Perhaps “fake news” would be too strong a label, but the latest liberal claim circulating in the debate over refugee resettlement is “extremely misleading” at the very least. One of the arguments used to justify allowing more and more refugees into the U.S. (regardless of from where) is that they ultimately pay their own way in taxes for the services they receive.
In regards to the cost of bringing in refugees to the U.S., the Washington Post misinforms us that “By the time refugees who entered the U.S. as adults have been here for 20 years, they will have paid, on average, $21,000 more in taxes to all levels of government than they received in benefits over that time span, according to a working paper released…by the National Bureau of Economic Research that examined the economic and social outcomes of refugees in the U.S.”
Color me surprised by the results, especially when we saw Germany (which has been extremely liberal in taking in Middle Eastern migrants) blow their government’s budget surplus on refugees. It’s hardly surprising that they’d impose such a cost. In the case of the U.S., you can just look at how common welfare use is among refugees (Middle Eastern refugees in particular).
So how did the study get a figure of $21,000? Thanks to an excellent review of the study by Jason Richwine for the Center for Immigration Studies, we learn that the authors count all (or nearly all) taxes paid by refugees but reduce the number of services they receive to just six social programs — cash welfare, SSI, Social Security, food stamps, Medicare, and Medicaid. All other costs that might be incurred from immigration — housing, infrastructure, education, law enforcement, and so on — do not count.
Second, they fail to adjust for the underreporting of those social programs in the American Community Survey (ACS). The difference between reported costs in survey data and actual costs can be large.
For example, we know from administrative data that about 22 million households were on food stamps in 2012, but the 2012 ACS counts fewer than 16 million of them. (In fact, these numbers understate the reporting gap. The administrative data give us the number of households on food stamps in a typical month, while the ACS asks each household whether it has received food stamps at any time in the past 12 months. The ACS count should actually be higher than the administrative count.) On the other side of the ledger, the ACS captures 83 to 87 percent of earnings by survey respondents. Adjusting survey-based earnings and program costs upward to reflect reality is essential for meaningful results.
Third, the paper excludes refugees’ minor children. When refugees cannot afford to provide food, housing, or medical care to their children, taxpayers foot the bill. Most of those costs are omitted.
Fourth, the authors restrict the refugee age range to 18-65, cutting off the analysis just before the age where most people stop working and begin participating in the nation’s costly retirement programs.
So in summary, refugees produce a slight benefit to the tax base as long as we don’t account for a bunch of their expenses or the most expensive types of refugees — those with large families receiving benefits, and the elderly drawing from Social Security and Medicare —
Funny, if you didn’t know any better, you’d say the study was purposefully designed to be as misleading as possible.