How Immigration Destroys the Welfare State

immigration vs welfare

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From The Democrat’s Dilemma:

The primary reason that mass immigration destroys the welfare state because immigrants receive more in benefits than they pay in taxes.

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 their 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.  And of course 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 were a net drain on the nation’s welfare state.  In fact, non-EU 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 consumed far more in welfare than they paid in taxes.  Specifically, the study looked at the Labour government’s mass immigration push between 1995 and 2011.  They 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 UK’s generous welfare state: while European immigrants often left their extended families at home, to be cared for by their respective government, 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.

Together, these studies show that mass immigration won’t save the welfare state, instead it will hasten its insolvency.  In the end, immigrants won’t pay for our pensions, we’ll pay for theirs.

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About Spencer P Morrison 153 Articles
J.D. B.A. in Ancient & Medieval History. Writer and independent intellectual, with a focus on applied philosophy, empirical history, and practical economics. Author of "Bobbins, Not Gold," Editor-In-Chief of the National Economics Editorial, and contributor to American Greatness. His work has appeared in publications including the Daily Caller, the American Thinker, and the Foundation for Economic Education.