Federation for American Immigration Reform - Wrong Again

Estimating the fiscal costs and benefits of unauthorized immigration is very difficult. That doesn't mean it's not worth trying, but FAIR's report is not a serious effort.
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The Federation for American Immigration Reform (FAIR) is a stridently anti-immigration organization that wants to substantially decrease legal and unauthorized immigration to the United States. It frequently makes inaccurate claims about immigrants. Its most egregious economic claim is that unauthorized immigrants cost American state, local, and federal governments about $113 billion a year. This is pure bunk that I take to task here.

FAIR's evidence is detailed in its report, "The Fiscal Burden of Illegal Immigration on United States Taxpayers" by Jack Martin and Eric A. Ruark. Quite frankly, it is one of the most amateurish and error filled reports I've ever read. It ignores the fiscal benefits of unauthorized immigration and uses dubious numbers and poor methodology to reach its conclusions.

Every human activity has both costs and benefits. People constantly weigh costs and benefits. If a given action's benefits outweigh its costs, that action is worth taking - but you have to analyze both the costs and benefits first before you can come to that conclusion. The FAIR report counts the costs alone.

FAIR estimates that it costs states and the federal governments $52 billion a year to educate unauthorized immigrants and their American-born children. FAIR doesn't compare that figure with the increase in income that people experience after earning a high school degree or GED, about $7,208 over non-high school graduates. That's $7,208 more of taxable income. On top of that, between half and three-fourths of all undocumented immigrants file tax returns. The tax revenue gained from increasing education must be compared against the increased cost of public education when determining the net fiscal costs.

FAIR doesn't consider this because it stops counting the tax payments of the children of unauthorized immigrants by the time they graduate high school. Most children cost the government before the age of 18 because of our insanely expensive and ineffective public education system, so if you stop counting the costs and benefits of students by the time they reach 18, you'll reach the conclusion that children are always a fiscal loss for the government. If FAIR's reasoning were applied to the rest of society, it would never make fiscal sense to have children, and the quicker we stopped the better for the government's fiscal balance.

FAIR then ignores economic activity that produces tax revenue elsewhere. For instance, unauthorized immigrants purchase vast amounts of goods and services. Profits for those businesses, and hence tax revenues, would decrease if unauthorized immigrants were removed. Many unauthorized immigrants also own businesses, so if they were to be deported their businesses would either disappear or lie dormant until they could be taken over by others.

The supply of jobs is not fixed. It depends on prevailing wages, marginal productivity of labor, supply and demand for inputs for goods and services produced, and numerous other factors. FAIR simply assumes that native and unauthorized workers are perfectly interchangeable, so, as FAIR's reasoning goes, more deportations will just shift unemployed native workers into jobs formerly held by unauthorized immigrants. This is wrong for numerous reasons.

Almost all jobs left vacant by deported unauthorized immigrants will not be filled by legal American workers. Native-born and immigrant workers have different skills, strengths, and weaknesses that make them complementary rather than interchangeable. Most unauthorized immigrants have fewer skills than most native-born Americans, so the two groups generally work in different segments of the labor market. An unauthorized immigrant with poor English skills and less than a high school degree is not about to compete with a native-born American engineer for the same employment opportunity.

Deportations of otherwise peaceful people actually decrease the income of skilled American workers. The income of highly skilled Americans is increased when there are more low skilled workers because members of the two groups can work together. A civil engineer can produce more if there are additional lower skilled surveyors for him to work with.

On a national level, FAIR estimates that there are 4.7 million school aged children who would not be in schools without undocumented immigration--1.3 million unauthorized children and 3.4 million child citizens of unauthorized immigrants. But counting the 3.4 million child citizens as a cost of undocumented immigration is a methodology rejected by the Texas Comptroller's Office in estimating the costs of undocumented immigration to Texas schools. After all, if you count the first born generation of unauthorized immigrants as costs, why not also count all subsequent generations?

Furthermore, the real effect of U.S. deportation policies on families is to split them up, not move all members out of the U.S. As undocumented parents of American citizens are deported, numerous times their children are kept in the U.S. in foster care or with other relatives.

Estimating the fiscal costs and benefits of unauthorized immigration is very difficult. That doesn't mean it's not worth trying, but FAIR's report is not a serious effort. It takes a snapshot in time using dubious methodology without acknowledging that undocumented children grow up to become taxpayers.

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