Undocumented Immigrants Giving Social Security, Baby Boomers a Big Boost

social securityWashington Post columnist and Harvard University Migration and Integration Research director, Edward Schumacher-Matos, recently pointed out what the Social Security Administration (SSA) has known for years—undocumented immigrants contribute to Social Security in a big way. But what surprised Schumacher-Matos was just how much these immigrants contribute, and the fact that many states are trying to pass enforcement to drive these contributors out.

With an upcoming wave of retiring Baby Boomers (who will receive Social Security benefits instead of paying into the system) and a Social Security system teetering on the edge of insolvency, immigrants (both documented and undocumented), their role as taxpayers, workers and consumers and the question of what to do about our immigration problems become ever more relevant.

In a recent Washington Post editorial, Schumacher-Matos laid out the facts:

  • By 2007, the Social Security trust fund had received a net benefit of somewhere between $120 billion and $240 billion from unauthorized immigrants, representing 5.4% to 10.7% of the trust fund’s total assets ($2.24 trillion) that year.
  • Unauthorized immigrants paid a net contribution of $12 billion in 2007 alone.
  • The cumulative contribution is surely higher now.
  • Roughly two-thirds of unauthorized immigrant workers, or 5.6 million people, were paying into the system in 2007.
  • Few of these contributing unauthorized immigrants are likely to receive anything, ever.

The SSA’s chief actuary, Stephen C. Goss, went on to say that if it wasn’t for undocumented immigrants paying into the system—the majority of whom, mind you, will never collect the benefits—the SSA wouldn’t have been able to cover payouts in 2009:

If for example we had not had other-than-legal immigrants in the country over the past, then these numbers suggest that we would have entered persistent shortfall of tax revenue to cover [payouts] starting [in] 2009, or six years earlier than estimated under the 2010 Trustees Report.

As Baby Boomers (born between 1946 and 1964) start to retire, the ratio of seniors to working-age adults (25 to 64) will be thrown out of balance, causing massive Social Security underfunding. According to a report by Dowell Meyers of the University of Southern California, “over the next 20 years, the number of senior citizens relative to the number of working-age Americans will increase by 67 percent,” which means that more and more retirees “will transition from being net taxpayers to net recipients of pension benefits, and they will be supported by a smaller workforce that is struggling to meet its own needs.”

So as we pull out of the recession, employment rates return to normal and more and more Baby Boomers retire, who, exactly, is going to fill this gap? Enter immigration.

Clearly, having roughly 8 million undocumented workers in the U.S. workforce is not an ideal situation. While these undocumented workers do, in fact, shoulder some of the SSA’s solvency burdens, keeping them in our workforce is not only exploitative, it’s unfair. And it’s not a long-term solution. Yet neither is the recent “enforcement through attrition” strategy employed by immigration restrictionists to drive undocumented immigrants out.

Study after study indicates that immigration reform which includes an earned path to legalization—that is, allows these undocumented immigrants to become taxpaying U.S. citizens—would go a long way in filling the void. It is sad, but not surprising, that complex policy issues like Social Security reform and immigration reform have long been stymied by a political lack of will. It is also sad, but even more ironic that the same solution—comprehensive immigration reform—is critical to solving both problems.
Seth Hoy

Republished with permission from Immigration Impact.

Comments

  1. CCGC says

    Seth, at least be honest. By “comprehensive immigration reform” you really mean we should massively increase immigration, especially from Mexico, and give illegal aliens amnesty. We have already given amnesty numerous times in recent decades, and what did it get us? More illegal aliens, and higher costs for the US taxpayers who have to pay for the children of those lawbreakers.

    You want “undocumented workers” to fill the void? There’s no void, there’s only a lack of employment. I want a full time job but I have to compete with people willing to work for five bucks an hour for work that should pay $10-$30/hr.

    Isn’t it bad enough that so many Americans can’t be fully employed without people like you trying to degrade our chances to get jobs even more? Jeez.

  2. NYH says

    Seth, you’re completely ignoring the fact that when an illegal alien who snuck into this country has a baby, that kid is an “instant citizen” who is automatically entitled to ALL social service programs our country offers. That means if that kid is disabled in any way, he or she is entitled to 100% complete Social Security Disability for the rest of his or her life.

    The parent may have NEVER paid into the Social Security system, yet their kid can help suck the life out of it.

    But hey, keep on writing these slanted articles that try to convince hard working Americans that we should be allowing illegal aliens to stay in our country.

    Great job, liberals. This kind of nonsense is EXACTLY what made moderates vote for Bush, Bush II, Nixon and Reagan. It looks like people like Seth don’t care about the backlash that will result from their slanted articles that push for immigration increases and amnesty for illegal aliens.

  3. says

    Can these undocumented immigrants replace the baby boomers though?
    They’re clearly filling a gap as they’re working but it’s not the same gap as will be left.
    Unfortunately many of the undocumented immigrants are only able to find work in low paid, menail jobs where less questions are asked – if we make them all legal will they simply “come out of the fields” and take up the office positions left empty by retiring baby boomers?
    Yes, this is an over simplification but the point being, if we need more people in the country then at least still vet them, just lower the barriers to immigration, start letting it accountants, sales people, IT people, lawyers (not too many) and university graduates with top grades etc.

  4. says

    Yes, let’s give undocumented immigrants credit for bolstering Social Security, but can’t we do that without repeating the Republican lie that the system teeters on the brink of insolvency? That’s only true if the Republicans have their way.

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