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Dec. 14, 2015 - Freedomain Radio - Stefan Molyneux
46:45
3151 The High Cost of Middle Eastern Refugees | Steven Camarota and Stefan Molyneux
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Hi, everybody.
This is Devan Molyneux from Freedom Aid Radio.
Hope you're doing well.
We have back Dr.
Stephen Camarata.
He serves as the Director of Research for the Center for Immigration Studies.
In recent years, he's testified before Congress more than any other non-governmental expert on the economic and fiscal impact of immigration.
You can check out their info and data at cis.org.
Thank you so much, Dr.
Camarata, for taking the time today.
Oh, thanks for having me.
Okay, so to reassure or perhaps even alarm the listeners to this program, I wonder if we could talk a little bit about whether or not The refugees, or particularly the refugees from the Middle East, how are they doing economically in America?
Because, of course, the fear of a lot of people in the general population is that it's not that easy to integrate.
There are challenges in terms of consumption of public welfare goods and so on.
So where do they stand in those circumstances?
Well, if we're talking about sort of how immigrants so far from the Middle East have done, then I think it's fair to say that the available evidence is Many of them struggle at least for the first five or ten years that they're here.
The government actually does surveys five, six years out of refugees.
If we look at those from the Middle East, we can only say that their use of welfare programs is extraordinary.
Ninety-one percent of households headed by refugees from the Middle East access the food stamps program.
Sixty-eight percent access the cash program.
Of individuals, some three-quarters are basically on Medicaid.
So this is a population that's using welfare really higher than any other group, even higher than other refugee groups, which themselves are extraordinarily high.
But we do have to remember that refugees are not admitted to the United States with the idea that somehow they're going to benefit our country, but rather they're admitted based on the idea that for humanitarian reasons So that's important to note, but it's very costly.
The welfare costs are only one of a number of very significant costs that refugees create.
Yeah, I mean, I love the idea of humanitarian aid.
I also like the idea that charity is voluntary and, of course, the public purse is a little bit less on the voluntary side, which I think for some people might raise concerns about the level of charitability.
Why do you think, in particular, the Middle Eastern refugees are having such trouble?
Well, there are a couple of reasons.
One of the main reasons is that the available evidence indicates that their average years of schooling is 10.5 years.
So the majority don't have a high school education, for example.
So that means that Syrian refugees are likely to be a pretty poor group, and so we would expect them to struggle because education is the single best predictor of economic success in the United States.
So the high welfare use almost certainly reflects the low educational attainment.
However, Other factors do, too.
It becomes kind of a norm to use welfare in lots of immigrant communities.
It doesn't mean people don't work.
In the case of the refugees, a lot of them don't work, and they get welfare.
But in the case of immigrants, generally, their high welfare use often goes hand-in-hand with working at low-wage jobs.
That's true for refugees, but refugees have relatively low rates of work, so they are getting welfare.
Partly because they're not working as well, but when they do work, they often make wages around $10 an hour or less.
That's what the surveys show.
So that kind of income, if you just have a few dependents, means you're going to qualify for just about every welfare program, even though you might be working.
Yeah, and I was also wondering, because it could be a bit of an apples to oranges comparison when we say sort of 10 plus years of education in a country as chaotic, of course, as Syria and some of the other Middle Eastern countries, and also, of course, the content of the education,
I would assume a lot of it is religious education that wouldn't have particular economic value in the U.S. Would you say that the, what degree of equivalency is there between Middle Eastern educational systems and what would be economically valuable in the U.S.? In general, we find that immigrants with the same level of education earn somewhat less in the United States,
even when they've been here for a while, but that those differences are not enormous, suggesting that the quality or type of education that folks get is maybe not quite what would you get here under normal circumstances, but it may not be as low as you'd think.
Basic primary and secondary schools Probably do an okay job in many of these countries, not necessarily as good as in the United States, and you can criticize the United States' inadequate education system.
So yes, you're probably right that that 10.5 years may be an indication of even less skills.
On the other hand, it would be fair to point out that completing high school in the United States is something the vast majority of people do as a matter of course.
We still certainly have high school dropouts.
But in those developing countries, a lot of kids drop out maybe to support their families.
There might just not be an opportunity to go on to schooling.
So a lot of these kids might be academic.
A lot of these folks may have been academically oriented, certainly capable of doing higher-level work, but they just don't get an opportunity in those countries.
So it's important to note.
So I think that's something to keep in mind.
Nonetheless, if you come to the United States, And have a 10th grade education, you're going to struggle.
However bright you might be, it's not going to be easy to overcome that fact, and you're coming typically with not much with you, no money or anything like that, few physical possessions if you're a refugee, and you typically don't speak the language.
So it's going to be tough, and those welfare use rates are extraordinarily high, you know, reflect that fact.
Right.
Now, the Office of Refugee Resettlement reports do seem to suggest that refugees are...
I don't want to put this in quotes just to be automatically cynical, but they say that they're self-sufficient after five years.
I'm not sure that I would use the same definition of self-sufficiency as they would.
How would you break that out?
Right.
Well, yeah, it is amazing.
They use a way of defining self-sufficiency that is entirely contrary to To the common understanding of that term.
So the Office of Refugee Resettlement says in its most recent survey that about half of all refugees are self-sufficient now after five years, or those who've been here for five years are self-sufficient.
What they mean by that is very specifically they're not receiving cash welfare.
If they're living in public housing, if their kids are on food stamps and WIC, if the family is getting free school lunch, if everyone in the family It's on Medicaid and so on.
That family is still self-sufficient.
The only way you're not self-sufficient is if you get cash welfare.
And as anyone who knows anything about welfare, the really expensive programs that are much more extensive are the non-cash programs.
So it is incorrect to say that half of refugees are self-sufficient after five years.
It's probably the case in the way we would normally understand that term.
That maybe only about 20% are, maybe a little higher, but it's very low.
So even when they've been here for a while, welfare use, particularly the non-cash programs, is the norm.
But remember, one other point, 50% of all refugees here for five years also receive cash.
They just use the non-cash programs at even higher rates.
Right, right.
Is there any tracking of English adoption among refugees over time?
Yeah, I can't recall all of it, but yes.
We do track them for the first five years, and it's sort of a mixed bag.
It's sort of what you might expect.
Refugee language acquisition is It does improve over time, as it does for all groups, but still, a large fraction of refugees still suffer, still struggle with English, even after they've been in the United States for five years.
But again, given the educational attainment and the fact that people always gravitate to ethnic enclaves, The language acquisition is not what we would hope for, but there's also progress and their children learn English at a much higher rate as well.
Right, okay.
Now, a statistic that I saw that I had to sort of read three times to make sure I got correct.
Let me just read it to you here and get your comments.
Fewer than 60% of Afghani, Bhutanese, Burmese, Hamong, Liberian, and Somali refugees arriving during 2004 to 2013 were even literate in their own native language.
Right.
Now that would be another example of, you know, it's not reasonable.
You sometimes hear people who just don't know.
It's a lot of romantic talk about immigration without ever being rooted in the actual data.
So the mayor of Baltimore says, we want refugees to come to Baltimore.
They'll help revitalize our city.
It's as if she has no idea what all the government data shows about refugees, which is that many have very little schooling, many struggle with English, their welfare use rates are extremely high, many don't work even though they're of working age, many are disabled, and that somewhat makes sense.
They have psychological problems, they have physical problems as a result of the war, they may have fled.
So there isn't any understanding for what it actually What the data actually show.
Right, and integration is one of these big challenging words.
What does it even mean to integrate?
We certainly don't want everyone to become like one person, but at the same time we don't want to create these isolated moat societies.
And I guess one of the concerns that I've had over the years is the degree to which creating a welfare state It makes the incentive to economically integrate into the mainstream society less.
Because, you know, I feel if I was dropped into Japan with no money and there was no welfare state, well, I'd have to hustle, I'd have to learn Japanese very quickly, and I'd have to integrate into the Japanese economy so that then I would have a significant investment in the success of Japan as a whole.
Do you think that the existence of these welfare state programs may to some degree be isolating and not creating a path to integration that is of high value to refugees?
It's a perfectly reasonable question and it almost certainly is true to some very significant extent, especially the way the welfare of refugee agencies.
The listeners may not know, but the way it works is that the government provides people with some stuff when they first arrive, But a lot of it is through refugee agencies, so Lutherans, Catholics, there are Jewish groups, there are Methodist groups, there's all these church and other groups that provide aid, but they're all very dependent on the government, and the funding is only a short-term thing.
So what these agencies tend to do is work very hard, very quickly, to get the refugees signed up for every conceivable Welfare program, and refugees, it should be pointed out, have immediate and broad access to all welfare programs, and the time limits don't even apply to them in the same way.
So they have very generous access to welfare.
This at least gets these people, in effect, stabilized, adjusted to life, and then the refugee agencies tend to move on to the next crop of refugees, which they're lobbying very hard to bring into the country, so they can get their new flow of grants.
And so, That model does tend to produce extremely heavy use of welfare.
On the other hand, it's difficult to imagine in modern America that we were going to bring in people who had been through a war and maybe illiterate in their own language or very limited schooling and expect them to do well in the United States.
Now, we might have done that in 1910.
We might have taken people in from the Russian Empire who had...
We've fled pogroms who are very difficult circumstances and just let them sink or swim in New York City.
But we're not that kind of society anymore.
Most would swim, obviously, but some wouldn't.
And all those who would end up homeless or destitute would make the evening news.
It would be a very big political issue in the United States.
So it's difficult to imagine a regime in which we didn't offer generous welfare to refugees, at least initially.
But it has exactly the consequences you would predict, that people become very dependent on these things.
And so that's sort of the difficult state of affairs.
Now, I have a view about what we could do about this, but it would probably involve just taking in a lot fewer refugees and instead using our money to help people in the region better their lives and adjust to life in a neighboring country and then eventually return to their home country.
I could talk about that if you'd like, but I think that would be much better.
It would be less costly and disruptive for the United States, and in the long run it may well be better for the refugees themselves, at least in the sense that we could help a lot more people with the same amount of money, because what we've been talking about is just how costly it is to resettle refugees in the United States.
Would you like me to speak to that question beyond just welfare?
Oh, absolutely.
Because, of course, the one thing that is always difficult for people to see is what is not seen.
Everyone sees, oh, look, we've brought 25 refugees over.
But the case, of course, to be made that you can handle or help 10 to 12 to 13 times more Refugees by sending money over to the Middle East rather than bringing people from the Middle East over to America or to Canada.
I'd love for you to talk about that because if people are really committed to helping, we want to do it as intelligently as possible, not with this sort of photo-op sentimentality that actually harms more than it helps, I would argue.
Yes, what we found was that each refugee on average from the Middle East cost about $64,000 in the first five years.
That's the cost If you look at households, which have about four people, then you're looking at about $257,000 per household.
That's about 11, 12 times what it would cost to help someone in the Middle East based on what the UN says it needs.
Right now, the UN says that each year they need about $1,100 to care for people in the neighboring countries of Turkey, Lebanon, and Jordan for Syrian refugees.
But the UN can't do that because it currently has actually a very large deficit.
They have about a $2.5 billion funding deficit between what they need to provide for roughly 4 million refugees in the region and has been promised but has not been received by donor countries.
So if you just kind of add the numbers up, you take the cost of resettling refugees in the United States, This includes transportation, all the furniture, clothing, and housing they give them when they get peer, language instruction, other social services, the welfare cost, education.
You take all that, and about for the five-year cost of helping 39,000 refugees come to the United States, you could end the entire UN funding gap right now.
That they need to care for 4 million refugees in the Middle East.
So that gives you an idea of how much more effective you could help people if you took the money and spent it there rather than bringing a small number of people here.
It's kind of like this.
My colleague says, well, imagine 12 people in the water after a boat sinks.
They don't have life jackets or anything and they're all floundering.
And you have an option.
You can throw them 12 life jackets Or you can send them one single one-man luxury boat.
It would be a great boat, but it would only be able to fit one person.
And that's essentially the choice we face.
Somebody comes here, presumably, their life will be better, much better here than it would have been in the region.
Staying in a little apartment somewhere in Turkey, crowded in with their family, they may have a roof over their head and food, and maybe even a job, but it's not a great life.
If he came here, well, you know, he'd have access to all this welfare, but hopefully he'd be able to put together a much better life for himself.
And that's sort of the question.
If you said, look, I'm going to take that one person and put them on this luxury one-man boat, but the other 11, well, they've got to sink and swim on their own in the region.
That's essentially what the funding choice is.
And if you say, well, no, we should bring folks in and send all this money overseas...
That's just not how our politics works.
There's a huge federal deficit.
We have 48 million people already in poverty in the United States.
There are a host of social issues and problems, a $17 trillion debt.
There is not unlimited money.
As a consequence, the pot is only so big that we're going to allocate for this as a practical matter.
And the question is, does it make sense to help people there or bring them here?
And if your primary concern is to help the most people, then helping them there is clearly the way to go.
But if you want to take a trivial fraction, you know, a tenth of one percent of the refugees, a hundredth of one percent, and bring them here, well, then you can have a much better life than our current refugee policy does make a lot of sense, if that's your perspective.
Yeah, I mean, the cynical part of me says that if you send the money overseas, you don't end up with people most likely to vote Democrats.
But that's perhaps a topic for another political conversation.
You've done some work recently on the employment situation in the United States, of course, contrasting immigrants with natives.
And I just want to give you that platform to talk about it.
Of course, unemployment remains a huge problem in the United States.
And I think, as you point out, A lot of the jobs that have been created have not gone to Native Americans.
Right.
Now, it's important to understand what we mean in terms of employment.
There are several ways to look at the labor market, right?
You could look at unemployment.
Unemployment, officially, is referred to by the U3 measure of unemployment, is what the Labor Department usually reports.
And what that is, it's all the people who have a job, all the people who are looking for a job, and say they've actively looked in the last four weeks, And you add those two together and that becomes your denominator and you divide that in to the number of people who have looked in the last four weeks.
So to be unemployed, the unemployment rate only reflects people who are not working and have looked in the last four weeks.
If you looked in the last five weeks, if you just said, I don't think there's anything out there for me right now, then you wouldn't count at all in the unemployment numbers.
So when we look at the big picture, when we look at working age people, say, you can define it different ways, 18 to 65, 16 to 65, you can look at 25 to 54 if you like.
No matter how we slice that, you find that there has been a dramatic decline in work, particularly among the native-born.
We refer to this often as the employment rate.
And it's usually looked at, sometimes people look at everyone over 16 or 18, but that doesn't really make sense because the elderly have generally not worked or worked at much lower rates, and that's of course true today.
I think you need to cut it off at 65.
Most people do, but not always.
Anyway, the bottom line is when you look at that employment rate, you basically find not much improvement.
Some in the last few months, some in the last year, but basically the situation for the native-born It looks pretty bad.
The immigrants generally look better.
What we've seen is, at least up until 2014, I haven't done all the detailed analysis for the last year, and things have done better in the last year, but the fact is, from 2000 to 2014, if we look at the working age, 16 to 65, all of the net gain in employment went to the immigrants.
That's right.
All of the net increase in people working was among the foreign-born, even though natives accounted for two-thirds of the population growth among the working age.
So you would sort of expect that they would have gotten about two-thirds of the job growth.
They didn't.
They got none of it.
I'm sorry to interrupt, but I really want to pause and help people absorb that because it's one of these statistics, again, that blows my brain in five different directions.
The growth in employment since the official end of the recession has all gone to foreign-born immigrants.
Yes.
Now, if you take 2017, 2007, look at 2007 forward, except in the last few months, all of the employment has also gone to the immigrants as well.
So that's pretty striking.
It's gotten a little better in the last few months.
But, nonetheless, the basic idea that a disproportionate share, an overwhelming disproportionate share, has gone to the foreign-born is certainly correct.
When we look at the working age, the one group of natives that has done better is those over 65.
There aren't many immigrants in that category of worker, and the native-born have seen employment gains there.
But below the age of 65, where the vast majority of people are, where the vast majority of people supporting a family are, there you see just a huge decline in work and a disproportionate share of the jobs going to the immigrants.
Why?
That's the big question.
One syllable, go.
Yeah, I mean, the short answer is we're not sure.
But there are several distinct possibilities about why.
One is that employers may prefer the immigrants in some circumstances.
It may be the case that the employers see the immigrants as harder working.
You do see this phenomenon, particularly vis-a-vis U.S. foreign African Americans, that employers often prefer Immigrants to black Americans.
So that's one possibility.
Another possibility is the immigrants are willing to work for less or put up with more difficult working conditions.
Employers know that or sense that, and that plays out.
There are ways in which the immigration policy favors immigrants and sort of discriminates, if you will, against the native-born.
For example, there's a program that's exploded.
It's now over $100,000 a year each year called the J-1 Visa Program.
It's part of the J-1 Visa Program, summer work travel, and allows employers to hire temporary workers without having to make Social Security and Medicare payments.
That employers would be required to make if they were hiring native-born workers or other legal immigrants.
So another example of this way in which the immigration system might make immigrants more attractive to the native-born is the H-1B visa program.
There, the employer, the employee, the worker cannot change companies that easily, making them more captive to their employers, and that's another reason the employers like these programs.
Immigrants may be willing To do things like work off the books as well, and some employers may like that.
There are other possibilities.
One is that once an employer hires a few immigrant workers, they may become less likely to advertise the job widely Instead, preferring to use the informal network of his immigrant employee workers, friends, and family.
So a job becomes available at the warehouse, but instead of putting it at the unemployment office or advertising it online or in a newspaper, he tells his immigrant foreman.
And then everyone in that immigrant foreman's apartment building knows about the job, and that's how he finds his workers.
Now, that doesn't tend to happen quite the same way with the native-born people.
And those kinds of networks, the native-born, can be shut out of, so that might be another very distinct possibility.
Immigrants are more mobile, right?
If you're not working and you're in upstate New York, taking a job for $8 or $9 an hour in, say, a high employment growth rate like Austin, Texas, just doesn't look that attractive for you.
That's what you made there.
Are you hoping to find another job in the area once the economy recovers or what have you?
Whereas to the immigrant, $9 an hour looks fantastic.
It's three times what he would make in Oaxaca, where he's come from, so he'll just go to Austin.
But if the job creation is in suburban Atlanta, well, $9 an hour, say, or even $8, looks great to him.
Whereas the guy from western Pennsylvania, another low-employment growth area, it just doesn't look so great to him.
So the immigrants may be willing to move.
and the employer might have been willing to offer higher wages, but he doesn't have to.
He just got the immigrant who said $9 looks great to him and so he just takes it.
And so that's another way in which the immigrants may have an advantage.
So there are lots of possible explanations.
Some of these seem to be more important than others.
It's the case, one of the interesting things is the immigrants have made gains in the labor market across the board.
So they've all been in the higher skilled occupations like STEM fields, science, technology, engineering, and math.
And they've also been at the bottom end, so they've made gains in things like building, cleaning, and maintenance, or construction labor, or they've also made, you know, in the more middle-skilled occupations, they may be a,
you know, a frontline supervisor at a fast food restaurant, or they may be, you know, home healthcare workers, or And other types of health support, like a phlebotomist or a licensed practical nurse.
So they've kind of made gains across the labor market, at the top and the bottom end and at the middle, and natives have kind of done poorly in all those sectors.
Right.
Because, of course, my first thought, well, the two thoughts that I had was sort of, number one, that all the jobs that aren't nailed down in America seem to be being exported.
You know, there are jobs that you can export quite easily, and there are jobs that you can't.
So I thought, well, maybe it's the jobs that can't be exported that are more low-rent that is drawing in.
But if you say, as they go across the whole pyramid, that theory kind of goes by the wayside.
So it's not just that the new jobs that have been created are relatively low skill, which is more compatible with Yeah, or maybe part of it might just be prejudiced on the part of employers or a willingness to, you know, do things like work under the table.
You can see that as out-compete the native-born as well.
But, as I say, there are There are ways in which the immigration system can discriminate against the native-born in favor of the immigrants.
You see this happen with employers who get contracts and contractors who sign up.
Sometimes it's illegal aliens, they sign up, or sometimes it's through that J-1 visa.
They go to Ukraine or Thailand and sign up a bunch of kids for the program.
And then in January, they go to the employer and think, hey, I got 10 employees for you.
They're good kids.
They'll all come in June or May and work for you through August at the seasonal job.
So you see things like that.
And Americans don't start looking for jobs that are going to be in June, in January.
They start looking, you know, in May or something.
And by then, all those seasonal jobs are gone.
So that would be an example of that.
There are other examples.
So there's several things going on.
The immigrants do make less.
They do make less relative to their education than the native-born, but not that much less.
So they probably are sometimes able to underbid the native-born, but that's not a huge issue.
It is still an issue, though.
It happens.
And there might be sometimes where they're harder working or at least willing to put up with a lot of stuff that they might not be willing.
Really bad statistics with regard to native employment Some people think, well, isn't this partly an aging of our society?
And the answer in a nutshell is absolutely not.
The big declines among work among the native-born is among the young, people under 30.
And that is really bad because the research shows if you don't work when you're young, then you're much less likely to work as you get old, especially if you're someone who doesn't go into college.
Remember, half of all kids don't go into college and only like 35, 38 percent Actually get a college degree by age 25.
So most people still don't have college degrees.
Most people don't get a college degree, or at least a bachelor's.
And so the research shows, for example, if you're not going to college and you don't work when you're 18, you're much less likely to work at age 28, so 10 years later.
And what that tells us is that you kind of have to learn the skills It's necessary to function in the world of work when you're young, like showing up on time and not telling your boss he's an idiot, even when he really is, right?
And you need to learn that when you're young.
It's hard to learn when you're old.
And the fact that we've seen this explosion of non-work among the young means this is going to probably play out for the next couple of decades as a lot of these kids, as they move into older age cohorts, They're going to have lower rates of work.
It doesn't mean they're never going to work.
It doesn't mean that they're all going to be in welfare, but as a group, they're likely to work at lower rates.
They're likely to generally earn a little less than they would have otherwise and have jobs that give less benefits like health care and they'll work more intermittently and things like that.
That's what the research shows.
It seems to be playing out and that's very disconcerting.
By the way, just so you know, there's been a significant decline in work Among the young immigrants.
It's just that there aren't, surprisingly, that many young immigrants.
Immigrants usually come and arrive in the United States after the age of 25.
So at any given moment, there just aren't that many immigrants under the age of 25.
Immigrants have a lot of kids, but those kids, of course, are native-born, so they don't show up in statistics for immigrants, obviously.
But if you looked at immigrants under the age of 25, teenage immigrants, immigrants in their early 20s, The fraction working also shows a troubling decline.
The immigration stuff has for quite some time rubbed up quite harshly against my Austrian economics predilections and my libertarian predilections and so on because open borders, more people coming in, fantastic.
But because of the molasses sea of social welfare benefits and other kind of benefits that are Taxed and require the taxpayers to pay for.
I'm sort of thinking about somebody who earns $9 an hour.
Okay, we say, well, that's a net positive to the economy, but I can't imagine that $9 an hour is going to do anything to offset the cost of that person from social programs or you could just say taxpayer-funded programs all the way from Medicaid to welfare to even government schools, free lunches and so on.
So it seems to me that it's hard to make a case for net economic benefit For somebody coming into the country who ends up making $9 an hour in a free market, purely free market environment, that'd be $9 better.
But I think compared to the weight of the welfare programs, it seems hard to see how that weed can poke its head above the snow, so to speak.
Right.
I mean, it's very hard.
Thinking about having your listeners in a minute, if this is just the way it is, simple numbers are round for you, but it'll just give you a very broad perspective.
Roughly speaking, a single person trying to buy healthcare in the United States is about $6,000.
And that family's about $12,000 policy.
Now, that's just how it plays out.
You can bemoan that, and you can argue that government subsidy has played a significant role in creating medical inflation, but that is the reality, $6,000 and $12,000.
So, the bottom line is, how does a person who comes in at $9 an hour, which roughly, if they work full-time, and if they work 40 hours a week at 52 weeks a year, they would make about $18,000.
How does a person who makes $18,000 afford a $6,000 policy, or $12,000?
The employer either has to cover them or the taxpayer.
And from the employer's point of view, you can immediately see it's incredibly expensive.
Maybe they'll do it, but you could see why the employer would say, well, that almost doubles my cost, or at least causes it to go up by a third if I have to pay for this.
And so that person is either going to be insured by the government, and the employer's probably not going to do it, and they do it less and less, or they're just going to be an uninsured person, which creates new problems.
So they're the only options.
And that's why if you had to put this on a bumper sticker, you'd say there's a high cost to cheap labor.
The person comes in, $9 an hour, they're willing to take it.
So you have a willing worker.
The employer says, great, $9 an hour, that's less than I thought I'd have to pay.
So then you've got a willing employer, but...
The taxpayer gets kicked in the teeth, and we haven't even begun to talk about all the other cash and non-cash welfare programs.
Remember, if you make $18,000 a year and have two kids, you get about $3,500 from the government just from the earned in-town tax credit, and you might get another $2,000 from the additional child tax credit.
That is, you pay no federal income tax, but when you file, you get these two cash payments.
Your kids would, in basically every state, get free health care.
You, depending on your state, would qualify.
You might even qualify for free school lunch.
You almost certainly would.
And the WIC program, which is another nutrition program.
And in many states, you'd get at least something from food stamps if you made $18,000 and had two kids.
And that is what makes this so tough.
You can't just say, all that matters is a willing worker and a willing employee.
And then there's this other problem of displacing our young people in the labor market.
Now, on the high-skilled level, there's a different debate going on, and we can talk about that.
But on the low-skilled level, the concern is the people who already earn the lowest wages and have the lowest rates of work face all this competition from unskilled immigrants who often are very good workers but create enormous costs for taxpayers because that's how our welfare system is.
Low-wage workers account for most of the people getting food stamps and free school lunch and on Medicaid and so forth.
And so there's that.
The high-skill is a different issue.
They don't create a fiscal cost.
They do, but they pay a lot in taxes, so it works out okay.
But the high-skill is a different issue, which we could talk about.
If you have time, I'd love to hear about it.
I also wanted to mention that there are some really soft costs around just generally consumption of public goods that they're not paying taxes for.
I mean, driving on the roads or using the buses or, you know, the plumbing systems.
There is a sort of social cost to all of these things.
You know, America's crumbling infrastructure, I think, has something to do with the number of people who are not contributing to the maintenance of that infrastructure.
But anyway, so I just wanted to mention that.
I mean, as I recall...
The average household in America, to just pay for the average basket of goods they receive, on average, I can't remember the figure, but it's about $30,000.
If you can't pay as a household $30,000 in taxes, then you're going to be in fiscal deficit.
That's a lot.
And you could make a very strong argument.
That's too much.
We need to cut back on all this.
But that's the reality of the modern America.
So if you bring in somebody who makes $20,000 or $25,000 a year working, there is no possibility that they're going to be in fiscal surplus.
You could maybe create some scenario, but basically it costs an awful lot to pay for roads and bridges and schools and police protection and fire protection before you get to the welfare and all that.
And it just costs a lot, and that's the reality.
And this is a very different situation from 1910, which was the peak of the last great wave of immigration.
None of those things existed.
Almost every road outside of our cities were not even paid, so there was no cost there.
Few places, but they were mostly turnpikes, and you had to pay anyway.
So the bottom line is, it's just a different world.
You can't bring in poor people in modern America In the context of all the things we spend on and not create an enormous cost for taxpayers.
Now, on the high end, you don't have to worry.
Someone who comes in with a college degree, on average, there are lots of exceptions, but it goes both ways.
Some are very wealthy, some aren't, but on average, the person with a college degree will pay more in taxes than they use in services in their lifetime.
That's the good news.
The thing of it is that usually the argument is made that the reason we have to bring in, say, STEM workers, the science, technology, engineering, and math people, is that we're not producing enough STEM workers on our own, and so we have to bring in STEM workers.
But the problem with the argument is there doesn't seem to be any evidence for it.
Let me give you one of the classic reasons.
If we look at wages for STEM workers over the last 14 years, they're flat.
If you look at the current population survey or the American Community Survey, both show flat wages.
You can look at hourly wages or annual wages and both are flat.
And they're pretty much flat for every type of STEM worker with one or two exceptions.
One exception, at least through 2014, you know what it was?
Petroleum engineers.
They saw a massive increase in their wages.
So that would be one example.
But other than that, all the other STEM workers, you could pretty much say, have not seen much of a wage growth.
And so that is hard to explain.
Why is that?
If we're terribly short of STEM workers, how could it be that we don't have...
How can we have that kind of weight?
The other big piece of evidence is that most of the people who get STEM degrees in the United States who are US-born don't get a STEM job.
In other words, we're producing, depending on how you measure it, two to three STEM workers for every actual STEM job in the United States.
So depending again on how you find it, they do have surveys where they ask people You know, do you have a STEM degree?
And we know about how many STEM jobs.
So, for example, STEM employment is about 5 million.
There are about 5 million workers with a STEM degree, with a STEM job, and there are at least 12 million people in the United States who report they have a STEM degree, but they're not working at a STEM job.
I mean, just to give you a quick example of the new engineers, of engineers that we brought in, Only about 22% of the immigrant engineers actually get a job as an engineer in the United States.
So you do hear like, gosh, we just don't produce enough engineers, but the fact is the vast majority of people who get engineering degrees don't get engineering jobs, and that's true even of the immigrants.
And I think this is important because what it tells us is that it's often industry that says they need more people because industry always wants more people and they don't want to pay more.
Perfectly understandable.
I hire people here at this think tank.
I don't want to pay people more either.
I get it.
But that's not evidence that we don't have enough people to choose from.
In short, the wage growth and the employment data does not support the conclusion that America needs more STEM workers.
In fact, it seems, especially in computers, where almost all the job growth in the last 14 years has gone We're discouraging American kids from going into those jobs, even though a lot of American kids are very interested in computers.
You can sometimes argue, well, look, American kids are not interested in being field hands, but it's absurd to argue that American kids are not interested in working on computers.
And so I think that's the concern.
And there are national security issues.
If you become increasingly reliant on foreign sources of labor, one concern is that it may have an impact on your defense industries and security issues.
Another concern is, well look, if we really are short of STEM workers, then there's a problem in the pipeline.
We're just not teaching enough math and science in primary and secondary education.
We don't have enough programs at the college level.
By bringing in foreign STEM workers, you make American business, which politically is very important, completely indifferent to that pipeline problem.
How can that be good to the country?
And so that's the concern at the top end.
But the concern at the top end is not the fiscal.
That's not what the concern is.
The concern for STEM workers, in particular, is there are these real disadvantages, and we just don't seem to need them.
We have so many people who have STEM degrees.
Now the last point I wanted to touch on, and I've heard both sides of this, maybe you can help clarify it for me or for the listeners, is on the one hand I hear that The immigrants are creating a huge amount of jobs, very entrepreneurial, creating their own businesses and so on.
And that, of course, would be a net positive and so on to the economy.
So, fair enough.
On the other hand, I hear, well, you know, they get grants from the government and it's not exactly an even playing field and, you know, they're creating small local jobs, mostly for their own communities, you know, the sort of typical convenience store scenario and so on.
Do you have any sense of the degree to which immigration is driving entrepreneurial activity in America, or is it consumptive to the economy as a whole?
Yeah, I mean, here's what we have when we have systematic data.
When I say that, we have a numerator and denominator that are consistent.
The 2015 annual social and economic supplement of the current population survey showed the following, so you can make up your mind.
Of full-time people, or people in terms of their full-time job, 11.4% of immigrants indicated that they ran their own company, and the figure was 11.1% for natives.
But natives were almost twice as likely to run their own business as a part-time matter.
So the overall Self-employment rate, if you will, or rate of entrepreneurship was about 12.4% for the immigrants, about 12.8% for the natives.
In other words, no meaningful difference.
Whether we put those part-time people in or not, whether we look at just the full-time people, it's about the same.
There are other questions in the survey that maybe help us.
What fraction of these people who run their own business say that they have more than 10 employees?
Among the immigrants, about 16% say they have more than 10 employees.
Among the native-born, it's about 19%.
So in that sense, maybe the natives run somewhat larger companies.
If we look at the self-employment income, it's not very different for the two groups.
So I think the very...
The truth of the matter is, here's where I would put it, the idea that immigrants are uniquely entrepreneurial is not correct, but it's also the case that they are not lacking in entrepreneurship.
You see what I mean?
They are average.
So immigrants, if you will, are job creators and job takers at roughly the same rate, if you will, as the native-born.
And that may not be the best way to think about it or look at it, but that's the reality.
So it's not that it's – so you can't say, well, immigrants lack entrepreneurship, but you can't say it's a distinguishing trait.
Okay.
I think that's a fair analysis.
I appreciate that.
Thank you so much for your time, Dr.
Camerata.
Always a great pleasure.
And we'll put, of course, links to these studies below in the video and in the podcast feed so that people can go and check this stuff out for themselves and surprise everyone around you with some facts, which is always a little hard to come by in most colloquial immigration debates.
Thank you again so much, Dr.
Camerata.
A real pleasure.
Thank you for having me.
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