Heritage Study

05.09.13

You Can't Wish Away the Facts About Immigration Amnesty

The Heritage Foundation this week released a study estimating that the Senate immigration bill will cost taxpayers $6 trillion over the next 50 years, the expected life cycle of the persons legalized by the path to citizenship.

The study has touched off a tremendous controversy - and what's most notable about the onslaught is how brazenly it ignores the study's contents.

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The New York Times today, for example, has a big story impeaching the credibility of one of the study's co-authors, Jason Richwine.

“Whether you agree or disagree with the Heritage study, what their co-author believes is downright insulting and shameful,” said Ali Noorani, executive director of the National Immigration Forum, a group that has mobilized support for the bill. “Heritage has really become an outlier. The rest of the country is having a 21st-century conversation about immigration reform, and Heritage is caught in 1800. I really think their entire credibility is in question.”

Sorry, no. If you agree with the Heritage study - and so far I have not heard any good reason to doubt it - the results are so important and explosive that the coauthor's other views dwindle into a mere footnote to history. It's not some personal quirk of Jason Richwine's that has caused him to doubt that the legalized immigrants will rapidly raise their skill levels or education standards. The most authoritative study of Mexican immigration over time has found exactly the same thing. Edward Teles and Velma Ortiz write from the left in their book, Generations of Exclusion. They indict American society, discriminatory educational attitudes, and other "exclusionary" forces - but they have the goods that Mexican-American inter-generational progress has slowed to a stall. I would follow Mark Krikorian of the Center for Immigration Studies in putting the blame on the new American labor market and the reduction in blue-collar wages in a post-industrial economy.

People on the left get this point when they scoff at the imputed Tea Party slogan, "Keep your government hands off my Medicare." Why do they forget the point when they speak of immigration?

But whatever the reason, the facts are the facts - and the math is the math.

In the period from World War II until about 1980, immigrants arrived with higher skill levels than the native-born and within a decade of arrival earned higher wages. This tendency still holds in Canada, where policy emphasizes skills. It has ceased to be true in the United States since 1980. Some shrug and say that the immigrants who arrived before 1913 also had low skills. But the state of data does not permit useful comparison of the skill levels of pre-1913 immigrants to the native-born (who were not super well-educated either, let's remember) - and in any case, an agrarian-industrial economy offers very different opportunities to the unskilled than our credential-driven post-industrial service-financial-healthcare economy.

Unless you posit that the newly legalized immigrants will dramatically outperform the existing immigrant population, you will reach a result very like that of the Heritage Foundation: that the taxes paid by the newly legalized will not begin to equal the costs of their Medicare, Medicaid, Social Security, and other benefits.

(The Wall Street Journal is trumpeting a letter from the Social Security Administration declaring that the Senate bill will have positive effects on the solvency of the retirement program. But in a really shabby piece of misleading reporting, the Journal's lead paragraph refers to the program's "long-term solvency" and waits until paragraph four to note that this "long term" extends only to the program's next ten years  - long before the vast majority of the newly legalized will become eligible for benefits! The SSA promises in its letter to provide a 75-year accounting somewhat later. I can well imagine Senator Rubio urging them, "take your time, take your time.")

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Let me put this in boldface: Heritage's cost estimates are driven not primarily by welfare, but by healthcare. Every newly legalized immigrant, no matter how ambitious and hard-working, will get old. When he or she gets old, he or she will qualify for Medicare. Medicare is very, very expensive, and getting more expensive all the time. Fewer and fewer Americans - whatever their ethnic origin - pay enough in taxes to cover their predicted future health care costs. Inevitably, Medicare is becoming a more redistributionist program. People on the left get this point when they scoff at the imputed Tea Party slogan, "Keep your government hands off my Medicare." Why do they forget the point when they speak of immigration?

Ryan Lizza - a friend and esteemed political reporter - misses the point in a different way in the New Yorker.

Instead, something very different happened: Republican officials and conservative writers tore the report to shreds, criticizing it for its shoddy analysis and intellectual dishonesty.

Larry Kudlow, a cable-news host, asked one of the authors of the study, “Did you calculate economic benefits from immigrants?” He answered that he had not.

I'm sorry, but Kudlow's question is a trick question, and I truly marvel that Ryan missed the trick.

Look at the very first page of the study, the one on which the title appears: "The Fiscal Cost of Unlawful Immigrants and Amnesty to the U.S. Taxpayer." Key word: "fiscal."

The Heritage study looked neither at the economic benefits nor the economic detriments of the Senate bill. It didn't ask, will this bill expand national output and (if so) by how much.

Many experts have studied the economic effects of present US immigration policy over the years, and the findings are generally consistent: present policy helps the economy a little, not very much, and most of those benefits flow to the immigrants themselves. From the point of view of most native-born Americans, the economic benefits of immigration are negligible; and for a substantial number, harmful.

When the subject is immigration, all critical judgment flies out the window.

Fiscal measures, by contrast, look at the effects - not on the economy as a whole - but on the revenues and expenditures of government.

And it's been a notorious fact for years that immigration's modest economic benefits are offset by very large fiscal costs.

State governments have complained for years about those costs. Even illegal immigrants use hospitals, prisons, roads and schools. Once legalized, immigrants will qualify for dozens of other programs, including the big entitlements.

When Kudlow asks about economic effects - when Cato demands "dynamic scoring" - they are in effect urging that Heritage add to its fiscal calculation a "magic asterisk": insert an assumption about economic growth so big and dramatic that it will offset the normal calculation of fiscal effect. If the discussion were of tax cuts, media outlets would treat these calls for magic asterisks with appropriate scorn. Again, when the subject is immigration, all critical judgment flies out the window.

Any stick will do to beat a dog, as the saying goes, and when you begin with a fervent a priori commitment to a policy, you don't ask too many questions about the methods used to shoot down objections. Nevertheless, when you find yourself typing sentences like the following, you need to stare hard at your own fingers.

Haley Barbour, the former governor of Mississippi, said the report was “a political document” and “not a very serious analysis.”

I cherish and enjoy Haley Barbour. But he'd be the first to smile at the hilarious irony of Washington's master lobbyist being taken at face value when he dismisses information inconvenient to his clients as a "political document."

A lot of people come to these immigration debates with strong prior ideological commitments. Jason Richwine's aren't very attractive, but neither are Grover Norquist's. The apologists for plutocracy are content this week to use anti-racism as their debating tool. But a tool is all it is.