20080503

Undocumented Workers Are Good for the Economy

As I've known for quite some time, undocumented workers are good for the Amerikan economy. This is because they work, pay a tax on their wages, do not qualify to receive any Social Security benefits, and spend at least a portion of that money on Amerikan goods and services.

I knew of a person that worked, by using a family member's Social Security card, but could not receive Social Security benefits, or any other benefits for that matter. This person was able to pay into the system but was/is not able to receive a pay out. You would think the Republicans would take greater action to support the hiring of undocumented workers, but I suppose they'll be happy with only hindering the work to improve the immigration or guest worker process.

Now the New York Times has an opinion about it:
Immigration is good for the financial health of Social Security because more workers mean more tax revenue. Illegal immigration, it turns out, is even better than legal immigration. In the fine print of the 2008 annual report on Social Security, released last week, the program’s trustees noted that growing numbers of “other than legal” workers are expected to bolster the program over the coming decades.

One reason is that many undocumented workers pay taxes during their work lives but don’t collect benefits later. Another is that undocumented workers are entering the United States at ever younger ages and are expected to have more children while they’re here than if they arrived at later ages. The result is a substantial increase in the number of working-age people paying taxes, but a relatively smaller increase in the number of retirees who receive benefits — a double boon to Social Security’s bottom line.

We’re not talking chump change. According to the report, the taxes paid by other-than-legal immigrants will close 15 percent of the system’s projected long-term deficit. That’s equivalent to raising the payroll tax by 0.3 percentage points, starting today.

That is not to suggest that illegal immigration is a legitimate fix to Social Security’s problems. It is another reminder, however, of the nation’s complex relationship with undocumented workers. Would the people who want to deport all undocumented workers be willing to make up the difference and pay the taxes that the undocumented are currently paying?

It is also a reminder of Social Security’s dynamism. As society and the economy evolve, so does the system, responding not only to changes in immigration and fertility, but also in wage growth and other variables. As such, it is adaptable to the 21st century, if only the political will can be found to champion the necessary changes. Those include modest tax increases and moderate benefit cuts that could be phased in over decades — provided the country gets started soon.

No comments:

Post a Comment

Thank you for sharing. I appreciate that you viewed this content and that it was worth enough thought for you to comment about it.