Thursday, April 07, 2005

Illegal Immigration and Social Security...

The answer to shoring up Social Security appears to be illegal immigrant workers. Eduardo Porter of New York Times new service reports that illegal immigrants may contribute up to $7 billion per year in Social Security taxes without ever receiving any benefits from the system.

As the debate over Social Security heats up, the estimated 7 million or so illegal immigrant workers in the United States are providing the system with a subsidy of as much as $7 billion a year.

Setting aside all the supposed benefits of illegal immigration to the Social Security system, this story highlights yet another problem for legal immigrant workers. Contrary to the underlying assumption that illegal immigrants are simply taking jobs that Americans won't do, there is growing concern over the tide of illegal immigrants within the communities of legal immigrant workers. I recently read the story of Gerardo Jimenez, a beneficiary of the amnesty awarded to illegal immigrants during the Reagan Administration, who now runs a dry-wall crew of legal migrant workers. Gerard seems to think illegal immigrants may actually be taking jobs that attracted the legal migrant workers in the first place, putting downward pressure on wages for those legal workers.

The current Social Security system compounds the attraction of illegal immigrants for employers by creating an unintended financial incentive. Apparently, after hiring a legal and documented worker, an employer must pay Social Security payroll taxes to both the United States and the worker's nation of origin. So, an employer hiring illegal immigrants presenting forged documents can plausibly deny any wrong-doing and avoid paying the double Social Security taxes to foreign countries. The solution to this problem is called Totalization and has been used with workers from a number of countries, but does not yet include Mexico.

That's one of the problems with the immigration issue; it touches so many aspects of our society. President Bush's immigration policy won't help much without also strengthening control of our borders. Strengthening our borders will have a marginal effect on illegal immigration without a more accommodating immigration policy and totalization with Mexico. After all, a program for legal guest-workers will benefit no one if those workers have to compete with illegal aliens for the same jobs.

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