Back Where We Started: '96 Law Failed to Cut Overall Immigrant Welfare Use in New York, Says Center for Immigration Studies

3/17/2003

From: Steve Camarota of the Center for Immigration Studies 202-466-8185; e-mail: sac@cis.org

WASHINGTON, March 17 -- 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 New York and across the nation the percentage of immigrant households using at least one major welfare program has increased slightly 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 New York and the nation, the welfare gap with natives has widened when all four programs are considered together. Moreover, the number of immigrant households using welfare rose by 91,000 in New York State since 1996.

The report contains detailed findings at both the state and national level, and is on line 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 New York, 28 percent of immigrant households used at least one welfare program in 1996, compared to 18 percent of natives. After falling in the late 1990s, welfare use by immigrants increased to 30 percent in 2001, while remaining at 18 percent for natives.

-- The persistently high rate of welfare use by immigrant households stems from their heavy reliance on Medicaid, both nationally and in New York. In contrast, immigrant use of TANF has fallen dramatically in New York, from about 10 percent in 1996 to roughly 3 percent in 2001, and food stamp use fell from about 15 percent to less than 8 percent.

-- The decline in TANF and food stamp use has not resulted in a large savings for New York taxpayers because of a significant increase in the costs of providing Medicaid to immigrant households. The average value of benefits and payments from welfare received by immigrant households in the state is still 41 percent higher than that of natives.

"If one of the goals of welfare reform was to reduce immigrant use merely of TANF and food stamps, then it has been a success in New York. But if the goal was to save taxpayers money and foster less dependence on government, then it has been much less successful," said Camarota. "Moreover, trying to cut immigrants off from the welfare system is of questionable fairness. 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 New York also shows a significant decline in TANF and food stamp use. However, continued heavy reliance on Medicaid has meant that the percentage of legal immigrant households using the welfare system climbed from 28 percent in 1996 to 30 percent by 2001.

-- About 60,000 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 more than twice 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, and many states, such as New York, chose to cover otherwise ineligible immigrants with their own funds. 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 New York 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.