National Data | Citizenship `Path Out Of Poverty`—Or Into Welfare?
August 09, 2006, 05:00 AM
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The Senate`s proposed guest worker sellout implies an upbeat economic scenario for the newly legalized.  After paying a (trivial) fine, illegal immigrants who have lived within the law and are gainfully employed would be on a fast track to naturalization.

Goodbye underground economy; Hello taxes, better jobs, and the American Dream.

But does citizenship really insure economic success?

If poverty rates are any indication, the answer appears to be a resounding "Si!". In 2004 (the latest available data) the share of individuals living in poverty was as follows: [Census Bureau, `Income, Poverty, and Health Insurance Coverage in the United States: 2004,` August 2005. PDF]

  • All persons:  12.7 percent

 

  • Native-born:  12.1 percent

 

  • All foreign-born: 17.1 percent

 

  • Naturalized citizens: 9.8 percent

`In other words,` crows Jared Bernstein of the left leaning Economic Policy Institute, `there is a huge difference between the economic status of immigrants who have become citizens and those who have not. The path to citizenship is also a path out of poverty.` [ Path to Citizenship and Out of Poverty , Providence Journal, June 26, 2006]

Maybe. Naturalized citizens are older, have been in the country longer, and may have honed their English language skills and marketability. They represent the `best and the brightest` of immigrant groups.

But rarely mentioned is the role that welfare plays in making it look like this select group has climbed out of poverty.

Poverty rates are calculated based on cash income, whether from wages or government benefits. It follows that cash programs like TANF [Temporary(sic) Assistance for Needy Families] Supplemental Security Income (SSI), and unemployment insurance, reduce the official poverty rate of recipients.

In one of the familiar paradoxes of current immigration policy, immigrants generally, and naturalized immigrants in particular, use a lot of government benefits, i.e. are being paid by the American taxpayer to be here.

An analysis of Census Bureau survey data that 24.9 percent of families headed by illegal Mexican immigrants and 33.9 percent of households headed by naturalized Mexican immigrants and receive at least one major welfare program.

By contrast, only 14.9 percent of native households receive any welfare.

Here again, data show that naturalized immigrants are more likely than non-citizens to exit poverty on public funds. TANF, for example, is received by 7.3 percent of naturalized Mexican immigrant households versus only 1.2 percent of households headed by illegal Mexican immigrants. For SSI the recipiency rates are, respectively, 5.6 percent and 0.7 percent, and for unemployment compensation, 8.5 percent and 7.2 percent.

Nor does the addiction diminish over time. TANF recipiency rates for immigrant households that arrived prior to 1980 are identical to those that arrived between 2000 and 2005, while SSI recipiency is actually higher for pre-1980 arrivals (6.0 percent) than the 2000-05 cohort. (1.6 percent.)[ Immigrants at Mid-Decade | A Snapshot of America`s Foreign-Born Population in 2005, December 2005 By Steven A. Camarota]

It`s not that the new citizens don`t work. About 80 percent of all immigrant households receiving welfare had at least one person working in 2001. But they are the working poor—with incomes low enough to qualify for welfare.

Immigrants to the U.S. have often been poor. But wages of most European immigrants approached (or even exceeded) the levels of native-born Americans after 10 or 15 years. The Mexican experience is much different. A Rand study published in the 1990s showed that Mexicans arriving in the late 1970s received wages half the level of natives; by 1990 their wages were still about half. [ Immigration and Poverty, By Robert J. Samuelson Newsweek, July 15, 1996.]

Many of these poor workers became naturalized citizens.

They have assimilated—into the welfare state.

Edwin S. Rubenstein (email him) is President of ESR Research Economic Consultants in Indianapolis.