President Donald Trump’s merit immigration reform will save $1 trillion in various taxpayer-funded welfare and aid programs, says a cautious report by the Heritage Foundation.
The $1 trillion cost-saving generates a $3,000 saving for each American, and it is gained by halving one decade’s inflow of unskilled immigrants who will be dependent on taxpayer aid during their working years and in their old age.
Heritage’s 75-year estimate uses the data and analysis validated in September 2016 by the prestigious National Academics of Sciences. The academies’ September 2016 report — prepared by a panel of pro-immigration experts — showed that low-skill immigrants are very expensive for taxpayers. They are so expensive that American taxpayers are virtually depositing at least $140,000 in a bank at 3 percent interest as soon as each low-skill migrant arrives, the NAS panel said.
The Heritage report was written by Robert Rector, the foundation’s in-house expert on immigration. He wrote:
To cover the future cost of one year’s inflow of low-skill immigrants, the government would need to immediately raise taxes by a lump sum of $67 billion, put the money in the bank earning interest at the inflation rate plus 3 percent, and use the interest and principal to cover long-term costs. ($67 billion equals around $800 for each U.S. household currently paying federal income tax.)
Of course, in the next year another 470,000 would arrive, requiring another lump sum payment of $800 per taxpaying household. The year after, another 470,000 will arrive requiring another $800 per taxpaying household, and so on…
The future net outlays (benefits given less taxes paid) for the inflow of 4.7 million low-skill immigrants will be around $1.9 trillion (in constant 2012 dollars).
Trump’s merit immigration reform would trim future legal low-skill immigration by roughly 50 percent in one decade, so saving taxpayers at least $1 trillion over the next 75 years, says the Heritage report. Americans will save an extra $1 trillion for every decade where low-skill immigration is reduced, Rector said.
By limiting future legal low-skill immigration, the RAISE Act could save at least $1 trillion. Additional large savings could be achieved by limiting future illegal immigration. These saving figures apply to only a single decade of low-skill immigration. Similar savings would occur by limiting low-skill immigration in subsequent decades.
That cost saving, however, would be bad for the business and government interests which normally receive the huge welfare spending once the low-wage immigrants use the aid to effectively buy and consume food, lodging, entertainment, transportation and basic education for their kids.
Trump’s popular “Reforming American Immigration for Strong Employment (RAISE) Act” was drafted by two GOP Senators, Georgia Sen. David Perdue and Arkansas Sen. Tom Cotton.
The $1 trillion savings from reduced tax spending does not include the extra benefit of higher wages for Americans, especially for lower-skilled Americans, marginalized Americans and recent immigrants. According to Rector:
Metaphorically speaking, low-skill immigrants increase the economic pie, but they eat nearly all the increase themselves.
Low-skill immigration reduces the wages of similar U.S.-born workers. An immigration-induced increase in the low-skill labor force of 10 percent can reduce the wages of low-skill non-immigrant labor by 3 to 10 percent.
Some studies show wage losses as high as 17 percent. Black male wages and employment are especially hard hit. By reducing wages of less skilled non-immigrants, low-skill immigration increases economic inequality in the U.S., redistributing income from the least advantaged Americans to the more affluent.
Reduced immigration also reduces the power of the Democratic Party to expand government and raise taxes, Rector notes:
According to Cooperative Congressional Election Survey, the political alignment of immigrants is far to the left that of non-immigrants. Immigrants in general are twice as likely to identify with and register as Democrats than as Republicans.
Rector did not discuss the workplace impact of Trump’s immigration reforms, which are already pushing companies to hire Americans, and to buy American-made, high-tech labor-saving machinery. That shift in investment is converting low-wage jobs slated for illegal immigrants into high-wage jobs for Americans.
Also, at least three economic forecasts show higher wages for Americans if immigration is rolled back, and numerous employers are already complaining about having to divert profit into wages or investment.
In his August 2 presentation of Trump’s merit plan to the media, presidential advisor Steven Miller made clear the President’s plan to raise all Americans’ wages:
At the end of the day, President Trump has been clear that he is a pro-high-wage President. He ran as a pro-high-wage candidate, and that’s what this policy will accomplish.
At the same time, to the point about economic growth, we’re constantly told that unskilled immigration boosts the economy. But again, if you look at the last 17 years [of mass immigration], we just know from reality that’s not true. And if you look at wages, you can see the effects there. If you look at the labor force, you can see the effects there.
And so again, we’re ending unskilled chain migration, but we’re also making sure that the great inventors of the world, the great scientists of the world, that people who have the next great piece of technology can come into the United States and compete in a competitive application process — a points-based system that makes sense in the year 2017.
The annual inflow of foreign workers is very large.
In 2016, for example, federal data shows that former President Barack Obama gave federal “Employment Authorization Document” work permits to at least 2.3 million migrants for U.S. jobs, and approved visas for roughly 500,000 outsourcing workers, such as the H-1B white-collar workers, H-2B blue-collar workers and H-2A agriculture workers. Those temporary workers were in addition to the routine inflow of 1 million legal immigrants and roughly 400,000 illegal immigrants.
The combined inflow delivered almost 4 million legal foreign workers to Americans’ economy in 2016, just as 4 million young Americans turned 18 and began looking for decently paid jobs.
Many polls show that Americans are very generous, they do welcome individual immigrants, and they do want to like the idea of immigration. But the polls also show that most Americans are increasingly worried that large-scale legal immigration will change their country and disadvantage themselves and their children.
The current annual flood of foreign labor spikes profits and Wall Street values by cutting salaries for manual and skilled labor offered by blue-collar and white-collar employees. It also drives up real estate prices, widens wealth-gaps, reduces high-tech investment, increases state and local tax burdens, hurts kids’ schools and college education, and sidelines at least 5 million marginalized Americans and their families.
Read the Heritage report here.
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