Back Where We Started: '96 Law Failed to Cut Overall Immigrant Welfare Use in Colorado

3/17/2003

From: Steve Camarota of the Center for Immigration Studies, sac@cis.org or 202-466-8185

WASHINGTON (March 14, 2002) - Rather than reducing immigration levels, Congress in 1996 chose to deal with the problem of heavy immigrant welfare use by adopting a punitive approach of denying many immigrants access to welfare programs. New research from the Center for Immigration Studies shows that this approach has largely failed. In Colorado and across the nation the percentage of immigrant households using at least one major welfare program has actually risen since 1996. The report - "Back Where We Started? An Examination of Trends in Immigrant Welfare Use Since Welfare Reform," by Steven A. Camarota, the Center's Director of Research - examines use of four major welfare programs: Temporary Assistance to Needy Families (TANF), food stamps, Supplemental Security Income (SSI), and Medicaid. The findings show that while TANF and food stamp use by immigrant households has declined both in California and the nation, the welfare gap with natives has widened when all four programs are considered together. Moreover, immigrant households comprise a growing share of households using the welfare system. In Colorado, the number of immigrant households using welfare rose by 73 percent. In contrast, the number of native households in the states using welfare declined by 17 percent. The report contains detailed findings at both the state and national level, and is online at http://www.cis.org/articles/2003/back503.html. Other findings:

-- Nationally, 22 percent of immigrant-headed households used at least one major welfare program, compared to 15 percent of native households. After declining in the late 1990s, welfare use rebounded, with 23 percent of immigrant households using welfare compared to 15 percent of native households in 2001.

-- In Colorado, 14 percent of immigrant households used at least one welfare program in 1996, compared to 12 percent of natives. By 2001 immigrant welfare use stood at 17 percent, while native use had decline to 9 percent.

-- The persistently high rate of welfare use by immigrant households stems from their heavy reliance on Medicaid, both nationally and in Colorado.

-- Because of a rise in the costs of providing Medicaid to immigrants, the average value of benefits and payments from welfare received by households increased from $900 in 1996 to $1,282 in 2001 and is now 50 percent higher than that of native households in the state.

"If the goal of the immigrant provision of welfare reform was to save taxpayers money, then it has largely failed in Colorado," said Camarota. If we want immigrants to use less welfare, then we need to select immigrants who are unlikely to need welfare in the first place."

Other findings:

-- Estimating welfare use for only households headed by legal immigrants in Colorado shows that welfare use rates have risen; in 1996, 11 percent used at least one welfare program, and by 2001 it had climbed to 17 percent.

-- About 10,000 households headed by illegal aliens in the state receive welfare, primarily Medicaid on behalf of their U.S.-born children. However, the value of benefits and payments received by legal immigrants is 27 percent larger than that of illegal alien households. Thus an unintended consequence of enacting an amnesty for illegal aliens would to be to significantly increase welfare costs.

-- The high rate of welfare use associated with immigrants is not explained by their unwillingness to work. In 2001, almost 80 percent of immigrant households using welfare nationally had at least one person working.

-- One reason for the heavy reliance by immigrants on welfare programs is that a very large share have little education. The modern American economy offers very limited opportunities for such workers, thus many immigrants work, but their low incomes allow them to use the welfare system.

Policy Discussion: The last five years have shown that politically and practically, it is almost impossible to exclude immigrants and their children from the welfare system once they have been allowed into the country. In fact, Congress repealed some restrictions on immigrants shortly after passing them. Legal immigrants can also avoid these restrictions simply by becoming citizens. Perhaps most important, immigrants can receive welfare benefits on behalf of their U.S.-born children. The only way to significantly reduce immigrant welfare use in the future is to admit fewer unskilled immigrants. In 2001, 42 percent of households headed by a legal immigrant without a high school degree used welfare, compared to 10 percent of immigrant households headed by a college graduate. The solution is not punitive welfare-eligibility bans but rather changes in immigration policy. Some may argue that there are businesses in Colorado that would not survive without immigration constantly increasing the supply of unskilled labor and holding down labor costs. If this is the case, perhaps we should reduce immigration and let these businesses fold. If a company can only survive by paying such low wages that their workers still qualify for welfare - creating huge costs for taxpayers - then maintaining these businesses makes little sense.