Objection #3: “They’re Stealing Welfare!”

Overcoming populist fears about welfare abuses by immigrants

This post is the fourth in a series of articles debunking the most common populist arguments against (mostly) open immigration, based on my dozens of interviews on the topic since I began broadcasting The Bob Zadek Show in 2008.

“I don't have a problem with competition. My problem is with the welfare state, especially here in California. It entices the people that want to come live off the system. They are getting paid under the table and then still getting money from the system. They're not just competing for the jobs – they're competing for tax dollars, without really putting much back into the system.”

– Tracy ( caller)

Now that we’ve dealt with the myths that immigrants are “taking our jobs” and overpopulating the country, we turn to what is perhaps the most libertarian of objections to open immigration.

Tracy was not the first nor the last caller to my show to raise the “welfare objection” to open immigration. In fact, she is in good company with her concerns. Her views are highly similar to those of one of my personal icons, Milton Friedman.

Friedman, the famous libertarian economist, is often misquoted by the left – especially on immigration.

Speaking about life in modern America, Friedman said you cannot have open borders and a welfare state. The danger, he thought, is that people would come here for the welfare goodies, which is exactly Tracy’s point. However, he also said that open borders were the secret engine that drove American success from the end of the 19th century to the beginning of the 20th century. The only difference that made it workable during that time is that there wasn't a welfare state.

Friedman's goal, of course, was to undo the welfare state so that you could allow for open immigration. He assumed that we can’t end the welfare state overnight, so he preferred a system in which people would be able to participate in the economic system without having the safety net offered to full citizens.

How Welfare Reforms Already Solved the Problem

Long term, the libertarian solution is to undo the welfare state and let the immigrants in. The more gradual solution is to let immigrants come, but not grant them welfare benefits for some specified period. Instead of a green card, we could give them a “blue card,” which would allow them to work and pay taxes, but not receive benefits initially. This was Friedman’s ideal solution, and in many ways, it is already in effect for illegal immigration.

Alex Nowrasteh of the Cato Institute has had to explain to my callers countless times on my show that illegal immigrants to the United States have no recourse to public benefits at all – with the only exception being emergency medical care. Under the EMTALA Act, passed in 1986, anyone who shows up at the emergency room must be provided with care and stabilized. This is humane, and few oppose it.

In 1996, Bill Clinton signed the Welfare Reform Act into effect, which restricted non-citizen access to most welfare benefits. Even legal immigrants to the U.S. with green cards are not eligible for many welfare benefits for the first five years in the United States. This Welfare Reform Act, which amounted to putting a wall around the welfare state,” was politically popular on both sides of the aisle.

Most states also deny benefits to new immigrants. The few states that have not restricted welfare benefits as much – like California, New York and New Jersey – are all experiencing declining immigration rates compared to places like Texas, Florida, and Arizona:

“The places that are booming, where immigrants want to go, are places that are governed by Republicans that have smaller welfare states and that don’t let immigrants get welfare as much. That’s because immigrants aren’t coming here for welfare. They’re coming here for jobs. They’re coming here to work.” – Alex Nowrasteh, Immigrants: The Ultimate Entrepreneurs

Even Eligible Immigrants Use Welfare Benefits at Lower than Average Rates

Aside from emergency room care, legal immigrants barely receive any benefits for the first five years that they’re here in the United States. Once immigrants are eligible, they are still much less likely than native-born Americans to actually use the programs that are available to them, such as Medicaid, CHIP, SNAP, and SSI. Nowrasteh cites data finding that immigrants use Medicaid 42% less than native-born Americans. Furthermore, immigrants pay into Medicare and Social Security around $12 billion per year more than they take out, while native-born Americans take out around $30 billion more from the system than they pay in. Even if you don’t like these programs, their existence is hardly an argument against immigration. Rather, it is an argument against the welfare state.

If anything, these figures show that we need more immigration to help support a bankrupt welfare system.

Another caller to my show, Ed, still objected to the 5-year waiting period for citizens to receive welfare, suggesting that we instead deny welfare to new citizens for life as a part of the immigration process. While perhaps preferable to draconian immigration restrictions, the idea that immigrants should remain second-class citizens for the rest of their lives strikes me as wrong. Why should someone who is only American by accident of birth be treated differently than an American who went through great hardship to become a citizen? We don’t need to discriminate – just build the wall around the welfare state.

Welfare Benefits Coincide with Limited Immigration

For the true opponent of the welfare state, increasing immigration is a no-brainer, even if the system still remains in place at the time when immigration is liberalized. This is because of the distinct correlation between closed borders and welfare states. Alex Nowrasteh points to Germany in the 1890s and England in the early 1900s as prime data points.

“One of the first things they did after [expanding the welfare state], was they closed off their country to most immigration,” Nowrasteh notes. This is an extension of the Milton Friedman logic, but it also works in the other direction. When you open up the borders to immigration, people become naturally less favorably disposed towards the welfare state and vote to roll it back.

Was Friedman wrong in his critique of the welfare state? Perhaps, insofar as he continued to claim the incompatibility of immigration and a welfare state after the reforms of the 1990s. But if a mind as sharp as Friedman’s can overlook the evidence, I suppose my callers can be forgiven as well.