Immigration Is Destroying the Welfare State

January 18, 2018
By Spencer P. Morrison

Many Democrats see their party as the working man's choice. They want to soften capitalism's rougher edges, humanize big industry, and give the average American a fighting chance. One may (and should) disagree with their methods, but their intentions are good and their beliefs sincere.

That is not how the party elites feel. Their mantra is "open trade and open borders," as Hillary Clinton told Wall Street bankers in a private speech. Recall how the Democrats supported President Obama's Trans-Pacific Partnership, a "free trade" deal that would have gutted American industries. And it is Democrats who oppose President Trump's attempts to stop illegal immigration, which hurts America's poor.

The Democrats don't care about American workers. They care about winning elections.

At this point, the chorus of "progressive" rhetoric reaches a fever pitch. "But we need immigrants to support the welfare state! We need immigrants to pay for Social Security!" Saying it does not make it so.

In truth, immigration is destroying the welfare state, in America and throughout the West. This is happening because immigrants receive more in benefits than they pay in taxes. Of course, this is not true for every immigrant – some never collect government handouts – but it is true for the overall immigrant population. Studies from across the Western world prove this point.

A recent and comprehensive study from the National Academies of Sciences, Engineering, and Medicine found that although immigration is (theoretically) revenue-neutral in America, not all immigrants are created equal. Half of all immigrants actually receive more in government assistance than they pay in taxes, but thankfully, they are balanced out by the other half. Specifically, immigrants who came to America for family reasons, or arrived as refugees, cost a net present value of $170,000.

Net present value is how much money the government would need to invest today, at a yield of inflation plus three percent, to pay for said immigrant's tax deficit over the course of his expected lifetime. Of course, the government does not do this – it spends only as it receives. Therefore, looking at net present value creates artificially low expectations.

According to the Heritage Foundation, each non-economic immigrant more realistically costs a net of $476,000 in welfare payouts. This does not account for any increases in government programs. Applying this more realistic figure to the original study means that immigrants consume far more in government services than they pay for. In fact, if immigration levels remain unchanged, those arriving over the next decade will cost American taxpayers a net of $1.9 trillion over their lifetimes. The welfare state is already struggling; immigration will make a bad problem worse.

Another important study, conducted by Denmark's Ministry of Finance, found that immigrants are a net drain on the nation's welfare state. In fact, non-E.U. immigrants and their descendants consumed 59 percent of the tax surplus collected from native Danes. This is not surprising, since some 84 percent of all welfare recipients in Denmark are immigrants, or their descendants. The bottom line: immigration is a net burden on Denmark.

Likewise, a study conducted by Canada's Fraser Institute, a think-tank, found that mass immigration costs Canadian taxpayers some $24 billion per year – and this was using data from nearly a decade ago. The number has since increased significantly, as Canada has one of the highest immigration rates in the world.

Finally, a study from the University College of London found that immigrants consume far more in welfare than they pay in taxes. Specifically, the study looked at the Labor government's mass immigration push between 1995 and 2011. The study found that immigrants from the European Economic Area made a small but positive net contribution to the British economy of £4.4 billion during the period. However, during the same period, non-European immigrants (primarily from South Asia, the Middle East, and Africa) cost the British economy a net £120 billion.

The origin-based economic differences are actually exacerbated by the U.K.'s generous welfare state: while European immigrants often left their extended families at home, to be cared for by their respective governments, immigrants from the Third World generally brought their families with them, knowing that British taxpayers would care for them. From the immigrant's perspective, this is a rational choice, but does it make sense for British taxpayers? No.

For decades, Democrats campaigned on promises of cradle-to-grave care for low-income Americans, while at the same time they have allowed millions of immigrants to enter America and collect welfare – without ever having contributed a dime to the public purse. This is not only unfair; it is unsustainable. The welfare state is collapsing under its own weight, and mass immigration is only making this bad problem worse.

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