EITC for Unauthorized Immigrants?

by Reihan Salam

One of the ways proponents of amnesty try to sway conservatives is by pledging that unauthorized immigrants will be barred from accessing welfare benefits, or at the very least that their access will be somehow limited. It is a safe bet that this will never happen in practice. The problem is that the unauthorized immigrant population is extremely poor. So when the Senate immigration bill stipulated that immigrants granted “provisional legal status” would be barred from various safety net programs, Los Angeles County and other local governments with large unauthorized immigrant populations objected, on the grounds that this provision threatened to leave them on the hook for providing immigrants with emergency medical care, among other services. How much do you want to bet that limits on access to benefits would be slowly whittled away?

What’s really extraordinary is that Congress hasn’t even had to pass a law granting unauthorized immigrants legal status for benefits to be extended to them. As the president and his allies often remind us, the recent executive amnesty did not grant unauthorized immigrants legal status. Rather, it granted immigrants with U.S.-born children or those who entered the country as minor children a temporary reprieve from deportation so that immigration enforcement authorities can focus on the truly dangerous violators of immigration laws. Yet immigrants granted this temporary (in theory) reprieve will also be granted work authorization, which in turn means that they are entitled to a suite of tax benefits designed to benefit low-wage workers. In particular, the earned-income tax credit will now boost incomes for immigrants who are, executive amnesty notwithstanding, living and working in the United States in violation of our immigration laws. Quite remarkably, unauthorized immigrants will receive retroactive EITC payments in recognition of work they had done prior to the executive amnesty. This comes as no surprise to those of us who’ve followed the immigration debate closely. Yet it is extraordinary all the same. 

Over at Wonkblog, Max Ehrenfreund has a piece that takes Iowa Sen. Charles Grassley to task for introducing legislation that would deny unauthorized immigrants access to these benefits. Ehrenfreund’s article is useful insofar as it illustrates how many amnesty proponents approach the larger immigration debate. His argument rests on the following premises: (a) the EITC will encourage unauthorized immigrants to work, and so it will reduce dependence on other safety net benefits; (b) and it will help improve the economy in regions with large populations of unauthorized immigrants.

To the first point, Ehrenfreund neglects the fact that we are in the midst of a debate over whether or not to embrace unauthorized immigrants as part of our political community, a debate that the president short-circuited with his unilateral amnesty. He also neglects the fact that unauthorized immigrants already have strong incentives to work, e.g., because unauthorized immigrants are ineligible for unemployment assistance, they are more likely to move from one region to another in search of work than the native-born poor. It seems plausible that the EITC will further encourage work, particularly among unauthorized immigrant women, who currently work at far lower rates than other women, in part to raise children. Of course, this increase in female labor force participation raises the question of how unauthorized immigrant families will care for their children — more generous child-care subsidies, I assume?

It is widely understood that helping extremely poor people transition to work can be more expensive than simply allowing them to collect public assistance. In some cases, costs decline as low-wage workers climb the skills ladder. Yet some workers have a much harder time climbing the skills ladder than others, particularly older workers who have obligations that keep them from upgrading their skills and people with low levels of English language fluency, which keep them isolated. I assume Ehrenfreund would like us to create social programs to address all of the various challenges facing unauthorized immigrants.  One alternative to encouraging work among unauthorized immigrants through the use of the EITC and other programs is to demand that they return to their countries of origin, and to only admit immigrants who won’t need extensive public assistance to support themselves and their families. Ehrenfreund is assuming that this debate has been settled. So does President Obama. But it’s not. Ehrenfreund’s second point, that regions with large numbers of unauthorized immigrants will benefit if they receive transfers from the federal government, is actually an argument for regionally-targeted transfers (and not a very good one, in my view), not an argument for granting transfers to unauthorized immigrants as such. 

And then there is Ehrenfreund’s concluding paragraph:

The controversy over the “amnesty bonus” illustrates the difficulty of the Republican position on immigration. Republicans have long sought to identify themselves as the party of growth, and comprehensive immigration reform would likely improve economic growth, as Rep. John A. Boehner (R-Ohio), the speaker of the House, said last year. In a smaller way, so would extending the earned income tax credit to undocumented immigrants. Yet there’s no way to achieve those economic gains without helping immigrants in way that many conservatives would view as amnesty. As a result, the Republican Party has been unable to agree on a solution to the problem of illegal immigration.

This passage is remarkable. It may well be true that “comprehensive immigration reform would likely improve economic growth,” a carefully-hedged statement. Yet it is almost certainly true that annexing India, a vast and impoverished country that nevertheless has a higher growth rate than more mature economies like our own, would do the same. This is why it is useful to consider the impact of U.S. immigration policies on GDP per capita at the very least, or on the average skill level of the workforce. If we assume that we will not allow every individual who would like to settle in the U.S. to do so, more selective policies — e.g., policies that emphasize educational attainment and English language proficiency — have significant economic advantages over less selective policies. 

(For a more convincing take on how we ought to approach America’s unauthorized immigrant population, I recommend Peter Skerry’s National Affairs article on the subject.)

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