example, it concluded that illegal immigrants did not constitute a significant
drain on welfare programs, receiving much less in social services than citizens
and legal residents.
However, it found that undocumented immigrants paid nearly 75% less per
household in federal taxes, on average. Some work off the books, but the
majority who pay taxes are unskilled, low-wage workers with little income tax
'The primary reason they create a fiscal deficit is their low education levels
and resulting low incomes and tax payments, not their ... heavy use of most social
services,' the study said. '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.'
The study estimated the costs of illegal immigration by calculating the
migrants' share of specific federal programs, among them Medicaid, food
assistance and subsidies for hospitals that treat uninsured patients. It also
assigned to illegal immigrants a proportional share of general government costs.
The report found that federal programs for the elderly benefited from illegal
immigration. Social Security and Medicare reap a $7-billion annual windfall from
payroll taxes paid by undocumented workers. That accounts for about 4% of the
total annual surplus of the two programs.
But the balance sheet may shift in the other direction. Under a recent
agreement, retirees in Mexico will be able to claim credit for taxes paid into
Social Security while they worked in the United States.
Legalizing undocumented immigrants would bring them out of the underground
economy and increase the amount they pay into Treasury coffers. But it could
also make them eligible for more government benefits.
The study estimated that paying for added benefits would swamp any increase in
tax collections, increasing the net cost to the federal government to $29
billion a year.
A leading immigration researcher challenged the study.
Jeffrey S. Passel, a demographer at the Urban Institute, a Washington nonprofit
economic and social policy research organization, said a significant share of
the costs attributed to illegal immigrants represented general expenses on
domestic programs. The government would incur the costs -- for such things as
building roads and paying bureaucrats' salaries -- with or without the presence
of undocumented workers.
'Most of that money is not money that would be saved if you could magically make
these people disappear,' Passel said.
Illegal immigration costing U.S. taxpayers
By Shihoko Goto
United Press International, August 25,
WASHINGTON (UPI) -- Lawmakers continue to battle on whether or not to loosen
immigration laws, particularly on the possibility of allowing illegal immigrants
from Mexico to stay legitimately and potentially become U.S. citizens.
But while the politically sensitive debate continues, some analysts argue that
the cost to care for illegal immigrants far outweighs the potential benefits
they bring to the table. The Center for Immigration Studies, a Washington
think-tank, for one argued Wednesday that unlawful aliens are draining the
federal government's coffers.
According to the center's latest study on the cost of illegal immigration,
families that are in the United States used $10.4 billion more in government
services than they paid in taxes in 2002.
While the precise cost of illegal immigrants on the national economy is
arguable, it is clear that under the current system, even those who are in the
country unlawfully can and often do make use of federal programs such as food
assistance, healthcare, and access to public education.
But while proponents of allowing illegal workers to be allowed to stay in the
country argue that the U.S. economy would not function without such laborers,
opponents say that such a move would actually prove to be a greater burden for
Of the 9 million illegal immigrants in the United States in 2003, two-thirds of
them did not even have a high school degree, according to the Center for
'If illegal aliens were legalized and began to pay taxes and use services like
legal immigrants with the same education levels, the estimated annual fiscal
deficit at the federal level would increase from $2,700 per household to nearly
$7,700, for a total federal deficit of $29 billion,' said Steven Camarota,
director of research at the center.
Moreover, 17 percent of prisoners in the United States are illegal aliens, even
though they make up only 3 percent of the total population, thus straining the
government budget still further, Camarota added. He also pointed out that many
illegal immigrants have children in the United States, who automatically become
citizens, and parents can and often do receive benefits that comes with
citizenship through their offspring.
'And that's a strain,' Camarota said.
Yet it is clear that both businesses and consumers benefit from illegal
laborers, especially through those who will take on jobs at or under minimum
wage. Moreover, the question of immigration is one where conservative
businessmen and liberal activists can find common ground, as the former could
benefit from cheaper workers, while the latter calls for a more humane approach
to migration flows.
From a purely economic perspective, there is no doubt that consumers can benefit
from illegal labor as products and services are often significantly cheaper in
the United States than in Europe precisely because so much of the work is done
by illegal workers, said Lindsay Lowell, director of policy studies at the
Institute for the Study of International Migration at Georgetown University.
'But taxpayers are subsidizing employers' as those who take on low-paying jobs
are forced to depend more on state welfare, Lowell said. As a result, while
grocery bills and leisure outings might be cheaper in the United States, thanks
to cheaper labor costs, the middle class in particular has to pay the price of
depending so much on illegal laborers, Lowell said.
As a result, taxpayers have to pay the price of illegal immigrants sooner or
later, Lowell added.
'But we have a choice' on whether or not to benefit from cheaper costs in the
near-term and pay more in taxes, or simply to bite the bullet and pay higher
prices in the first place, said Robert Rector, senior research fellow in
domestic and economic policy studies at the Heritage Foundation.
Rector also argued that illegal immigration hurt lower-wage income earners in
the United States, as many employers sought to fill blue-collar jobs with
cheaper workers, regardless of their legal status.
And while advocacy groups for illegal immigrants would argue that those workers
provide essential services, Rector said that 'if they were so essential,
employers would pay more' to have the same things done once illegal workers were
no longer available for the jobs.
Still, even opponents to legalizing unlawful aliens acknowledge that they not
only provide much-needed services to the U.S. economy, but according to the
Center for Immigration Studies, the average illegal household pays about $4,200
a year in federal taxes, for a total of nearly $16 billion.
'However, they impose annual costs of more than $26.3 billion, or about $6,950
per illegal household,' said the center's Camarota.
He also said that while the United States is a country where almost everyone can
trace their roots back to an immigrant, the situation only a few decades ago is
very different from the current situation.
'The fiscal realities of modern America are very different now...immigration did
not have the negative fiscal implication like it does today,' as illegal aliens
continue to put an ever-increasing burden on the government's coffers, Camarota
Lou Dobbs Tonight
CNN, August 25, 2004
. . .
DOBBS: In 'Broken Borders' tonight, a study released today details the financial
burden that illegal aliens are putting on this nation's taxpayers. It's
conclusions are stunning, yet simple: Illegal aliens are draining much of the
nation's finances, and stronger enforcement of immigration laws is the only
practical solution. Casey Wian reports from Los Angeles.
CASEY WIAN, CNN CORRESPONDENT (voice-over): It's a question that is central to
the debate over what to do about the 10 million illegal aliens in the United
States. Are they an economic benefit? The answer is a resounding no, according
to a detailed analysis by the Center for Immigration Studies. Titled 'The High
Cost of Cheap Labor,' it calculates the taxes paid by illegal aliens and the
costs they impose. It concludes that illegal aliens take more than $10 billion a
year out of the pockets of taxpayers or $2700 per illegal household.
STEVEN CAMAROTA, CENTER FOR IMMIGRATION STUDIES: 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
payment, not their legal status or even particularly heavy use of most social
services. Nor is it caused by an unwillingness to work, a vast majority of adult
illegals, in fact, hold jobs.
WIAN: Among the report's startling findings, illegal aliens make up about 17
percent of federal prison population, even though they're only 3 percent of the
general population. And they consume 13 percent of federal spending on medical
care for the uninsured.
The study also estimates the financial impact of an amnesty program, like those
proposed by both President Bush and Senator Kerry. The taxpayer burden would
nearly triple to $29 billion a year. That's more the federal government's entire
budget for the Department of Homeland Security.
ROBERT RECTOR, HERITAGE FOUNDATION: A society which has an advanced welfare
state for the economically disadvantaged will incur considerable cost when it
imports large numbers of low skilled individuals.
WIAN: The study concludes the only practical way to avoid those costs is to
enforce the law, and reduce the number of illegal aliens in this country. And
the centerpiece of that strategy should be cracking down on employers who
continue to hire illegal aliens.
WIAN: We contacted the offices of several members of the Senate and Congress who
are sponsoring illegal alien amnesty bills, none were available to discuss the
study. Also the study did not calculate the impact of illegal aliens on state
and local governments, but the authors say those are probably even higher --
DOBBS: The study is remarkable in that it clearly sets out that the taxpayer in
this country is paying for those companies and businesses and homeowners who are
hiring illegal aliens and who get all the benefits of illegal alien labor while
the taxpayer pays all of the costs. Casey Wian thank you -- yes, go ahead,
. . .
Illegal immigration is fiscal drain, study says
By Michael Doyle
The Sacramento Bee, August 26, 2004
WASHINGTON -- Illegal immigrants use billions of dollars more in federal
services than they pay in federal taxes, a study released Wednesday says.
The result in 2002 was a $10.4 billion net drain on the federal treasury,
according to the study conducted by a think tank that wants to curtail
immigration levels. Granting illegal immigrants legal status will increase the
costs, the analysts contend.
'This is not due to laziness on the part of illegal aliens,' said study author
Steven Camarota, of the Center for Immigration Studies. 'It simply reflects the
low educational status of illegal aliens, and hence their low incomes.'
Using census data and various economic assumptions, Camarota concluded the
average household headed by an illegal immigrant paid $4,212 in federal taxes in
2002. The average household accounted for $6,949 in federal services.
Those federal costs span a wide range, including medical care, food assistance
and school aid. They also include imprisonment, as 17 percent of federal
prisoners nationwide are illegal immigrants.
Immigrant advocates are skeptical about the center's work and the policy agenda
that motivates it. Precise numbers, moreover, incite serious debate. For
instance, some analysts question whether the study overstates some costs and
understates some benefits.
'Wouldn't the costs of not educating the (illegal immigrant) child, or not
treating the child, be even greater?' asked B. Lindsay Lowell of Georgetown
University's Institute for the Study of International Migration.
Still, the political timing appears apt for the study that Camarota billed as
one of the first to estimate the cost of illegal immigration on the federal
budget. Congress is weighing an immigration bill that could grant legal status
to several hundred thousand illegal immigrants now working on farms.
The new study concluded that while tax revenues would significantly increase if
illegal immigrants were legalized, this would not offset a corresponding
increase in costs for services. For instance, the newly legalized residents
would start lining up for their share of the Earned Income Tax Credit.
'The exact amount of the net fiscal cost should probably not be taken to the
bank,' Lowell said. 'But there's a shadow side to the population that needs to
Other studies have focused on the overall costs that illegal immigrants impose
on state and local governments. These have been particularly relevant in
California, home to an estimated one-third of the roughly 9 million illegal
This latest study acknowledges that 'many of the preconceived notions about the
fiscal impact of illegal households turn out to be inaccurate.'
For instance, the analysts noted, about 55 percent of illegal immigrant
households are currently paying taxes. Illegal immigrants, moreover, were found
to make relatively low use of welfare cash assistance, while paying into the
Social Security and Medicare programs.
Other studies have previously emphasized the longer-term economic benefits that
immigrants may bring. The National Academy of Sciences, in particular, observed
in 1997 that immigrants increase the supply of labor and help produce new goods
and services at relatively lower cost.
Illegal Immigrants' Cost to Government Studied
By Mary Fitzgerald
The Washington Post, August 26, 2004; Pg. A21
Illegal Immigrants Cost U.S. $10 Billion - Study
By Alan Elsner
Reuters, August 25, 2004
Legalized immigrants would be big drain on public, report says
By Jerry Kammer, Copley News Service
The San Diego (CA) Union-Tribune, August 26, 2004
Group's study says illegals not paying their way
Taxes gleaned from undocumented workers said to be less than cost of services
By Tyche Hendricks
The San Francisco Chronicle, August 26, 2004
Illegal immigrants' impact disputed
By Jack Chang
The Contra Costa (CA) Times, August 26, 2004
Study: Illegal immigrants a burden
Report contrasts federal taxes paid to services used
By Teresa Borden
The Atlanta Journal-Constitution, August 26, 2004
Illegal migration costly, research group's report says
By Sergio Bustos
The Arizona Republic (Phoenix), August 25, 2004
Study: Illegals cost U.S. billions
By Lisa Friedman
Los Angeles Daily News, August 27, 2004
Study: Illegals cost U.S. $10 billion a year
If Bush amnesty program were implemented, figure would triple
WorldNetDaily.com, August 25, 2004
N.C. immigrant population rises
By Erin Gibson
The Daily Tar Heel (Chapel Hill, NC), August 30, 2004