US-specific means-tested welfare benefits for poor immigrants

This is a discussion of the US-specific version of the means-tested welfare benefits for poor immigrants part of the welfare objection to immigration.

Below is a quote from a book by Mark Krikorian specifically in the US context.

In a modern economy, people with very little education generally earn very low wages, with limited opportunities for advancement, and this holds true for immigrants. In 2005, immigrants were nearly half again as likely to be in poverty than natives—17 percent of immigrants had incomes below the official poverty line (about $20,000 for a family of four), compared with 12 percent of native-born Americans.9 When immigrants’ U.S.-born young children are added (which makes sense, since they live in the same household), the immigrant poverty rate is more than 18 percent. Nearly half of immigrant households—45 percent—were in or near poverty, meaning their income was below 200 percent of the poverty level, compared with 29 percent of native-headed households. The near-poverty benchmark is important because people whose incomes are below that level generally don’t pay federal income taxes and are usually eligible for means-tested welfare programs.

Mexicans—the largest and least-educated immigrant group—are also the poorest, with nearly two thirds living in or near poverty and more than one in four actually below the poverty line. The result of this widespread immigrant poverty is widespread immigrant welfare use. Among households headed by native-born Americans, 18 percent use at least one major welfare program. That’s already quite high, of course, but among immigrant-headed households, the rate is half again as high, at almost 29 percent.10 Immigrant use of cash assistance programs11 is only a little higher than among Americans, while the gap is larger for use of food stamps and government-owned or -subsidized housing. The biggest differences are in WIC and subsidized school lunches, which immigrants are more than twice as likely to use, and Medicaid (health insurance for the poor), which immigrants are about two thirds more likely to use. These welfare programs combined cost federal taxpayers some $500 billion a year, most of which is for Medicaid. This is significant because it is in Medicaid—the biggest and most expensive welfare program—where the gap between immigrants and the native born is the biggest. Use of most of the other welfare programs, whether by Americans or immigrants, is mostly in the single digits; but Medicaid is used by fully 15 percent of native-born households and an astounding 24 percent of immigrant households (and 37 percent of Mexican immigrant households). Underlining the mismatch between mass immigration and the modern welfare system is the extraordinarily high immigrant eligibility for the Earned Income Tax Credit (EITC). The EITC is available only to people who work, and it functions as a kind of negative income tax—those who file a tax return have their EITC check calculated automatically by the IRS, based on their income and family size. In its surveys, the Census Bureau estimates whether people are eligible for the EITC, so the number of people actually receiving it is probably somewhat lower, but the figures are quite high nonetheless. More than 15 percent of native-headed households are eligible for this $30 billion program, but nearly twice as large a share (30 percent) of immigrants qualify, including fully half of Mexican-immigrant households. The EITC was designed as a way to encourage enterprise rather than dependency among the poor. For the same reasons, the 1996 welfare-reform legislation introduced work requirements for certain programs. At the same time, other welfare programs are targeted at helping children, such as WIC, subsidized school lunches, and the State Children’s Health Insurance Program (a part of Medicaid). In other words, the modern American welfare system is designed mainly to provide support for the working poor with children. Who are immigrants but the working poor with children? Immigrants work (in 2001, almost 80 percent of immigrant households using welfare had at least one person working12), they’re poorer than Americans (see above), and they have more children than Americans (the average immigrant woman has 2.7 children in her lifetime, versus 2.0 for native-born women). In other words, mass immigration is almost perfectly designed to overwhelm modern America’s welfare system. In the words of two welfare scholars, “This very expensive assistance to the least advantaged American families has become accepted as our mutual responsibility for one another, but it is fiscally unsustainable to apply this system of lavish income redistribution to an inflow of millions of poorly educated immigrants.”13

Krikorian, Mark (2008-07-03). The New Case Against Immigration: Both Legal and Illegal (pp. 170-172). Penguin Group. Kindle Edition.

"The Efficient, Egalitarian, Libertarian, Utilitarian Way to Double World GDP" — Bryan Caplan