Fixing the Great Immigration Swindle: The Battle for Merit Based Immigration Reform

Republican presidential candidate Donald Trump smiles during a campaign rally at the Delaware County Fair, Thursday, Oct. 20, 2016, in Delaware, Ohio. (AP Photo/ Evan Vucci)
Republican presidential candidate Donald Trump smiles during a campaign rally at the Delaware County Fair, Thursday, Oct. 20, 2016, in Delaware, Ohio. (AP Photo/ Evan Vucci)

But celebrating only the top-line economic benefit to immigration is much like celebrating a $1.0 million widget sale, when the cost of acquiring or manufacturing those widgets was $1.5 million. It is also like falling for the fast-talking carnival pitch that buying three for the price of four is a great deal.

In the study, businesses, gained $548.1 Billion per year by using immigrant labor, both legal and illegal. However, this gain was largely at the expense of native-born American labor, who suffered a loss of $493.9 Billion annually, because their wages were depressed by excessive importation of cheap foreign labor. This is a 5.2 percent annual wage reduction for native-born American workers.

Moreover, the economic top-line did not include consideration of the huge fiscal costs to support medical, welfare, food stamps, and educational cost deficits funded by Federal, state, and local governments, because these costs far exceed tax revenues collected in various forms from immigrant households. According to the Center for Immigration Studies (CIS), the NAS, using eight different assumptions, estimated these fiscal costs to range from $57 Billion to 296 Billion per year. The median fiscal deficit would be $177 Billion annually. Using the 2012 Heritage Foundation estimate using 2010 data for the fiscal costs of all immigrant households, the fiscal deficit should be at least $104 Billion per year. Using the same data to weight the Federation of Americans for Immigration Reform (FAIR) 2013 estimate of $113 Billion per year for illegal immigrants alone, the total immigrant household cost comes out to be $234 Billion per year. Averaging the three different estimates, I will use $172 Billion as the annual net fiscal cost of supporting immigrant labor.

The bottom line of our immigration policy is that the small $54.2 Billion economic gain attributed to immigration is heavily outweighed by net government fiscal costs of approximately $172 Billion to support immigrant labor. The economic benefit itself results from an annual $493.9 Billion swindle of American workers, so businesses can boost their profits by importing cheaper foreign labor. Furthermore, the annual $172 Billion fiscal deficit is essentially a transfer of income from taxpayers to governments to benefit businesses that use cheap foreign labor. It is essentially an outrageous business subsidy to hire foreign workers instead of American workers. This is both fiscally and morally irresponsible and an insult to every patriotic American.

The 2013 Heritage Foundation study on the likely costs of amnesty—$6.3 Trillion over a 50-year period—also revealed some scary statistics on both immigration and the U.S. headlong rush to become a welfare state.

The average illegal immigrant household had a net Deficit of tax revenue received less benefits received of $14,387 dollars annually. Moreover, legal immigrant households had an average annual net Deficit of $4,344. Even native-born households had a small net Deficit of $310 per year. The overall average was a net Deficit of $1,158 per year. In other words, the U.S. has already become a deficit funded welfare state. Economist Milton Friedman once pointed out an obvious maxim: High immigration of low-skilled and largely uneducated workers is not compatible with generous government benefits. Importing poverty drains national wealth.

The Heritage Foundation data and CIS studies, however, show that the reason for huge welfare spending deficits for immigrants is their relatively low education and skill levels. A cardinal rule of successful immigration policy is that the immigrants must be able to sustain themselves economically. The U.S. has terribly violated this rule since the 1965 Immigration Act, which flooded the U.S. with low-skilled and poorly educated third-world immigrants and their extended families. The subsequent disaster was severely aggravated by the 1986 Amnesty.

In 1960, the average immigrant was more skilled, better educated, and better paid than the average native-born American. The average annual legal immigration with the decade ending in 1960 was 250,000. A high percentage of them were from Europe. At that time foreign-born persons in the U.S. numbered 9.7 million, 5.4 percent of the population. By 2015, the number of foreign-born had risen to 43.3 million or 13.4 percent of the population. The 2013 Heritage Foundation study found that 51 percent of illegal and 20 percent of legal immigrants lacked the equivalent of a high school education, whereas only 9.6 percent of native-born Americans lacked a high school education. Moreover, the Heritage Foundation found that it was only a minority [probably less than 45 percent] composed of college educated and high skilled households that made a positive contribution to the economy and government fiscal management.

Our current special interest driven immigration practices have resulted in stagnated real wages for American workers for the last 30 years. The poorest and least skilled American workers have seen their real wages drop by 20 percent.

According to a 2009 CIS study, immigrant households with at least one child, had a 57 percent use of at least one food assistance, Medicaid, or welfare benefit, compared to 39 percent of non-immigrant households. This varies considerably with nationality with the Dominican Republic, Mexico, and Guatemala running 75 percent or better, while Canada, Korea, India (19%), and the UK (only 7 percent) have rates lower than U.S. non-immigrants. These numbers, however, all point to the fact that the low education and skill levels of the immigrants drive higher government assistance usage.

A solution to the highly adverse impact on American workers and taxpayers created by the 1965 Immigration Act and exacerbated by special interest money and politics has been proposed by Senators Tom Cotton (R,AR) and David Perdue (R,GA) in Senate bill S.1720 introduced on August 2. The bill has the fervent support of President Trump.

Called the RAISE Act (Reforming American Immigration for a Strong Economy), the bill would prioritize green card permanent immigration to households based on their ability to sustain themselves and make a positive contribution to the American economy. The merit criteria would be education, English-language ability, documented high-paying job offers, achievement records, age, and entrepreneurial drive and potential. Presently, only 1 in 15 immigrants come to the U.S. because of their skills. The Raise Act would not interfere with the H-2a agricultural worker visa. Moreover, crop labor makes up less than one percent of the U.S. workforce.

Reversing the disastrous chain migration engendered by the 1965 Immigration Act, the RAISE Act would give family reunification preference only to the spouse and minor children of green card holders, eliminating preferences for other adults and extended family. A short-term visa will be allowed for aging parents needing medical care.

The Act would also reduce legal green card immigration from 1.05 million in 2015, which is over four times the immigration level prior to 1965, to 500,000 within a few years, the same level proposed by the Jordan Immigration Study Commission in 1997. Refugees would receive greater scrutiny and be limited to 50,000 per year. Sixty-two percent of likely American voters favor cutting immigration at least by half (July 2017, Pulse Opinion Research). Seventy-two percent favor only immediate family reunification preference or no preference, and 57 percent favor a skills-based points system for distributing non-family green cards.

In addition, the RAISE Act would probably lessen public safety and national security risks.

The RAISE Act is a long awaited reform, but its blessing could be cancelled and turned to ruin by coupling it with an 800,000 DACA amnesty proposal by Democrats and the usual wannabe liberal and special-interest Republicans. U.S. experience has been that amnesties have a strong multiplier effect that encourages high levels of illegal immigration and further amnesties and explodes the wage and fiscal problems that have plagued the U.S. since the 1986 Amnesty. This could also by demographic changes obliterate Republican majorities by 2024.

This may be a hard fight to protect America’s future.

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ABOUT THE AUTHOR   –  Mike Scruggs, Author and Columnist

a.k.a. Leonard M. Scruggs

 Mike Scruggs is the author of two books: The Un-Civil War: Shattering the Historical Myths; and Lessons from the Vietnam War: Truths the Media Never Told You, and over 600 articles on military history, national security, intelligent design, genealogical genetics, immigration, current political affairs, Islam, and the Middle East.

He holds a BS degree from the University of Georgia and an MBA from Stanford University. A former USAF intelligence officer and Air Commando, he is a decorated combat veteran of the Vietnam War, and holds the Distinguished Flying Cross, Purple Heart, and Air Medal. He is a retired First Vice President for a major national financial services firm and former Chairman of the Board of a classical Christian school.

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