'Ask AP' Answer on Illegal Immigrants Misleads Mightily

AskAPillegalImmigrants0808According the Associated Press, "Ask AP" is "a weekly Q&A column where AP journalists respond to readers' questions about the news."

Given how biased the wire service's news reporting is, you wouldn't expect "Ask AP" responses to be very different. They usually aren't.

Case in point (second question at link) -- Reader Cindy Garcia of Vista, California asked AP about the costs and benefits of illegal immigration:

I hear so many conflicting stories on illegal immigration. Please tell me if you can how much the illegal immigrants contribute to the economy and how much they use in free services. If they all got deported, how would it affect our economy?

Here is the sadly incorrect and incomplete answer from AP writers Laura Wides-Munoz in Miami, Jacques Billeaud in Phoenix, and Suzanne Gamboa in Washington (bolds are mine):

It's tough to say how many people are in the U.S. illegally, let alone how many are working or using public resources. Every study uses rough estimates. Still, we do have some clues.

Illegal immigrants contribute to the economy whenever they pay sales tax and, indirectly through rent payments, real estate taxes.

Also, those who use false Social Security numbers pay taxes into the system they don't get back, since people here illegally aren't eligible to receive Social Security payments. In 2003 alone, the government received Social Security taxes on $57.8 billion from wage reports that couldn't be matched to the person filing.

Illegal immigrants are excluded from most federal and state entitlements like subsidized housing or food stamps, and a 2007 congressional report found they appear to contribute more than they use in services. But the money they contribute often goes to federal and state coffers, while many services they benefit from, such as health and law enforcement, come out of local government budgets.

Several studies show more than half of the country's estimated 12 million illegal immigrants are uninsured (out of a total of 47 million uninsured people in the U.S.) and thus likely to use public emergency rooms that treat everyone regardless of ability to pay. It's difficult to calculate the amount of free health care - or, for that matter, free public-school education - they benefit from, since it simply isn't known what proportion of these services go to people who are in the country illegally.

Another cost of illegal immigrants: Their willingness to accept low wages drives down wages in some industries. Then again, if immigrants didn't take these jobs, some of them might get outsourced overseas.

Using Pew Hispanic Center and U.S. Census statistics, the independent economic research firm the Perryman Group concluded that if all illegal immigrants were deported, agriculture would lose nearly a quarter of its workers, the building maintenance industry would lose 17 percent and the construction industry would lose almost 15 percent.

Even though Garcia asked "how much the illegal immigrants contribute" and "use in free services," note that only one dollar amount appeared in the AP trio's answer, and that even this amount, dressed up as a "benefit," wasn't the actual amount of the benefit.

I believe that the one item quantified, the "$57.8 billion from wage reports" is meant to make the real benefit look bigger than it really is. If the $57.8 billion in wages is correct, the 15.3% combined employer and employee FICA and Medicare taxes on that amount would be $8.84 billion. Why didn't the trio calculate and present that easily deduced number? Perhaps there were also federal and state taxes withheld on those wage amounts, but I would expect them to be minimal, as illegals would normally claim as many exemptions as possible to minimize withholdings. The total windfall to governments is at best $10 billion - $12 billion, and may be less if Earned Income Tax Credit fraud is significant.

While the 2007 Congressional Budget Office Report (page linking to PDF is here) didn't calculate any kind of nationwide figures, the AP trio avoided quite a few specifics in the CBO report that would have given reader Garcia a more meaningful answer.

The first and most glaring is on Page 6 -- "The SSA assumes that about half of unauthorized immigrants pay Social Security taxes." If that's the case, and your viewpoint is that any worker, legal or not, should be paying those taxes and working on becoming a citizen so they can ultimately collect the related benefits at retirement, that lost tax revenue offsets the windfall without eventual retirement benefits described earlier.

This turns the cost-benefit question into a pretty simple one: Do the sales and (mostly indirect) real estate taxes illegals pay offset the costs, principally medical care, public education, and incremental law enforcement?

Again, the trio chose to avoid specifics, even though they are in CBO's report to an admittedly limited extent. A few examples:

  • (Page 8) Minnesota estimated that, "during the 2003–2004 school year, (its) state and local governments ..... spent between $79 million and $118 million to educate an estimated 9,400 to 14,000 children who were unauthorized immigrants." If the Gopher State's estimate is acccurate, the lowest possible per-child cost at the time was $5,643 ($79 mililion divided by 14,000). Using a more current per-child cost of about $6,000, and projecting that over a lowball estimate of 2 million illegal-immigrant children, leads to an annual cost of roughly $12 billion nationwide. (Wiki has an estimate of 4.7 million children, but that includes "birthright citizens. I'm using 2 million to show how going with even low-range assumptions generates huge costs).
  • (Page 10) In Texas in 2006, "the state estimated that local governments incurred $1.4 billion in uncompensated costs for health care and law enforcement." Project that cost, which applies to Texas's estimated 14% of the illegal immigrant population, over the entire country, and you get another $10 billion or so ($1.4 billion divided by .14).

These factors alone add up to a lowball estimate of $22 billion, or $1,833 for every illegal man, woman, and child (assuming 12 million illegals). Though I'm open to seeing contrary evidence, I don't see how anyone can credibly make the case that a family of four illegals typically pays over $7,300 (4 x $1,833) directly or indirectly into the system. The trio of AP writers certainly didn't make that case.

Further, all of this shakily assumes that a more-than-minor percentage of illegals hasn't figured out how to get onto entitlement programs like Food Stamps or Section 8 housing. My estimate also assumes that "law enforcement" includes incarceration costs; it is not clear whether the $10 billion estimate above really captures all of that. Unfortunately, Page 9 of the CBO report also repeated the proven-false canard that "in general, immigrants are less likely than native-born citizens to be incarcerated."

The CBO report also excludes the unquantifiable but very real impact of wage depression the "Ask AP" writers cited. That cost is probably not small. If ten million workers are being paid just 50 cents an hour less than they would have been without the unfair competition from illegals, that's over ten billion dollars in lost income (50 cents times 2,080 hours times 10 million workers is $10.4 billion).

The "Ask AP" answer was weak, but unfortunately characteristic, of discussions and coverage of matters relating to illegal immigration nationwide. It will remain that way until the press gets over its political correctness and its allergy to numbers.

Cross-posted at BizzyBlog.com.

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